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

6 Months Ended

Jun. 30, 2013

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

(7) 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 June 30,						Six months ended June 30,
	(amounts in thousands)
	2013			2012			2013			2012
Basic and Diluted:
Net income attributable to UHS	$	151,841		$	107,561		$	271,625		$	236,168
Less: Net income attributable to unvested restricted share grants		(88	)		(126	)		(157	)		(294	)
Net income attributable to UHS – basic and diluted	$	151,753		$	107,435		$	271,468		$	235,874
Weighted average number of common shares – basic		98,033			96,691			97,872			96,642
Net effect of dilutive stock options and grants based on the treasury stock method		1,178			1,038			1,019			1,118
Weighted average number of common shares and equivalents – diluted		99,211			97,729			98,891			97,760
Earnings per basic share attributable to UHS	$	1.55		$	1.11		$	2.77		$	2.44
Earnings per diluted share attributable to UHS	$	1.53		$	1.10		$	2.75		$	2.41

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. There were no significant anti-dilutive stock options during the three and six months ended June 30, 2013. The excluded weighted-average stock options totaled 2.6 million for each of the three months and six months ended June 30, 2012. All classes of our common stock have the same dividend rights.

Stock-Based Compensation: During the three-month periods ended June 30, 2013 and 2012, compensation cost of $6.1 million ($3.8 million after-tax) and $4.7 million ($2.9 million after-tax), respectively, was recognized related to outstanding stock options. During the six-month periods ended June 30, 2013 and 2012, compensation cost of $12.8 million ($8.0 million after-tax) and $9.6 million ($6.0 million after-tax), respectively, was recognized related to outstanding stock options. In addition, during the three-month periods ended June 30, 2013 and 2012, compensation cost of approximately $307,000 ($191,000 after-tax) and $593,000 ($369,000 after-tax), respectively, was recognized related to restricted stock. During the six-month periods ended June 30, 2013 and 2012, compensation cost of approximately $712,000 ($443,000 after-tax) and $1.2 million ($727,000 after-tax), respectively, was recognized related to restricted stock. As of June 30, 2013 there was $52.3 million of unrecognized compensation cost related to unvested options and restricted stock which is expected to be recognized over the remaining weighted average vesting period of 2.8 years. There were 2,777,400 stock options granted (net of cancellations) during the first six months of 2013 with a weighted-average grant date fair value of $13.31 per share.