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)	2018		2017		2018		2017

Net income attributable to Altisource	$	8,667	$	6,961	$	6,103	$	22,541

Weighted average common shares outstanding, basic	17,033		18,023		17,184		18,337
Dilutive effect of stock options, restricted shares and restricted share units	542		406		485		517

Weighted average common shares outstanding, diluted	17,575		18,429		17,669		18,854

Earnings per share:
Basic	$	0.51	$	0.39	$	0.36	$	1.23
Diluted	$	0.49	$	0.38	$	0.35	$	1.20

For the nine months ended September 30, 2018 and 2017, 0.3 million options and 0.5 million options, respectively (0.1 million options and 0.9 million options for the third quarter of 2018 and 2017, respectively), were excluded from the computation of diluted EPS because they were anti-dilutive since 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, 2018 and 2017 were 0.5 million options, restricted shares and restricted share units and 0.3 million options and restricted shares, respectively (0.5 million options, restricted shares and restricted share units and 0.4 million options and restricted shares for the third quarter of 2018 and 2017, 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.