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Redeemable Preferred Stocks | 6 Months Ended
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Jun. 30, 2019
Equity [Abstract] |
Redeemable Preferred Stocks | 8. Redeemable Preferred Stocks Series E and Series F Redeemable Preferred As of June 30, 2019, the Series E Redeemable Preferred has a 14% annual dividend rate and a participating right in dividends and liquidating distributions equal to 303,646 shares of common stock (participation rights value). Dividends accrue semi-annually in arrears and are compounded. Pursuant to the terms of the Series E Redeemable Preferred, the annual dividend rate will increase (a) by 0.50% in April 2021 (b) by an additional 0.50% in April 2022 and (c) by an additional 1.0% in April 2023. The Series E Redeemable Preferred contains redemption features and a participation rights value that are being accounted for as derivative instruments and have been bifurcated from the Series E Redeemable Preferred as discussed below under Embedded Derivative. As of June 30, 2019, the Series F Redeemable Preferred has voting rights (the “Series F Voting Rights”) to vote as a single class on all matters which the common stock have the right to vote and is entitled to a number of votes equal to 456,225 shares of our common stock. Changes in our Series E and Series F Redeemable Preferred are as follows:
|  | Series E Redeemable Preferred |
|  | Shares |  |  | Amount |
|  | (Dollars In Thousands) |
Balance at December 31, 2018 |  |  | 139,768 |  |  | $ | 202,169 |
Accretion relating to liquidation preference on preferred stock |  |  | — |  |  |  | 531 |
Accretion for discount and issuance costs on preferred stock |  |  | — |  |  |  | 462 |
Accumulated dividends |  |  | — |  |  |  | 14,845 |
Balance at June 30, 2019 |  |  | 139,768 |  |  | $ | 218,007 |
8. Redeemable Preferred Stocks (continued) Embedded Derivative Certain embedded features (“embedded derivative”) relating to the redemption of the Series E Redeemable Preferred, which includes certain contingent redemption features and the participation rights value have been bifurcated from the Series E Redeemable Preferred and recorded as a liability. As June 30, 2019 and December 31, 2018, we estimate that the contingent redemption features have fair value since we estimate that it is probable that a portion of the shares of this preferred stock would be redeemed prior to October 25, 2023. For certain other embedded features, we estimated no fair value based on our assessment that there is a remote probability that these features will be exercised. The fair value of the embedded derivative was valued using discounted cash flow models and primarily based on the difference in the present value of estimated future cash flows with no redemptions prior to October 25, 2023 compared to certain redemptions deemed probable during the same period and applying the effective dividend rate of the Series E Redeemable Preferred. In addition, at June 30, 2019 and December 31, 2018, the fair value of the embedded derivative included the valuation of the participation rights, which was based on the equivalent of 303,646 shares of our common stock at $3.90 and $5.52 per share, respectively. The valuations of the embedded derivative are classified as Level 3. This derivative is valued using market information, management’s redemption assumptions, the underlying number of shares as defined in the terms of the Series E Redeemable Preferred, and the market price of our common stock. In addition, no valuation input adjustments were considered necessary relating to nonperformance risk for the embedded derivative. A Level 3 valuation is based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. At June 30, 2019 and December 31, 2018, the fair value of the embedded derivative was $1.1 million and $1.6 million, respectively, and are included in our noncurrent accrued and other liabilities. For the three months ended June 30, 2019, we recognized an unrealized gain of approximately $0.7 million due to the change in fair value of the embedded derivative, (minimal for the same period in 2018). For the six months ended June 30, 2019 and 2018, we recognized unrealized gains of approximately $0.5 million and $1.1 million, respectively, due to the change in fair value of the embedded derivative. These unrealized gains are included in our non-operating income.

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