Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Share-based Compensation Plans

Our share-based compensation plans at December 31, 2022 are as follows:

	Shares		Shares Underlying		Shares
	Authorized		Awards		Available
Plan Name	for Grant		Outstanding		for Grant
2021 Plan		13,467,480		3,851,825		3,689,156
2014 Plan		—		3,588,486		—
Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan, as amended		—		672,500		—

Stock Option Activity

Stock option activity for the year ended December 31, 2022 follows:

				Weighted Average
	Shares			Exercise Price Per Share
Outstanding at beginning of year		3,720,150		$	20.93
Exercised		(640,000	)	$	16.20
Expired		(175,000	)	$	17.37
Outstanding at end of year		2,905,150		$	22.19
Exercisable at end of year		2,905,150		$	22.19

Additional Information with Respect to Non-vested Options

Additional information with respect to options granted, vested and exercised during the years ended December 31, 2022, 2021 and 2020 follows (in thousands, except per share data):

	2022		2021		2020
Weighted-average grant date fair value of stock options granted (per share)	NA		NA		NA
Aggregate grant date fair value of stock options vested during the year	$	—	$	89	$	89
Aggregate intrinsic value of stock options exercised	$	410	$	—	$	—

Restricted Stock Activity

Restricted stock unit activity for the year ended December 31, 2022 follows:

						Weighted Average
	Time			Performance		Grant Date Fair
	Based			Based		Value Per Share
Non-vested restricted stock units outstanding at beginning of year		3,044,719			359,315	$	8.31
Granted		1,554,849			—	$	17.37
Vested		(1,437,286	)		—	$	7.32
Forfeited		(71,436	)		—	$	13.15
Non-vested restricted stock units outstanding at end of year		3,090,846			359,315	$	12.71

Restricted Stock Unit Activity

Additional information as of December 31, 2022 with respect to these non-vested restricted stock units follows (dollars in thousands):

Aggregate intrinsic value	$	54,672
Weighted-average remaining vesting period	1.40 years
Unrecognized compensation cost	$	25,998

Performance Units

The total target number of shares with respect to the Performance Units for the years 2017-2022 is set forth below:

	2022		2021		2020		2019		2018		2017
	Performance		Performance		Performance		Performance		Performance		Performance
	Unit Awards		Unit Awards		Unit Awards		Unit Awards		Unit Awards		Unit Awards
Target number of shares		414,000		843,000		500,500		489,800		310,700		186,198

Fair Value of Performance Units

The fair value of the Performance Units is set forth below (in thousands):

	2022		2021		2020		2019		2018		2017
	Performance		Performance		Performance		Performance		Performance		Performance
	Unit Awards		Unit Awards		Unit Awards		Unit Awards		Unit Awards		Unit Awards
Aggregate fair value at date of grant	$	10,743	$	7,225	$	826	$	9,958	$	8,004	$	5,780

Compensation Expense Associated with Performance Units

Compensation expense associated with the Performance Units is set forth below (in thousands):

	2022		2021		2020		2019		2018		2017
	Performance		Performance		Performance		Performance		Performance		Performance
	Unit Awards		Unit Awards		Unit Awards		Unit Awards		Unit Awards		Unit Awards
Year ended December 31, 2022	$	2,686	$	2,408	$	275	$	830	NA		NA
Year ended December 31, 2021	NA		$	1,806	$	275	$	3,319	$	667	NA
Year ended December 31, 2020	NA		NA		$	206	$	3,319	$	2,668	$	642

Schedule of Weighted Average Assumptions Used to Estimate Fair Value of Options

The weighted-average fair value calculations for performance units granted during the years ended December 31, 2022, 2021 and 2020 were based on the following weighted-average assumptions set forth below:

	2022			2021			2020
Risk-free interest rate (1)		2.9	%		0.4	%		0.4	%
Expected stock volatility (2)		86.5	%		83.2	%		66.2	%
Expected dividend yield (3)		1.0	%		1.3	%		7.7	%
Expected term (in years)		3			3			3

(1)The risk-free interest rate is based on U.S. Treasury securities for the expected term of the performance units.

(2)Expected volatilities are based on the daily closing price of our stock based upon historical experience over a three-year period.

(3)Expected dividend yield is based on the annualized dividend in effect on the measurement date and the stock price on the grant date.