(7) Earnings Per Share Data ("EPS") and Stock Based Compensation

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,
	2012			2011
Basic and Diluted:
Net income attributable to UHS	$	128,607		$	114,193
Less: Net income attributable to unvested restricted share grants		(168	)		(149	)

Net income attributable to UHS – basic and diluted	$	128,439		$	114,044

Weighted average number of common shares - basic		96,593			97,381
Net effect of dilutive stock options and grants based on the treasury stock method		1,198			1,487

Weighted average number of common shares and equivalents - diluted		97,791			98,868

Earnings per basic share attributable to UHS:	$	1.33		$	1.17

Earnings per diluted share attributable to UHS:	$	1.31		$	1.15

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 2.7 million for the three months ended March 31, 2012. There were no significant anti-dilutive stock options during the three months ended March 31, 2011. All classes of our common stock have the same dividend rights.

Stock-Based Compensation: During the three-month periods ended March 31, 2012 and 2011, compensation cost of $4.9 million ($3.0 million after-tax) and $3.5 million ($2.1 million after-tax), respectively, was recognized related to outstanding stock options. In addition, during the three-month periods ended March 31, 2012 and 2011, compensation cost of approximately $577,000 ($359,000 after-tax) and $451,000 ($277,000 after-tax), respectively, was recognized related to restricted stock. As of March 31, 2012 there was $50.5 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 3.1 years. There were 2,902,950 stock options granted (net of cancellations) during the first three months of 2012 with a weighted-average grant date fair value of $10.72 per share. There were 54,127 restricted stock shares granted during the first three months of 2012, with a weighted-average grant date fair value of $36.95 per share.