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Common Stock | 12 Months Ended
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Dec. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Common Stock | 5) COMMON STOCK Dividends Cash dividends of $0.40 per share ($37.3 million in the aggregate) were declared and paid during 2018, $0.40 per share ($38.2 million in the aggregate) were declared and paid during 2017 and $0.40 per share ($38.9 million in the aggregate) were declared and paid during 2016. All classes of our common stock have similar economic rights. Stock Repurchase Programs In December of 2018, our Board of Directors authorized a $500 million increase to our stock repurchase program, which increased the aggregate authorization to $1.7 billion from the previous $1.2 billion authorization approved during 2017, 2016 and 2014. Pursuant to this program, we may purchase shares of our Class B Common Stock, from time to time as conditions allow, on the open market or in negotiated private transactions. There is no expiration date for our stock repurchase programs. The following schedule provides information related to our stock repurchase program for each of the three years ended December 31, 2018. During 2018, 3,321,968 shares ($401.3 million) were repurchased pursuant to the terms of our stock repurchase program, 102,800 shares ($12.7 million in the aggregate) were repurchased in connection with the income tax withholding obligations resulting from the exercise of stock options and the vesting of restricted stock grants, and 11,224 shares were repurchased as a result of forfeited restricted shares. During 2017, 2,960,843 shares ($322.2 million) were repurchased pursuant to the terms of our stock repurchase program, 305,278 shares ($34.2 million in the aggregate) were repurchased in connection with the income tax withholding obligations resulting from the exercise of stock options and the vesting of restricted stock grants and 10,791 shares were repurchased as a result of forfeited restricted shares. During 2016, 2,512,592 shares ($289.9 million) were repurchased pursuant to the terms of our stock repurchase program, 468,228 shares ($57.0 million in the aggregate) were repurchased in connection with the income tax withholding obligations resulting from the exercise of stock options and the vesting of restricted stock grants and 2,500 shares were repurchased as a result of forfeited restricted shares.
|  | Additional dollars authorized for repurchase (in thousands) |  |  | Total number of shares purchased (a.) |  |  | Total number of shares cancelled |  |  | Average price paid per share for forfeited restricted shares |  |  | Total number of shares purchased as part of publicly announced programs |  |  | Average price paid per share for shares purchased as part of publicly announced program |  |  | Aggregate purchase price paid (in thousands) |  |  | Aggregate purchase price paid for shares purchased as part of publicly announced program |  |  | Maximum number of dollars that may yet be purchased under the program (in thousands) |
Balance as of January 1, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 175,828 |
2016 |  | $ | 400,000 |  |  |  | 2,983,320 |  |  |  | 2,500 |  |  | $ | 0.01 |  |  |  | 2,512,592 |  |  | $ | 115.39 |  |  | $ | 346,890 |  |  | $ | 289,937 |  |  | $ | 285,891 |
2017 |  | $ | 400,000 |  |  |  | 3,266,121 |  |  |  | 10,791 |  |  | $ | 0.01 |  |  |  | 2,960,843 |  |  | $ | 108.83 |  |  | $ | 356,413 |  |  | $ | 322,231 |  |  | $ | 363,660 |
2018 |  | $ | 500,000 |  |  |  | 3,435,992 |  |  |  | 11,224 |  |  | $ | 0.01 |  |  |  | 3,321,968 |  |  | $ | 120.81 |  |  | $ | 414,002 |  |  | $ | 401,316 |  |  | $ | 462,344 |
Total for three year period ended December 31, 2018 |  | $ | 1,300,000 |  |  |  | 9,685,433 |  |  |  | 24,515 |  |  | $ | 0.01 |  |  |  | 8,795,403 |  |  | $ | 115.23 |  |  | $ | 1,117,305 |  |  | $ | 1,013,484 |  |  |  |  |
| (a) | Includes 11,224, 10,791 and 2,500 of restricted shares that were forfeited by former employees pursuant to the terms of our restricted stock purchase plan during 2018, 2017 and 2016, respectively.
