STOCKHOLDERS’ DEFICIT

The Company reports its noncontrolling interests in consolidated subsidiaries as a component of equity separate from the Company’s equity. The following table shows the changes in stockholders' deficit attributable to the Company and the noncontrolling interests of subsidiaries in which the Company has a majority, but not total, ownership interest:



(In thousands)	The Company			Noncontrolling Interests			Consolidated
Balances as of January 1, 2018	$	(11,385,535	)	$	41,191		$	(11,344,344	)
Net loss	(201,910		)	(729		)	(202,639		)
Dividends and other payments to noncontrolling interests	—			(8,742		)	(8,742		)
Share-based compensation	2,066			8,517			10,583
Foreign currency translation adjustments	(7,161		)	(8,763		)	(15,924		)
Other adjustments to comprehensive loss	(1,250		)	(248		)	(1,498		)
Reclassifications adjustments	2,664			298			2,962
Other, net	(84		)	(656		)	(740		)
Balances as of December 31, 2018	$	(11,591,210	)	$	30,868		$	(11,560,342	)



(In thousands)	The Company			Noncontrolling Interests			Consolidated
Balances as of January 1, 2017	$	(11,030,835	)	$	128,974		$	(10,901,861	)
Net loss	(398,060		)	(60,651		)	(458,711		)
Dividends and other payments to noncontrolling interests	—			(46,151		)	(46,151		)
Purchase of additional noncontrolling interests	(524		)	(703		)	(1,227		)
Disposal of noncontrolling interests	—			(2,439		)	(2,439		)
Share-based compensation	2,488			9,590			12,078
Foreign currency translation adjustments	31,244			12,607			43,851
Unrealized holding loss on marketable securities	(370		)	(44		)	(414		)
Other adjustments to comprehensive loss	6,013			707			6,720
Reclassifications adjustments	4,864			577			5,441
Other, net	(355		)	(1,276		)	(1,631		)
Balances as of December 31, 2017	$	(11,385,535	)	$	41,191		$	(11,344,344	)

Stock Registration

On June 24, 2015, we registered 4,000,000 shares of the Company’s Class A common stock, par value $0.001 per share, for offer or sale under our 2015 Executive Long-Term Incentive Plan.

On July 27, 2015, the Board of Directors approved the issuance of 1,253,831 restricted shares to certain key individuals pursuant to our 2015 Executive Long-term Incentive Plan.

Dividends

During the fourth quarter of 2016, CCOH sold its outdoor business in Australia for cash proceeds of $195.7 million, net of cash retained by the purchaser and closing costs. On February 9, 2017, CCOH declared a special dividend of $282.5 million using a portion of the cash proceeds from the sales of certain nonstrategic U.S. outdoor markets and of our Australia outdoor business. On February 23, 2017, we received 89.9% of the dividend, or approximately $254.0 million, with the remaining 10.1%, or approximately $28.5 million, paid to public stockholders of CCOH.

On September 14, 2017, (i) CCOH provided notice of its intent to make a demand (the “First Demand”) for repayment on October 5, 2017 of $25.0 million outstanding under the Intercompany Note, and (ii) the board of directors of CCOH declared a special cash dividend, which was paid on October 5, 2017 to CCOH’s Class A and Class B stockholders of record at the closing of business on October 2, 2017, in an aggregate amount equal to $25.0 million, funded with the proceeds of the First Demand. The Company received approximately 89.5%, or approximately $22.4 million, of the proceeds of the dividend through its wholly-owned subsidiaries. The remaining approximately 10.5% of the proceeds of the dividend, or approximately $2.6 million, was paid to the public stockholders of CCOH.

