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,
	2020			2019
Basic and Diluted:
Net income attributable to UHS	$	142,037		$	234,168
Less: Net income attributable to unvested restricted share grants		(373	)		(515	)
Net income attributable to UHS – basic and diluted	$	141,664		$	233,653

Weighted average number of common shares - basic		86,212			90,776
Net effect of dilutive stock options and grants based on the treasury stock method		243			191
Weighted average number of common shares and equivalents - diluted		86,455			90,967
Earnings per basic share attributable to UHS:	$	1.64		$	2.57
Earnings per diluted share attributable to UHS:	$	1.64		$	2.57

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 5.9 million for the three months ended March 31, 2020 and 7.0 million for the three months ended March 31, 2019. 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, 2020, as compared to the comparable prior year quarter, was due primarily to the impact of shares repurchased by us since January 1, 2019.

During the three-month periods ended March 31, 2020 and 2019, pre-tax compensation cost of $15.3 million and $15.8 million, respectively, was recognized related to outstanding stock options. In addition, during the three-month periods ended March 31, 2020 and 2019, pre-tax compensation cost of approximately $2.4 million and $1.5 million (net of cancellations), respectively, was recognized related to restricted stock. As of March 31, 2020 there was approximately $143.8 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 2.8 years. There were 2,527,966 stock options granted during the first three months of 2020 with a weighted-average grant date fair value of $14.14 per share. There were 124,167 shares of restricted shares granted during the first three months of 2020 with a weighted-average grant date fair value of $67.69 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 and $17.6 million during the three month periods ended March 31, 2020 and 2019, respectively.