13. EQUITY

Preferred Stock

5,000,000 shares of Preferred Stock were authorized as at December 31, 2018 and 2017.

One share of Series A Convertible Preferred Stock (the “Series A Preferred Share”) was issued and outstanding as at December 31, 2018 and 2017. The Series A Preferred Share is convertible into 11,211,449 shares of Class A common stock on the date that is 61 days after the date on which the ownership of our outstanding shares of Class A common stock by a group that includes TW Investor and its affiliates would not be greater than 49.9%. The Series A Preferred Share is entitled to one vote per each share of Class A common stock into which it is convertible and has such other rights, powers and preferences, including potential adjustments to the number of shares of Class A common stock to be issued upon conversion, as are set forth in the Certificate of Designation for the Series A Preferred Share.

200,000 shares of Series B Preferred Shares were issued and outstanding as at December 31, 2018 and 2017 (see Note 12, "Convertible Redeemable Preferred Shares"). As of December 31, 2018, the 200,000 Series B Preferred Shares were convertible into approximately 111.1 million shares of Class A common stock.

Class A and Class B Common Stock

440,000,000 shares of Class A common stock and 15,000,000 shares of Class B common stock were authorized as at December 31, 2018 and 2017. The rights of the holders of Class A common stock and Class B common stock are identical except for voting rights. The shares of Class A common stock are entitled to one vote per share and the shares of Class B common stock are entitled to ten votes per share. Shares of Class B common stock are convertible into shares of Class A common stock on a one-for-one basis for no additional consideration and automatically convert into shares of Class A common stock on a one-for-one basis when the number of shares of Class B common stock is less than 10% of the total number of shares of common stock outstanding. Holders of each class of shares are entitled to receive dividends and upon liquidation or dissolution are entitled to receive all assets available for distribution to holders of our common stock. Under our bye-laws, the holders of each class have no preemptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares.

There were 252.9 million and 145.5 million shares of Class A common stock outstanding at December 31, 2018 and 2017, respectively, and no shares of Class B common stock outstanding at December 31, 2018 or 2017.

As at December 31, 2018, TW Investor owns 64.2% of the outstanding shares of Class A common stock. In connection with the exercise of warrants (described below) by Warner Media and TW Investor, each of them issued standing proxies to the independent directors of the Company, pursuant to which they granted the right to vote the shares received on the exercise of those warrants (the “Warrant Shares”) on all matters other than a change in control. In accordance with these proxies, the Warrant Shares will be voted in proportion to votes cast at a general meeting of the Company, excluding such Warrant Shares. Warner Media and TW Investor have undertaken to maintain this proxy arrangement in effect until April 2020 and may at their option extend it for an additional year from that date. As a result of the standing proxies, after giving effect to its ownership of the Series A Preferred Share, TW Investor has a 44.5% voting interest in the Company.

Warrants

On May 2, 2014, we issued 114,000,000 warrants in connection with a rights offering. Each warrant was exercisable until May 2, 2018 and entitled the holder thereof to receive one share of our Class A common stock at an exercise price of US$ 1.00 per share in cash. During 2018, 105,652,401 warrants were exercised, including 100,926,996 by Warner Media (Time Warner, Inc. at date of exercise) and TW Investor, resulting in net proceeds to us of approximately US$ 105.7 million. Of the 114,000,000 issued warrants, 202,175 expired unexercised.

Accumulated Other Comprehensive Loss

The movement in accumulated other comprehensive loss during the years ended December 31, 2018, 2017 and 2016 comprised the following:



	Currency translation adjustment, net			Unrealized (loss) / gain on derivative instruments designated as hedging instruments			TOTAL Accumulated Other Comprehensive Loss
BALANCE December 31, 2015	$	(240,989	)	$	(1,420	)	$	(242,409	)
Other comprehensive income / (loss) before reclassifications:
Foreign exchange gain on intercompany loans ⁽¹⁾	8,848			—			8,848
Foreign exchange loss on the Series B Preferred Shares	(19,412		)	—			(19,412		)
Currency translation adjustment	12,016			—			12,016
Change in the fair value of hedging instruments	—			(5,447		)	(5,447		)
Amounts reclassified from accumulated other comprehensive loss:
Changes in fair value reclassified to interest expense	—			2,416			2,416
Net other comprehensive income / (loss)	1,452			(3,031		)	(1,579		)
BALANCE December 31, 2016	$	(239,537	)	$	(4,451	)	$	(243,988	)
Other comprehensive income / (loss) before reclassifications:
Foreign exchange gain on intercompany loans ⁽¹⁾	11,326			—			11,326
Foreign exchange gain on the Series B Preferred Shares	33,444			—			33,444
Currency translation adjustment	10,511			—			10,511
Change in the fair value of hedging instruments	—			(1,942		)	(1,942		)
Amounts reclassified from accumulated other comprehensive loss:
Changes in fair value reclassified to interest expense	—			2,764			2,764
Changes in fair value reclassified to other non-operating income, net ⁽²⁾	—			447			447
Net other comprehensive income	55,281			1,269			56,550
BALANCE December 31, 2017	$	(184,256	)	$	(3,182	)	$	(187,438	)
Other comprehensive loss before reclassifications:
Foreign exchange loss on intercompany loans ⁽¹⁾	(1,061		)	—			(1,061		)
Foreign exchange loss on the Series B Preferred Shares	(12,527		)	—			(12,527		)
Currency translation adjustment	(9,824		)	—			(9,824		)
Change in the fair value of hedging instruments	—			(9,455		)	(9,455		)
Amounts reclassified from accumulated other comprehensive loss:
Changes in fair value reclassified to interest expense	—			2,220			2,220
Changes in fair value reclassified to other non-operating income, net ⁽²⁾	—			1,435			1,435
Net other comprehensive loss	(23,412		)	(5,800		)	(29,212		)
BALANCE December 31, 2018	$	(207,668	)	$	(8,982	)	$	(216,650	)


⁽¹⁾	Represents foreign exchange gains on intercompany loans that are of a long-term investment nature which are reported in the same manner as translation adjustments.


⁽²⁾	Represents amounts reclassified upon the dedesignation of a portion of our hedging instruments (see Note 14, "Financial Instruments and Fair Value Measurements".