Performance-Based Common Stock Warrants (Tables)

9 Months Ended

Sep. 30, 2019

Purchase Level and Number of Warrants That Will Vest

The table below presents the purchase levels and number of warrants that will vest in each period based upon achieving these purchase levels.



	Incremental Warrants That Will Vest
Aggregate Level of Purchases by Comcast and Affiliates	January 1, 2016 - December 31, 2017	January 1, 2018 - December 31, 2019	January 1, 2020 - December 31, 2021
$260 million	100,000	100,000	75,000
$300 million	75,000	75,000	75,000
$340 million	75,000	75,000	75,000
Maximum Potential Warrants Earned by Comcast	250,000	250,000	225,000

Assumptions Used in Valuation and Weighted Average Fair Value of Warrants

The assumptions we utilized in the Black Scholes option pricing model and the resulting weighted average fair value of the warrants were the following:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Fair value	$16.78	$10.06	$16.78	$10.06
Price of Universal Electronics Inc. common stock	$51.09	$38.95	$51.09	$38.95
Risk-free interest rate	1.56%	2.92%	1.56%	2.92%
Expected volatility	47.82%	41.00%	47.82%	41.00%
Expected life in years	3.25	4.25	3.25	4.25

Impact to Net Sales in Connection with Warrants and Related Income Tax Benefit

The impact to net sales recorded in connection with the warrants and the related income tax benefit were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Reduction to net sales	$	711	$	404	$	1,381	$	747
Income tax benefit	177		100		345		186