Share-based Compensation

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

During the second quarter of 2019, the Company amended the 2018 Omnibus Incentive Plan (“2018 Plan”) to increase the number of authorized common shares to be issued under the 2018 Plan from approximately 38 million shares to approximately 88 million shares. Share-based compensation expense totaled $23 million and $46 million during the quarters ended June 30, 2019 and 2018, respectively, and $46 million and $95 million during the six months ended June 30, 2019 and 2018, respectively.

Restricted Stock Units

During the six months ended June 30, 2019, the Company granted approximately 4 million restricted stock units (“RSUs”) under the 2018 Plan. These RSUs are primarily service-based awards with a three-year graded vesting period from the date of grant. The fair value of the RSUs is equal to the closing price per share of the Company’s common stock on the date of grant, which resulted in a weighted-average grant date fair value of $6.23.

Options

During the six months ended June 30, 2019, the Company granted 9 million options under the 2018 Plan. These options are primarily service-based awards with a three-year graded vesting period from the date of grant and have an exercise price equal to the closing price per share of the Company’s common stock on the date of grant, which resulted in a weight-average exercise price of $6.19, and a contractual term of ten years from the grant date.

The Company used the following significant assumptions to estimate the grant date fair value for the options using the Black Scholes valuation approach:



	For the Six Months Ended June 30, 2019
Risk-free interest rate	2.30% - 2.51%
Expected exercise term (years)	6.0 - 6.5
Expected dividend yield	2.1% - 2.3%
Expected volatility	41%

The risk-free interest rate was based on a U.S. Treasury bond with a zero-coupon rate that is based on the expected exercise term. The stock price volatility was implied based upon an average of historical volatilities of publicly traded companies in industries similar to the Company, as the Company did not have sufficient history to use as a basis for actual stock price volatility, and the Company’s debt to equity ratio. The dividend yield was calculated by taking the annual dividend run-rate and dividing by the stock price at date of grant. The expected average exercise term was calculated using the simplified method, as the Company did not have sufficient historical exercise data to provide a reasonable basis to estimate future exercise patterns.

During the six months ended June 30, 2019, the weighted-average grant date fair value for options granted was $2.11.