Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

A summary of the status of the Company’s nonvested restricted stock awards as of March 31, 2019, and changes during the three months ended March 31, 2019, is presented below:



	Shares		Weighted-Average Grant Date Fair Value
Nonvested at January 1, 2019	875,497		$	7.99
Granted	855,681		$	2.23
Vested	(743,574	)	$	5.11
Forfeited	(2,501	)	$	6.57
Nonvested at March 31, 2019	985,103		$	5.17

A summary of the status of the Company’s PSU activity as of March 31, 2019, and changes during the three months ended March 31, 2019, is presented below:



	PSUs	Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2019	910,911	$	4.67
2019 PSUs granted ⁽¹⁾	1,103,537	$	2.40
Outstanding at March 31, 2019 ⁽²⁾	2,014,448	$	3.42


(1)	Includes 566,862 shares classified as a liability due to the potential cash component described above.


(2)	None of the PSUs outstanding at March 31, 2019 were vested.

Schedule of Assumptions Used in the Monte Carlo Simulation Pricing Model

The following table summarizes the assumptions used in the Monte Carlo simulation pricing model related to the PSUs:



	2019 PSUs			2018 PSUs			2017 PSUs
Grant date	February 11, 2019			February 12, 2018			February 7, 2017
Fair value per share on valuation date ⁽¹⁾	$	4.74		$	4.76		$	6.86
Risk-free interest rate ⁽²⁾	2.54		%	2.36		%	1.53		%
Expected share price volatility⁽³⁾	60.99		%	42.02		%	32.85		%

(1)

The value of the PSU awards is estimated on the date of grant using a Monte Carlo simulation model. The valuation consists of computing the fair value using CBL's simulated stock price as well as TSR over a three-year performance period. The award is modeled as a contingent claim in that the expected return on the underlying shares is risk-free and the rate of discounting the payoff of the award is also risk-free. The weighted-average fair value per share related to the 2019 PSUs classified as equity consists of 357,800 shares at a fair value of $2.45 (which relate to relative TSR) and 178,875 shares at a fair value of $2.29 per share (which relate to absolute TSR). The weighted-average fair value per share related to the 2018 PSUs classified as equity consists of 240,164 shares at a fair value of $3.13 per share (which relate to relative TSR) and $120,064 shares at a fair value of $1.63 per share (which relate to absolute TSR).


(2)	The risk-free interest rate was based on the yield curve on zero-coupon U.S. Treasury securities in effect as of the valuation date, which is the respective grant date listed above.


(3)	The computation of expected volatility was based on a blend of the historical volatility of CBL's shares of common stock based on annualized daily total continuous returns over a three-year period and implied volatility data based on the trailing month average of daily implied volatilities implied by stock call option contracts that were both closest to the terms shown and closest to the money.