On October 11, 2017, (i) CCOH provided notice of its intent to make a demand (the “Second Demand”) for repayment on October 31, 2017 of $25.0 million outstanding under the Intercompany Note, and (ii) the board of directors of CCOH declared a special cash dividend, which was paid on October 31, 2017 to CCOH’s Class A and Class B stockholders of record at the closing of business on October 26, 2017, in an aggregate amount equal to $25.0 million, funded with the proceeds of the Second Demand. The Company received approximately 89.5%, or approximately $22.4 million, of the proceeds of the dividend through its wholly-owned subsidiaries. The remaining approximately 10.5% of the proceeds of the dividend, or approximately $2.6 million, was paid to the public stockholders of CCOH.

On January 5, 2018, (i) CCOH provided notice of its intent to make a demand (the "Demand") for repayment on January 24, 2018 of $30.0 million outstanding under the Intercompany Note, and (ii) the board of directors of CCOH declared a special cash dividend, which was paid on January 24, 2018 to CCOH’s Class A and Class B stockholders of record at the closing of business on January 19, 2018, in an aggregate amount equal to $30.0 million, funded with the proceeds of the Demand. The Company received approximately 89.5%, or approximately $26.8 million, of the proceeds of the dividend through its wholly-owned subsidiaries. The remaining approximately 10.5% of the proceeds of the dividend, or approximately $3.2 million, was paid to the public stockholders of CCOH.

Share-Based Compensation

Stock Options

Prior to the merger, iHeartCommunications granted options to purchase its common stock to its employees and directors and its affiliates under its various equity incentive plans typically at no less than the fair value of the underlying stock on the date of grant. These options were granted for a term not exceeding ten years and were forfeited, except in certain circumstances, in the event the employee or director terminated his or her employment or relationship with iHeartCommunications or one of its affiliates. Prior to acceleration, if any, in connection with the merger, these options vested over a period of up to five years. All equity incentive plans contained anti-dilutive provisions that permitted an adjustment of the number of shares of iHeartCommunications' common stock represented by each option for any change in capitalization.

The Company has granted options to purchase its shares of Class A common stock to certain key executives under its equity incentive plan at no less than the fair value of the underlying stock on the date of grant. These options are granted for a term not to exceed ten years and are forfeited, except in certain circumstances, in the event the executive terminates his or her employment or relationship with the Company or one of its affiliates. Approximately three-fourths of the options outstanding at December 31, 2016 vest based solely on continued service over a period of up to five years with the remainder becoming eligible to vest over a period of up to five years if certain predetermined performance targets are met. The equity incentive plan contains antidilutive provisions that permit an adjustment for any change in capitalization.

The Company accounts for its share-based payments using the fair value recognition provisions of ASC 718-10. The fair value of the portion of options that vest based on continued service is estimated on the grant date using a Black-Scholes option-pricing model and the fair value of the remaining options which contain vesting provisions subject to service, market and performance conditions is estimated on the grant date using a Monte Carlo model. Expected volatilities were based on historical volatility of peer companies’ stock, including the Company, over the expected life of the options. The expected life of the options granted represents the period of time that the options granted are expected to be outstanding. The Company used historical data to estimate option exercises and employee terminations within the valuation model. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods equal to the expected life of the option. The Company does not estimate forfeitures at grant date, but rather has elected to account for forfeitures when they occur. No options were granted during the years ended December 31, 2018, 2017 and 2016.

The following table presents a summary of the Company's stock options outstanding at and stock option activity during the year ended December 31, 2018 ("Price" reflects the weighted average exercise price per share):



(In thousands, except per share data)	Options		Price		Weighted Average Remaining Contractual Term
Outstanding, January 1, 2018	2,092		$	35.09	2.6 years
Granted	—
Exercised	—
Forfeited	(529	)	35.60
Expired	(872	)	35.88
Outstanding, December 31, 2017 ⁽¹⁾	691		33.70		2.8 years
Exercisable	677		33.47		2.8 years
Expected to Vest	14		44.87		2.1 years


(1)	Non-cash compensation expense has not been recorded with respect to 0.1 million shares as the vesting of these options is subject to performance conditions that have not yet been determined probable to meet.

