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Note 24 BASIC AND DILUTED EARNINGS PER SHARE
 12 Months Ended
Dec. 31, 2012
Earnings Per Share [Text Block]
NOTE 24 BASIC AND DILUTED EARNINGS PER SHARE

Basic EPS excludes common stock equivalents and is calculated by dividing net income attributable to Ocwen common stockholders 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 preferred stock dividends and 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, the Preferred Shares and the Convertible Notes. The following is a reconciliation of the calculation of basic EPS to diluted EPS for the years ended December 31:


    2012     2011     2010  
Basic EPS:                        
Net income attributable to Ocwen common stockholders   $ 180,778     $ 78,331     $ 37,984  
                         
Weighted average shares of common stock     133,912,643       104,507,055       100,273,121  
                         
Basic EPS   $ 1.35     $ 0.75     $ 0.38  
                         
Diluted EPS:                        
Net income attributable to Ocwen common stockholders   $ 180,778     $ 78,331     $ 37,984  
Preferred stock dividends (1)     —       —       —  
Interest expense on Convertible Notes, net of income tax (2)     107       1,187       1,122  
Adjusted net income attributable to Ocwen   $ 181,885     $ 79,518     $ 39,106  
                         
Weighted average shares of common stock     133,912,643       104,507,055       100,273,121  
Effect of dilutive elements:                        
Preferred Shares (1)     —       —       —  
Convertible Notes (2)     1,008,891       4,637,224       4,637,224  
Stock options     3,593,419       2,711,682       2,571,282  
Common stock awards     6,326       —       1,388  
Dilutive weighted average shares of common stock     138,521,279       111,855,961       107,483,015  
                         
Diluted EPS   $ 1.31     $ 0.71     $ 0.36  
                         
Stock options excluded from the computation of diluted EPS:                        
Anti-dilutive(3)     143,125       27,031       20,000  
Market-based(4)     1,535,000       468,750       1,615,000  

(1) The effect of our Preferred Shares on diluted EPS is computed using the if-converted method. We assumed no conversion to common shares for 2012 because the effect was anti-dilutive.
(2) Prior to the redemption of the Convertible Notes in March 2012, we also computed their effect on diluted EPS using the if-converted method. Interest expense and related amortization costs applicable to the Convertible Notes, net of income tax, were added back to net income. As disclosed in Note 15, we issued 4,635,159 shares of common stock upon conversion of $56,410 of the Convertible Notes.
(3) These stock options were anti-dilutive because their exercise price was greater than the average market price of our stock.
(4) 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 25 for additional information regarding these market-condition options.