Equity

The table below presents the effect of the Company’s derivative instruments on accumulated other comprehensive income (“OCI”):



	Hudson Pacific Properties, Inc. Stockholders’ Equity			Non-controlling Interests		Total Equity
Balance at January 1, 2018	$	13,227		$	49	$	13,276
Unrealized gain recognized in OCI due to change in fair value	9,507			34		9,541
Income reclassified from OCI into income (as interest expense)	(28		)	—		(28		)
Net change in OCI	9,479			34		9,513
Cumulative adjustment related to adoption of ASU 2017-12	230			1		231
Balance at March 31, 2018	$	22,936		$	84	$	23,020

Non-controlling Interests

Common units in the operating partnership

Common units of the operating partnership and shares of common stock of the Company have essentially the same economic characteristics, as they share equally in the total net income or loss distributions of the operating partnership. Investors who own common units have the right to cause the operating partnership to repurchase any or all of their common units for cash equal to the then-current market value of one share of common stock or, at the Company’s election, issue shares of the Company’s common stock in exchange for common units on a one-for-one basis.

The following table summarizes the ownership of common units, excluding unvested restricted units as of:



	March 31, 2018		December 31, 2017
Company-owned common units in the operating partnership	155,626,055		155,602,508
Company’s ownership interest percentage	99.6	%	99.6	%
Non-controlling common units in the operating partnership⁽¹⁾	569,045		569,045
Non-controlling ownership interest percentage⁽¹⁾	0.4	%	0.4	%

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(1)	Represents common units held by certain of the Company’s executive officers and directors, certain of their affiliates and other outside investors.

Performance units are partnership interests in the operating partnership. Each performance unit awarded will be deemed equivalent to an award of one share of common stock under the 2010 Plan, reducing the availability for other equity awards on a one-for-one basis. Under the terms of the performance units, the operating partnership will revalue its assets for tax purposes upon the occurrence of certain specified events and any increase in valuation from the time of grant until such event will be allocated first to the holders of performance units to equalize the capital accounts of such holders with the capital accounts of common unitholders. Subject to any agreed upon exceptions, once vested and having achieved parity with common unitholders, performance units are convertible into common units in the operating partnership on a one-for-one basis.

6.25% Series A cumulative redeemable preferred units of the operating partnership

There are 407,066 Series A preferred units of partnership interest in the operating partnership, or Series A preferred units, which are not owned by the Company. These Series A preferred units are entitled to preferential distributions at a rate of 6.25% per annum on the liquidation preference of $25.00 per unit and became convertible at the option of the holder into common units or redeemable into cash or, at the Company’s election, exchangeable for registered shares of common stock after June 29, 2013. For a description of the conversion and redemption rights of the Series A preferred units, please see “Description of the Partnership Agreement of Hudson Pacific Properties, L.P.—Material Terms of Our Series A Preferred Units” in the Company’s June 23, 2010 Prospectus.

Common Stock Activity

The Company has not completed any common stock offerings in 2018.

The Company’s at-the-market, or ATM, program permits sales of up to $125.0 million of common stock. The Company did not utilize the ATM program during the three months ended March 31, 2018. A cumulative total of $20.1 million has been sold as of March 31, 2018.

Share repurchase program

On January 20, 2016, the Board authorized a share repurchase program to buy up to $100.0 million of the outstanding common stock of Hudson Pacific Properties, Inc., which the Board has increased up to a total of $250.0 million on March 8, 2018. No share repurchases have been made as of March 31, 2018.

Dividends

During the first quarter of 2018, the Company declared dividends on its common stock and non-controlling interest in common units in the operating partnership of $0.25 per share and unit. The Company also declared dividends on its Series A preferred units of $0.3906 per unit. The first quarter dividends were paid on March 29, 2018 to stockholders and unitholders of record on March 19, 2018.

Taxability of Dividends

Earnings and profits, which determine the taxability of distributions to stockholders, may differ from income reported for financial reporting purposes due to the differences for federal income tax purposes in the treatment of loss on extinguishment of debt, revenue recognition, compensation expense and the basis of depreciable assets and estimated useful lives used to compute depreciation.