Stock-based Compensation Plans At December 31, 2018, we have a number of stock-based employee compensation plans. Pursuant to the FASB’s guidance, we expense the grant-date fair value of stock options and other equity-based compensation pursuant to the straight-line method over the stated vesting period of the award using the Black-Scholes option-pricing model. Pre-tax compensation costs of $61.1 million during 2018, $54.3 million during 2017 and $45.8 million during 2016 were recognized related to outstanding stock options. In addition, pre-tax compensation costs of $5.5 million during 2018, $2.5 million during 2017 and $2.3 million during 2016 were recognized related to amortization of restricted stock and discounts provided in connection with shares purchased pursuant to our 2005 Employee Stock Purchase Plan. As of December 31, 2018, there was approximately $110.8 million of unrecognized compensation cost related to unvested stock options and restricted stock which is expected to be recognized over the remaining average vesting period of 2.6 years. The expense associated with stock-based compensation arrangements is a non-cash charge. In the 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 $66.6 million in 2018, $56.7 million in 2017 and $48.1 million in 2016. Effective January 1, 2017, we adopted ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, which amends the accounting for employee share-based payment transactions to require recognition of the tax effects resulting from the settlement of stock-based awards as income tax expense or benefit in the income statement in the reporting period in which they occur. For the year ended December 31, 2018 and 2017, our provision for income taxes and our net income attributable to UHS were each favorably impacted by $1.2 million and $22.1 million, respectively, resulting from our adoption of ASU 2016-09. Additionally, effective with our modified retrospective adoption of ASU 2016-09 on January 1, 2017, excess income tax benefits related to stock based compensation amounting to $45.2 million during 2016 are reflected as cash inflows from operating activities in our Consolidated Statement of Cash Flows. Prior to the adoption of ASU 2016-09, excess income tax benefits related to stock based compensation were reflected as cash inflows from financings activities in our Consolidated Statement of Cash Flows. In 2005, we adopted the 2005 Stock Incentive Plan which was amended in 2008, 2010, 2015 and 2017 (the “Stock Incentive Plan”). An aggregate of 35.6 million shares of Class B Common Stock has been reserved under the Stock Incentive Plan. During 2018, 2017 and 2016, stock options, net of cancellations, of approximately 2.4 million, 2.9 million and 2.7 million, respectively, were granted. Stock options to purchase Class B Common Stock have been granted to our officers, key employees and members of our Board of Directors. Commencing in 2018, our key employees and non-executive officers began receiving a portion of their stock-based compensation in the form of restricted stock (as discussed below) in addition to receiving options to purchase Class B Common Stock. The per option weighted-average grant-date fair value of options granted during 2018, 2017 and 2016 was $28.19, $27.05 and, $23.80, respectively. All stock options were granted with an exercise price equal to the fair market value on the date of the grant. Options are exercisable ratably over a four-year period beginning one year after the date of the grant. All outstanding options expire five years after the date of the grant. As of December 31, 2018, approximately 6.2 million shares of Class B Common Stock remain available for issuance pursuant to the Stock Incentive Plan. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model. The following weighted average assumptions were derived from averaging the number of options granted during the most recent five-year period. The weighted-average assumptions reflected below were based upon twenty-seven option grants for the five-year period ending December 31, 2018, twenty-seven option grants for the five-year period ending December 31, 2017 and twenty-seven option grants for the five-year period ending December 31, 2016.
Year Ended December 31, |  | 2018 |  |  | 2017 |  |  | 2016 |
Volatility |  |  | 27 | % |  |  | 28 | % |  |  | 31 | %
Interest rate |  |  | 1 | % |  |  | 1 | % |  |  | 1 | %
Expected life (years) |  |  | 3.4 |  |  |  | 3.4 |  |  |  | 3.4 |
Forfeiture rate |  |  | 13 | % |  |  | 10 | % |  |  | 10 | %
Dividend yield |  |  | 0.3 | % |  |  | 0.4 | % |  |  | 0.4 | %
The risk-free rate is based on the U.S. Treasury zero coupon four year yield in effect at the time of grant. The expected life of the stock options granted was estimated using the historical behavior of employees. Expected volatility was based on historical volatility for a period equal to the stock option’s expected life. Expected dividend yield is based on our dividend yield at the time of grant. The forfeiture rate is based upon the actual historical forfeitures utilizing the 5-year term of the option. The table below summarizes our stock option activity during each of the last three years:
Outstanding Options |  | Number of Shares |  |  | Average Option Price |  |  | Range (High-Low)
Balance, January 1, 2016 |  |  | 8,400,183 |  |  | $ | 80.50 |  |  | $142.43-$36.95
Granted |  |  | 2,945,550 |  |  | $ | 118.72 |  |  | $138.00-$107.39
