EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2013

EARNINGS PER SHARE

EARNINGS PER SHARE

NOTE 16 — 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 using the treasury stock method.

Basic and diluted EPS are calculated as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands, except per share data)	2013		2012		2013		2012
Net income attributable to Altisource	$	36,008	$	27,024	$	94,457	$	80,334
Weighted average common shares outstanding, basic	23,025		23,338		23,185		23,347
Dilutive effect of stock options	2,308		1,678		1,885		1,548
Weighted average common shares outstanding, diluted	25,333		25,016		25,070		24,895
Earnings per share
Basic	$	1.56	$	1.16	$	4.07	$	3.44
Diluted	$	1.42	$	1.08	$	3.77	$	3.23

For the nine months ended September 30, 2013 and 2012, less than 0.1 million options (less than 0.1 million for the third quarter of 2013 and 2012), 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, 2013 and 2012 are 0.1 million and 0.3 million options, respectively (0.1 million and 0.2 million options for the third quarter of 2013 and 2012, 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.