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)	2017		2016		2017		2016

Net income attributable to Altisource	$	6,961	$	10,589	$	22,541	$	49,077

Weighted average common shares outstanding, basic	18,023		18,715		18,337		18,669
Dilutive effect of stock options and restricted shares	406		853		517		1,069

Weighted average common shares outstanding, diluted	18,429		19,568		18,854		19,738

Earnings per share:
Basic	$	0.39	$	0.57	$	1.23	$	2.63

Diluted	$	0.38	$	0.54	$	1.20	$	2.49

For the nine months ended September 30, 2017 and 2016, 0.5 million options and 0.4 million options, respectively, that were anti-dilutive have been excluded from the computation of diluted EPS (0.9 million options and 0.4 million options for the third quarter of 2017 and 2016, respectively). These options were anti-dilutive and excluded from the computation of diluted EPS because their exercise price was greater than the average market price of our common stock. Also excluded from the computation of diluted EPS are 0.3 million options and restricted shares and 0.4 million options for the nine months ended September 30, 2017 and 2016, respectively (0.4 million options and restricted shares and 0.4 million options for the third quarter of 2017 and 2016, respectively), which begin to vest upon the achievement of certain market criteria related to our common stock price, performance criteria and an annualized rate of return to shareholders that have not yet been met.