Exercised |  |  | (2,162,850 | ) |  | $ | 53.02 |  |  | $117.29-$36.95
Cancelled |  |  | (412,750 | ) |  | $ | 103.01 |  |  | $130.32-$36.95
Balance, January 1, 2017 |  |  | 8,770,133 |  |  | $ | 99.06 |  |  | $142.43-$36.95
Granted |  |  | 3,061,725 |  |  | $ | 124.38 |  |  | $124.56-$110.15
Exercised |  |  | (1,734,409 | ) |  | $ | 64.41 |  |  | $118.62-$36.95
Cancelled |  |  | (457,500 | ) |  | $ | 118.65 |  |  | $142.43-$53.38
Balance, January 1, 2018 |  |  | 9,639,949 |  |  | $ | 112.40 |  |  | $138.00-$53.38
Granted |  |  | 2,567,653 |  |  | $ | 119.73 |  |  | $127.29-$112.68
Exercised |  |  | (1,591,859 | ) |  | $ | 100.95 |  |  | $124.56-$53.38
Cancelled |  |  | (940,952 | ) |  | $ | 121.07 |  |  | $136.00-$78.17
Balance, December 31, 2018 |  |  | 9,674,791 |  |  | $ | 115.39 |  |  | $138.00-$78.17
Outstanding options vested and exercisable as of December 31, 2018 |  |  | 3,724,179 |  |  | $ | 106.77 |  |  | $138.00-$78.17
The following table provides information about unvested options for the year ending December 31, 2018:
|  | Shares |  |  | Weighted Average Grant Date Fair Value |
Unvested options as of January 1, 2018 |  |  | 6,770,603 |  |  | $ | 24.16 |
Granted |  |  | 2,567,653 |  |  | $ | 28.19 |
Vested |  |  | (2,568,379 | ) |  | $ | 22.60 |
Cancelled |  |  | (819,265 | ) |  | $ | 25.87 |
Unvested options as of December 31, 2018 |  |  | 5,950,612 |  |  | $ | 26.34 |
The following table provides information regarding all options outstanding at December 31, 2018:
|  | Options Outstanding |  |  | Options Exercisable |
Number of options outstanding |  |  | 9,674,791 |  |  |  | 3,724,179 |
Weighted average exercise price |  | $ | 115.39 |  |  | $ | 106.77 |
Aggregate intrinsic value as of December 31, 2018 |  | $ | 43,806,400 |  |  | $ | 43,594,160 |
Weighted average remaining contractual life |  |  | 2.6 |  |  |  | 1.4 |
The total in-the-money value of all stock options exercised during the years ended December 31, 2018, 2017 and 2016 were $39.9 million, $85.5 million and $149.4 million, respectively. The weighted average remaining contractual life for options outstanding and weighted average exercise price per share for exercisable options at December 31, 2018 were as follows:
Exercise Price |  | Options Outstanding |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Contractual Life (in Years) |  |  | Exercisable Options |  |  | Weighted Average Exercise Price Per Share |  |  | Expected to Vest Options (a) |  |  | Weighted Average Exercise Price Per Share |
|  | Shares |  |  |  |  |  |  |  |  |  |  | Shares |  |  |  |  |  |  | Shares |  |  |  |  |
$78.17 – $96.98 |  |  | 1,134,475 |  |  | $ | 78.17 |  |  |  | 0.2 |  |  |  | 1,134,475 |  |  | $ | 78.17 |  |  | N/A |  |  | $ | 78.17 |
$102.21 – $118.60 |  |  | 1,788,801 |  |  |  | 117.14 |  |  |  | 1.3 |  |  |  | 1,183,150 |  |  |  | 117.25 |  |  |  | 572,521 |  |  |  | 117.14 |
$118.62 – $124.22 |  |  | 4,288,690 |  |  |  | 119.19 |  |  |  | 3.3 |  |  |  | 854,088 |  |  |  | 118.64 |  |  |  | 2,265,877 |  |  |  | 119.19 |
$124.44 – $138.00 |  |  | 2,462,825 |  |  |  | 124.65 |  |  |  | 3.2 |  |  |  | 552,466 |  |  |  | 124.68 |  |  |  | 1,575,926 |  |  |  | 124.65 |
Total |  |  | 9,674,791 |  |  | $ | 115.39 |  |  |  | 2.6 |  |  |  | 3,724,179 |  |  | $ | 106.77 |  |  |  | 4,414,324 |  |  | $ | 120.82 |
(a) | Assumes a weighted average forfeiture rate of 13.06%.
Under our Amended and Restated 2010 Employees’ Restricted Stock Purchase Plan (the “Restricted Stock Plan”), which allows eligible participants to purchase shares of Class B Common Stock at par value, subject to certain restrictions, 600,000 shares of Class B Common Stock have been reserved. During 2018, 2017 and 2016, restricted shares, net of cancellations, of approximately 136,571, 23,557, and 13,021, respectively, were granted and issued, with various ratable vesting periods ranging up to five years from the date of grant. The weighted-average grant-date fair value of the restricted shares granted during 2018, 2017 and 2016 was $119.51, $118.14 and $120.26, respectively. The fair value of each restricted stock grant was determined as the closing UHS market price on the date of grant. Restricted shares of Class B Common Stock have been granted to our officers and key employees. In addition to the Stock Incentive Plan and the Restricted Stock Plan, we have our 2005 Employee Stock Purchase Plan (the “Employee Stock Plan”) which allows eligible employees to purchase shares of Class B Common Stock at a ten percent discount. There were 87,051, 86,693 and 75,792 and shares issued pursuant to the Employee Stock Purchase Plan during 2018, 2017 and 2016, respectively. In connection with the Restricted Stock Plan and the Employee Stock Plan, we have reserved 2.6 million shares of Class B Common Stock for issuance and have issued approximately 1.6 million shares, net of cancellations, as of December 31, 2018. As of December 31, 2018, approximately 1.0 million shares of Class B Common Stock remain available for issuance pursuant to these plans. At December 31, 2018, 24,230,875 shares of Class B Common Stock were reserved for issuance upon conversion of shares of Class A, C and D Common Stock outstanding, for issuance upon exercise of options to purchase Class B Common Stock and for issuance of stock under other incentive plans. Class A, C and D Common Stock are convertible on a share for share basis into Class B Common Stock.

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