Earnings Per Share Data ("EPS") and Stock Based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Earnings Per Share Data ("EPS") and Stock Based Compensation

(8) Earnings Per Share Data (“EPS”) and Stock Based Compensation

Basic earnings per share are based on the weighted average number of common shares outstanding during the period. Diluted earnings per share are based on the weighted average number of common shares outstanding during the period adjusted to give effect to common stock equivalents.

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data):

	Three months ended March 31,
	2024			2023
Basic and Diluted:
Net income attributable to UHS	$	261,834		$	163,115
Less: Net income attributable to unvested restricted share    grants		(45	)		(129	)
Net income attributable to UHS – basic and diluted	$	261,789		$	162,986
Weighted average number of common shares - basic		67,204			70,535
Net effect of dilutive stock options and grants based on the    treasury stock method		1,278			952
Weighted average number of common shares and    equivalents - diluted		68,482			71,487
Earnings per basic share attributable to UHS:	$	3.90		$	2.31
Earnings per diluted share attributable to UHS:	$	3.82		$	2.28

The “Net effect of dilutive stock options and grants based on the treasury stock method”, for all periods presented above, excludes certain outstanding stock options applicable to each period since the effect would have been anti-dilutive. The excluded

weighted-average stock options totaled 1.3 million for the three months ended March 31, 2024 and 5.1 million for the three months ended March 31, 2023. All classes of our common stock have the same dividend rights.

Stock-Based Compensation:

During the three-month periods ended March 31, 2024 and 2023, pre-tax compensation costs of $14.4 million and $16.2 million, respectively, was recognized related to outstanding stock options. In addition, during the three-month periods ended March 31, 2024 and 2023, pre-tax compensation cost of approximately $5.1 million and $4.5 million, respectively, was recognized related to restricted stock awards, restricted stock units and performance based restricted stock units. As of March 31, 2024 there was approximately $236.3 million of unrecognized compensation cost related to unvested options, restricted stock awards, restricted stock units and performance based restricted stock units which is expected to be recognized over the remaining weighted average vesting period of 2.9 years. There were 3,000 stock options granted during the first three months of 2024 under the 2020 Stock Incentive Plan with a weighted-average grant date fair value of $44.58 per option. There were an aggregate of 545,810 restricted units granted during the first three months of 2024 under the 2020 Stock Incentive Plan, including 63,362 performance based restricted stock units, with a weighted-average grant date fair value of $180.77 per share.

The expense associated with stock-based compensation arrangements is a non-cash charge. In the condensed consolidated statements of cash flows, stock-based compensation expense is an adjustment to reconcile net income to cash provided by operating activities and aggregated to $19.6 million and $21.0 million during the three-month periods ended March 31, 2024 and 2023, respectively.