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NOTE 25 BASIC AND DILUTED EARNINGS PER SHARE
 12 Months Ended
Dec. 31, 2011
Earnings Per Share [Text Block]

NOTE 25 BASIC AND DILUTED EARNINGS PER SHARE


Basic EPS excludes common stock equivalents and is calculated by dividing net income attributable to OCN by the weighted average number of common shares outstanding during the year. We calculate diluted EPS by dividing net income attributable to OCN, as adjusted to add back interest expense net of income tax on the Convertible Notes, by the weighted average number of common shares outstanding including the potential dilutive common shares related to outstanding stock options, restricted stock awards and the Convertible Notes. The following is a reconciliation of the calculation of basic EPS to diluted EPS for the years ended December 31:


   

2011

   

2010

   

2009

 
Basic EPS:                  
Net income attributable to OCN   $ 78,331     $ 37,984     $ 297  
                         
Weighted average shares of common stock     104,507,055       100,273,121       78,252,000  
                         
Basic EPS   $ 0.75     $ 0.38     $ —  
                         
Diluted EPS:                        
Net income attributable to OCN   $ 78,331     $ 37,984     $ 297  
Interest expense on Convertible Notes, net of income tax (1)     1,187       1,122       —  
Adjusted net income attributable to OCN   $ 79,518     $ 39,106     $ 297  
                         
Weighted average shares of common stock     104,507,055       100,273,121       78,252,000  
Effect of dilutive elements:                        
Convertible Notes (1)     4,637,224       4,637,224       —  
Stock options (2) (3)     2,711,682       2,571,282       —  
Common stock awards     —       1,388       —  
Dilutive weighted average shares of common stock     111,855,961       107,483,015       78,252,000  
                         
Diluted EPS   $ 0.71     $ 0.36     $ —  
                         
Stock options excluded from the computation of diluted EPS:                        
Anti-dilutive (2)     27,031       20,000       557,080  
Market-based (3)     468,750       1,615,000       1,788,750  

(1) The effect of our Convertible Notes on diluted EPS is computed using the if-converted method. Interest expense and related amortization costs applicable to the Convertible Notes, net of income tax, are added back to net income. Conversion of the Convertible Notes into shares of common stock has not been assumed for purposes of computing diluted EPS for the 2009 because the effect would be anti-dilutive. The effect is anti-dilutive whenever interest expense on the Convertible Notes, net of income tax, per common share obtainable on conversion exceeds basic EPS.

(2) These stock options were anti-dilutive because their exercise price was greater than the average market price of our stock.
   
(3) Shares that are issuable upon the achievement of certain performance criteria related to OCN’s stock price and an annualized rate of return to investors. See Note 26 for additional information regarding these market-condition options.