A summary of the Company's unvested options and changes during the year ended December 31, 2018 is presented below:



(In thousands, except per share data)	Options		Weighted Average Grant Date Fair Value
Unvested, January 1, 2018	543		$	19.61
Granted	—
Vested ⁽¹⁾	—
Forfeited	(529	)	18.94
Unvested, December 31, 2018	14		44.87


(1)	The total fair value of the options vested during the years ended December 31, 2018, 2017 and 2016 was $0.0 million, $0.0 million and $0.2 million, respectively.

Restricted Stock Awards

The Company has granted restricted stock awards to certain of its employees and affiliates under its equity incentive plan. The restricted stock awards are restricted in transferability for a term of up to five years. Restricted stock awards are forfeited, except in certain circumstances, in the event the employee terminates his or her employment or relationship with the Company prior to the lapse of the restriction. Dividends or distributions paid in respect of unvested restricted stock awards will be held by the Company and paid to the recipients of the restricted stock awards upon vesting of the shares.

The following table presents a summary of the Company's restricted stock outstanding and restricted stock activity as of and during the year ended December 31, 2018 (“Price” reflects the weighted average share price at the date of grant):



(In thousands, except per share data)	Awards		Price
Outstanding, January 1, 2018	6,219		$	3.81
Granted	70		0.52
Vested (restriction lapsed)	(627	)	4.26
Forfeited	(403	)	3.39
Outstanding, December 31, 2018	5,259		3.74

CCOH Share-Based Awards

CCOH Stock Options

The Company’s subsidiary, CCOH, has granted options to purchase shares of its Class A common stock to employees and directors of CCOH and its affiliates under its equity incentive plan at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding ten years and are forfeited, except in certain circumstances, in the event the employee or director terminates his or her employment or relationship with CCOH or one of its affiliates. These options vest solely on continued service over a period of up to five years. The equity incentive stock plan contains anti-dilutive provisions that permit an adjustment for any change in capitalization.

The fair value of each option awarded on CCOH common stock is estimated on the date of grant using a Black-Scholes option-pricing model. Expected volatilities are based on historical volatility of CCOH’s stock over the expected life of the options. The expected life of options granted represents the period of time that options granted are expected to be outstanding. CCOH uses historical data to estimate option exercises and employee terminations within the valuation model. CCOH does not estimate forfeitures at grant date, but rather has elected to account for forfeitures when they occur. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods equal to the expected life of the option.

The following assumptions were used to calculate the fair value of CCOH’s options on the date of grant:



	Years Ended December 31,
	2018	2017	2016
Expected volatility	44%	42%	42% – 44%
Expected life in years	6.3	6.3	6.3
Risk-free interest rate	2.76%	2.12%	1.12% – 1.41%
Dividend yield	—%	—%	—%

The following table presents a summary of CCOH’s stock options outstanding at and stock option activity during the year ended December 31, 2018:



(In thousands, except per share data)	Options		Price(3)		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding, January 1, 2018	4,110		$	6.10	4.1 years	$	2,378
Granted ⁽¹⁾	1		5.10
Exercised ⁽²⁾	(31	)	2.37
Forfeited	(26	)	6.56
Expired	(809	)	10.73
Outstanding, December 31, 2018	3,245		4.97		3.8 years	$	2,938
Exercisable	2,822		5.10		3.4 years	$	2,915
Expected to vest	423		4.15		6.6 years	$	23


(1)	The weighted average grant date fair value of CCOH options granted during the years ended December 31, 2018, 2017 and 2016 was $2.39, $2.04 and $2.82 per share, respectively.


(2)	Cash received from option exercises during the years ended December 31, 2018, 2017 and 2016 was $0.1 million, $0.2 million and $0.6 million, respectively. The total intrinsic value of the options exercised during the years ended December 31, 2018, 2017 and 2016 was $0.1 million, $0.2 million and $0.4 million, respectively.


(3)	Reflects the weighted average exercise price per share.

