EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2012

EARNINGS PER SHARE

EARNINGS PER SHARE

NOTE 14 — EARNINGS PER SHARE

Basic earnings per share (“EPS”) is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the assumed conversion of all dilutive securities.

Basic and diluted EPS for the three and nine months ended September 30, 2012 and 2011 are calculated as follows:

	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands except per share data)	2012		2011		2012		2011
Net income attributable to Altisource	$	27,024	$	17,171	$	80,334	$	45,381
Weighted-average common shares outstanding, basic	23,338		24,341		23,347		24,602
Dilutive effect of stock options	1,678		1,148		1,548		1,118
Weighted-average common shares outstanding, diluted	25,016		25,489		24,895		25,720
Earnings per share
Basic	$	1.16	$	0.71	$	3.44	$	1.84
Diluted	$	1.08	$	0.67	$	3.23	$	1.76

For each of the three and nine months ended September 30, 2012 and September 30, 2011, an immaterial amount of options that were anti-dilutive have been excluded from the computation of diluted EPS. These options were anti-dilutive because their exercise price was greater than the average market price of our common stock. Also excluded from the computation of diluted EPS for the nine months ended September 30, 2012 and 2011 are 0.3 million and 0.7 million options, respectively (0.2 million and 0.7 million for the three months ended September 30, 2012 and 2011, respectively), granted for shares that are issuable upon the achievement of certain market and performance criteria related to our common stock price and an annualized rate of return to investors that have not been met at this point.