Sistemas de comunicación De acuerdo con Ligia Paredes (1995) 22 e l

The fair values of the options granted during the years ended December 31, 2013 , 2012 , and 2011 have been estimated at the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions:

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including the expected stock price volatility. We estimate our expected term through an analysis of actual, historical post-vesting exercise, cancellation, and expiration behavior by our employees and projected post-vesting activity of outstanding options. We calculate volatility based on the historical volatility of our common stock over the period commensurate with the expected life of the options. The risk-free interest rate is the implied daily yield currently available on U.S. Treasury issues with a remaining term closely approximating the expected term used as the input to the Black- Scholes option-pricing model. While our board of directors initiated quarterly dividends of $0.18 per common share in 2013 (see Note 17,

Earnings per Common Share ), we did not include a dividend payment as part of our pricing model because we had not historically paid

dividends at the time of our option grants. We estimate forfeitures through an analysis of actual, historical pre-vesting option forfeiture activity. Under the Black-Scholes option-pricing model, the weighted-average fair value per share of employee stock options granted during the years ended December 31, 2013 , 2012 , and 2011 was $10.96 , $9.57 , and $11.27 , respectively.

A summary of our stock option activity and related information is as follows:

We recognized approximately $2.1 million , $2.0 million , and $1.7 million of compensation expense related to our stock options for the years ended December 31, 2013 , 2012 , and 2011 , respectively. As of December 31, 2013 , there was $2.1 million of unrecognized

compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of 19 months. The total intrinsic value of options exercised during the years ended December 31, 2013 , 2012 , and 2011 was $1.9 million , $0.1 million , and $0.8 million , respectively.

Restricted Stock—

The restricted stock awards granted in 2013 , 2012 , and 2011 included service-based awards, performance-based awards (that also included a service requirement), and market condition awards (that also included a service requirement). These awards generally vest over a three-year requisite service period. For awards with a service and/or performance requirement, the fair value of the award is determined by the closing price of our common stock on the grant date. For awards

Notes to Consolidated Financial Statements

For the Year Ended December 31,

2013 2012 2011

Expected volatility 41.8 % 42.8 % 41.5 %

Risk-free interest rate 1.4 % 1.4 % 2.8 %

Expected life (years) _{7.2 7.0 6.7}

Dividend yield 0.0 % 0.0 % 0.0 %

Shares (In Thousands)

Weighted- Average Exercise Price per

Share Weighted- Average Remaining Life (Years) Aggregate Intrinsic Value (In Millions) Outstanding, December 31, 2012 _{2,575 $ 21.12} Granted _{141 24.17} Exercised (338 ) _24.39 Forfeitures _{— —} Expirations (17 ) 24.47 Outstanding, December 31, 2013 2,361 20.82 4.5 $ 29.5 Exercisable, December 31, 2013 1,991 _{20.45 3.8 25.6}

with a market condition, the fair value of the awards is determined using a lattice model. Inputs into the model include the historical price volatility of our common stock, the historical volatility of the common stock of the companies in the defined peer group, and the risk free interest rate. Utilizing these inputs and potential future changes in stock prices, multiple trials are run to determine the fair value.

A summary of our issued restricted stock awards is as follows (share information in thousands):

The weighted-average grant date fair value of restricted stock granted during the years ended December 31, 2012 and 2011 was $19.30 and $8.23 per share, respectively. We recognized approximately $21.6 million , $21.2 million , and $17.7 million of compensation expense related to our restricted stock awards for the years ended December 31, 2013 , 2012 , and 2011 , respectively. As of December 31, 2013 , there was $22.0 million of unrecognized compensation expense related to unvested restricted stock. This cost is expected to be recognized over a weighted-average period of 20 months. The remaining unrecognized compensation expense for the performance-based awards may vary each reporting period based on changes in the expected achievement of performance measures. The total fair value of shares vested during the years ended December 31, 2013 , 2012 , and 2011 was $15.7 million , $34.0 million , and $12.5 million , respectively.

Nonemployee Stock-Based Compensation Plans—

During the years ended December 31, 2013 , 2012 , and 2011 , we provided incentives to our nonemployee members of our board of directors through the issuance of RSUs out of our share-based incentive plans. RSUs are fully vested when awarded and receive dividend equivalents in the form of additional RSUs upon the payment of a cash dividend on our common stock. During the years ended December 31, 2013 , 2012 , and 2011 , we issued 53,011 , 42,903 , and 37,332 RSUs, respectively, with a fair value of $22.47 , $20.98 , and $24.11 ,

respectively, per unit. We recognized approximately $1.2 million , $0.9 million , and $0.9 million , respectively, of compensation expense upon their issuance in 2013 , 2012 , and 2011 . There was no unrecognized compensation related to unvested shares as of December 31, 2013 . As of December 31, 2013 , 357,308 RSUs were outstanding.

Substantially all HealthSouth employees are eligible to enroll in HealthSouth-sponsored healthcare plans, including coverage for medical and dental benefits. Our primary healthcare plans are national plans administered by third-party administrators. We are self-insured for these plans. During 2013 , 2012 , and 2011 , costs associated with these plans, net of amounts paid by employees, approximated $73.4 million , $67.8 million , and $66.8 million , respectively.

The HealthSouth Retirement Investment Plan is a qualified 401(k) savings plan. The plan allows eligible employees to contribute up to 100% of their pay on a pre-tax basis into their individual retirement account in the plan subject to the normal maximum limits set annually by the Internal Revenue Service. HealthSouth’s employer matching contribution is 50% of the first 6% of each participant’s elective deferrals . All contributions to the plan are in the form of cash. Employees who are at least 21 years of age are eligible to participate in the plan. Employer contributions vest 100% after three years of service. Participants are always fully vested in their own contributions.

Employer contributions to the HealthSouth Retirement Investment Plan approximated $13.2 million , $13.2 million , and $12.6 million in 2013 , 2012 , and 2011 , respectively. In 2013 , 2012 , and 2011 , approximately $0.5 million , $0.8 million ,

F-44

Notes to Consolidated Financial Statements

Shares

Weighted-Average Grant Date Fair

Value

Nonvested shares at December 31, 2012 _{1,048 $ 19.28}

Granted _{847 23.55}

Vested (690 ) _18.25

Forfeited (43 ) _22.67

Nonvested shares at December 31, 2013 1,162 _22.89