7.Equity

Equity activity was as follows (in thousands):


	Total
	Equity
Balance at December 31, 2017	$	758,648
Net income		89,295
Stock-based compensation expense		2,897
Performance-based stock units		(8)
Stock option exercise		123
Non-controlling interest contribution		1,081
Common stock dividends		(45,168)
Other		(1,172)
Balance at June 30, 2018	$	805,696

Common Stock. We have an equity distribution agreement to issue and sell, from time to time, up to $200,000,000 in aggregate offering price of our company common shares. During the six months ended June 30, 2017, we sold 312,881 shares of common stock for $14,578,000 in net proceeds under our equity distribution agreement. At June 30, 2018, and 2017, we had $185,162,000 available under our equity distribution agreement.

During the six months ended June 30, 2018 and 2017, we acquired 30,839 shares and 41,592 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

Non-controlling Interests. During 2018 and 2017, we entered into partnerships to develop and/or own real estate. Given that our limited members do not have the substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. And since we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and carry the non-controlling interests at cost. As of June 30, 2018, we have the following consolidated VIEs (dollar amounts in thousands):


					Gross
Investment		Property			Consolidated			Non-Controlling
Year	Purpose	Type	State		Assets			Interests
2018	Owned real estate and development	UDP	OR	$	2,291	(1)	$	1,081	(1)
2017	Owned real estate and development	UDP	WI		7,053	(2)		2,247	(2)
2017	Owned real estate	ALF	SC		10,463			1,241
Total				$	19,807		$	4,569

⁽¹⁾

We entered into a partnership to own the real estate and develop a 78-unit assisted living and memory care community in Medford, OR for $18,108 and committed to purchase an existing operational 89-unit independent living community in Oregon. We anticipate acquiring the independent living community in the third quarter of 2018.

⁽²⁾

We entered into a partnership to own the real estate and develop a 110-unit ILF/ALF/MC community in Wisconsin. The commitment totals approximately $22,471.

Available Shelf Registrations. We have an automatic shelf registration statement on file with the SEC, and currently have the ability to file additional automatic shelf registration statements, to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time raise capital under our automatic shelf registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering.

Distributions. We declared and paid the following cash dividends (in thousands):


	Six Months Ended June 30,
	2018						2017
	Declared			Paid			Declared			Paid
Common Stock	$	45,168	(1)	$	45,168	(1)	$	45,110	(1)	$	45,110	(1)

⁽¹⁾

Represents $0.19 per share per month for the six months ended June 30, 2018 and 2017.

In July 2018, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of July, August and September, payable on July 31, August 31, and September 28, 2018, respectively, to stockholders of record on July 23, August 23, and September 20, 2018, respectively.

Stock-Based Compensation. Under our 2015 Equity Participation Plan (“the 2015 Plan”), 1,400,000 shares of common stock have been reserved for awards, including nonqualified stock option grants and restricted stock grants to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2015 Plan are set by our compensation committee at its discretion.

During the six months ended June 30, 2018 and 2017, no stock options were granted. The stock options exercised during the six months ended June 30, 2018 and 2017 were as follows:


		Weighted
		Average
	Options	Exercise		Option		Market
	Exercised	Price		Value		Value (1)
2018	5,000	$	24.65	$	123,000	$	205,000
2017	3,334	$	23.79	$	79,000	$	154,000

⁽¹⁾

As of exercise date.

At June 30, 2018, we had 20,000 stock options outstanding and exercisable. Compensation expense related to the vesting of stock options was $0 and $2,000 for the six months ended June 30, 2018 and 2017, respectively.

The following table summarizes our restricted stock and performance-based stock units activity for the six months ended June 30, 2018 and 2017:


	Six months ended June 30,
	2018		2017
Outstanding, January 1		244,181		210,573
Granted		156,718		140,057
Vested		(74,149)		(84,363)
Canceled		—		(22,877)
Outstanding, June 30		326,750		243,390

During the six months ended June 30, 2018 and 2017, we granted restricted stock and performance-based stock units under the 2015 Plan as follows:


	No. of	Price per
Year	Shares/Units	Share		Vesting Period
2018	81,819	$	38.18	ratably over 3 years
	66,171	$	38.18	TSR targets (1)
	8,728	$	41.25	May 30, 2019
	156,718

2017	74,760	$	45.76	ratably over 3 years
	57,881	$	45.76	TSR targets (1)
	7,416	$	48.55	June 1, 2018
	140,057

⁽¹⁾

Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years.

Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the six months ended June 30, 2018 and 2017 were $2,897,000 and $2,682,000, respectively. At June 30, 2018, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows:


	Remaining
	Compensation
Vesting Date	Expense
2018	$	2,973,000
2019		4,250,000
2020		2,210,000
2021		238,000
Total	$	9,671,000