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

9 Months Ended

Sep. 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 September 30,						Nine months ended September 30,
	(amounts in thousands)
	2013			2012			2013			2012
Basic and Diluted:
Net income attributable to UHS	$	114,587		$	71,817		$	386,212		$	307,985
Less: Net income attributable to unvested restricted share grants		(43	)		(85	)		(200	)		(379	)
Net income attributable to UHS – basic and diluted	$	114,544		$	71,732		$	386,012		$	307,606
Weighted average number of common shares – basic		98,151			96,817			97,965			96,701
Net effect of dilutive stock options and grants based on the treasury stock method		1,436			794			1,158			1,010
Weighted average number of common shares and equivalents – diluted		99,587			97,611			99,123			97,711
Earnings per basic share attributable to UHS	$	1.17		$	0.74		$	3.94		$	3.18
Earnings per diluted share attributable to UHS	$	1.15		$	0.73		$	3.89		$	3.15

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 nine months ended September 30, 2013. The excluded weighted-average stock options totaled 2.6 million for each of the three months and nine months ended September 30, 2012. All classes of our common stock have the same dividend rights.

Stock-Based Compensation: During the three-month periods ended September 30, 2013 and 2012, compensation cost of $6.2 million ($3.8 million after-tax) and $4.8 million ($3.0 million after-tax), respectively, was recognized related to outstanding stock options. During the nine-month periods ended September 30, 2013 and 2012, compensation cost of $19.0 million ($11.8 million after-tax) and $14.4 million ($8.9 million after-tax), respectively, was recognized related to outstanding stock options. In addition, during the three-month periods ended September 30, 2013 and 2012, compensation cost of approximately $307,000 ($191,000 after-tax) and $567,000 ($352,000 after-tax), respectively, was recognized related to restricted stock. During the nine-month periods ended September 30, 2013 and 2012, compensation cost of approximately $1.0 million ($634,000 after-tax) and $1.7 million ($1.1 million after-tax), respectively, was recognized related to restricted stock. As of September 30, 2013 there was $46.0 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 2.6 years. There were 2,760,900 stock options granted (net of cancellations) during the first nine months of 2013 with a weighted-average grant date fair value of $13.32 per share.