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 March 31,
	2021			2020
Basic and Diluted:
Net income attributable to UHS	$	209,091		$	142,037
Less: Net income attributable to unvested restricted share grants		(552	)		(373	)
Net income attributable to UHS – basic and diluted	$	208,539		$	141,664

Weighted average number of common shares - basic		84,782			86,212
Net effect of dilutive stock options and grants based on the treasury stock method		1,014			243
Weighted average number of common shares and equivalents - diluted		85,796			86,455
Earnings per basic share attributable to UHS:	$	2.46		$	1.64
Earnings per diluted share attributable to UHS:	$	2.43		$	1.64

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 4.6 million for the three months ended March 31, 2021 and 5.9 million for the three months ended March 31, 2020. All classes of our common stock have the same dividend rights.

The decrease in our basic and diluted weighted number of common shares outstanding for the three months ended March 31, 2021, as compared to the comparable prior year three months, was due primarily to the impact of shares repurchased by us.

During the three-month periods ended March 31, 2021 and 2020, pre-tax compensation cost of $14.8 million and $15.3 million, respectively, was recognized related to outstanding stock options. In addition, during the three-month periods ended March 31, 2021 and 2020, pre-tax compensation cost of approximately $2.9 million and $2.4 million (net of cancellations), respectively, was recognized related to restricted stock. As of March 31, 2021 there was approximately $182.2 million of unrecognized compensation cost related to unvested options and restricted stock awards and units which is expected to be recognized over the remaining weighted average vesting period of 3.1 years. There were 2,389,902 stock options granted during the first three months of 2021 (including 406,982 stock options granted at a 10% market price premium) with a weighted-average grant date fair value of $39.65 per option. There were 150,860 shares of restricted shares and restricted units granted during the first three months of 2021 with a weighted-average grant date fair value of $138.80 per share.

The expense associated with stock-based compensation arrangements is a non-cash charge. In the Condensed 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 $18.0 million during each of the three month periods ended March 31, 2021 and 2020.