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

3 Months Ended

Mar. 31, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

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 classes A, B, C and D common stockholders for the periods indicated (in thousands, except per share data): 

	Three months ended March 31,
	2017			2016
Basic and Diluted:
Net income attributable to UHS	$	206,055		$	190,759
Less: Net income attributable to unvested restricted share    grants		(94	)		(89	)
Net income attributable to UHS – basic and diluted	$	205,961		$	190,670
Weighted average number of common shares - basic		96,585			97,607
Net effect of dilutive stock options and grants based on the    treasury stock method		787			1,288
Weighted average number of common shares and    equivalents - diluted		97,372			98,895
Earnings per basic share attributable to UHS:	$	2.13		$	1.95
Earnings per diluted share attributable to UHS:	$	2.12		$	1.93

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 approximately 6.0 million for the three month periods ended March 31, 2017 and 2016. All classes of our common stock have the same dividend rights.

Stock-Based Compensation:

During the three-month periods ended March 31, 2017 and 2016, compensation cost of $14.9 million and $12.7 million, respectively, was recognized related to outstanding stock options. In addition, during the three-month periods ended March 31, 2017 and 2016, compensation cost of approximately $150,000 (net of cancellations) and $318,000, respectively, was recognized related to restricted stock.  As of March 31, 2017 there was $137.7 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 3.2 years. There were 3,012,725 stock options granted (net of cancellations) during the first three months of 2017 with a weighted-average grant date fair value of $27.08 per share.

The expense associated with share-based compensation arrangements is a non-cash charge. In the Condensed Consolidated Statements of Cash Flows, share-based compensation expense is an adjustment to reconcile net income to cash provided by operating activities and aggregated to $15.3 million and $13.2 million during the three-month periods ended March 31, 2017 and 2016, respectively.