A summary of CCOH’s unvested options at and changes during the year ended December 31, 2018 is presented below:



(In thousands, except per share data)	Options		Weighted Average Grant Date Fair Value
Unvested, January 1, 2018	718		$	4.19
Granted	1		2.39
Vested ⁽¹⁾	(274	)	4.28
Forfeited	(22	)	3.90
Unvested, December 31, 2018	423		4.15


(1)	The total fair value of CCOH options vested during the years ended December 31, 2018, 2017 and 2016 was $1.2 million, $1.6 million and $2.7 million, respectively.

CCOH Restricted Stock Awards

CCOH has also granted both restricted stock and restricted stock unit awards to its employees and affiliates under its equity incentive plan. The restricted stock awards represent shares of Class A common stock that hold a legend which restricts their transferability for a term of up to five years. The restricted stock units represent the right to receive shares upon vesting, which is generally over a period of up to five years. Both restricted stock awards and restricted stock units are forfeited, except in certain circumstances, in the event the employee terminates his or her employment or relationship with CCOH prior to the lapse of the restriction.

The following table presents a summary of CCOH’s restricted stock and restricted stock units outstanding at and activity during the year ended December 31, 2018 ("Price" reflects the weighted average share price at the date of grant):



(In thousands, except per share data)	Awards		Price
Outstanding, January 1, 2018	3,900		$	5.61
Granted	2,054		5.37
Vested (restriction lapsed)	(592	)	8.09
Forfeited	(229	)	5.64
Outstanding, December 31, 2018	5,133		5.23

Share-Based Compensation Cost

The share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the vesting period. Share-based compensation payments are recorded in corporate expenses and were $10.6 million, $12.1 million and $13.1 million, during the years ended December 31, 2018, 2017 and 2016, respectively.

The tax benefit related to the share-based compensation expense for the years ended December 31, 2018, 2017 and 2016 was $2.6 million, $4.2 million and $5.0 million, respectively.

As of December 31, 2018, there was $17.5 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vest based on service conditions. This cost is expected to be recognized over a weighted average period of approximately three years. In addition, as of December 31, 2018, there was $15.1 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vest based on market, performance and service conditions. This cost will be recognized when it becomes probable that the performance condition will be satisfied.

Loss per Share

The following table presents the computation of loss per share for the years ended December 31, 2018, 2017 and 2016:



(In thousands, except per share data)	Years Ended December 31,
	2018			2017			2016
NUMERATOR:
Net loss attributable to the Company – common shares	$	(201,910	)	$	(398,060	)	$	(302,056	)

DENOMINATOR:
Weighted average common shares outstanding – basic	85,412			84,967			84,569
Stock options and restricted stock⁽¹⁾:	—			—			—
Weighted average common shares outstanding – diluted	85,412			84,967			84,569

Net loss attributable to the Company per common share:
Basic	$	(2.36	)	$	(4.68	)	$	(3.57	)
Diluted	$	(2.36	)	$	(4.68	)	$	(3.57	)


(1)	Outstanding stock options and restricted shares of 7.2 million, 8.3 million and 7.9 million for the years ended December 31, 2018, 2017 and 2016, respectively, were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.

In December 2016, the Board of Directors and the Company's stockholders holding a majority of the votes entitled to be cast by all outstanding common stock of the Company approved a Fourth Amended and Restated Certificate of Incorporation (the "New Charter"), and the New Charter became effective on January 26, 2017 following the mailing of an Information Statement on Schedule 14C to the Company's stockholders. The New Charter authorizes the issuance of 200,000,000 shares of a new class of non-voting Class D Common Stock, par value $0.001 per share (the "Class D Common Stock"). The shares of Class D Common Stock authorized by the New Charter may be issued without further approval from the Company's stockholders. The New Charter also authorizes the issuance of 150,000,000 shares of "blank check" preferred stock, par value $0.001 per share (the "Preferred Stock"). The Board of Directors has the authority to establish one or more series of Preferred Stock and fix relative rights and preferences of any series of Preferred Stock, without any further approval from the Company's stockholders.