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NOTE 21 BASIC AND DILUTED EARNINGS PER SHARE (EPS) (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share, Basic and Diluted [Abstract]

Schedule of reconciliation of calculation of basic EPS to diluted EPS

	Three Months				Nine Months
	2013		2012		2013		2012
Basic EPS:
Net income attributable to Ocwen common stockholders	$	61,155	$	51,400	$	177,847	$	115,582

Weighted average shares of common stock		135,787,834		134,928,486		135,705,892		133,483,354

Basic EPS	$	0.45	$	0.38	$	1.31	$	0.87

Diluted EPS:
Net income attributable to Ocwen common stockholders	$	61,155	$	51,400	$	177,847	$	115,582
Preferred stock dividends (1)		—		—		—		—
Interest expense on Convertible Notes, net of income tax (2)		—		—		—		98
Adjusted net income attributable to Ocwen	$	61,155	$	51,400	$	177,847	$	115,680

Weighted average shares of common stock		135,787,834		134,928,486		135,705,892		133,483,354
Effect of dilutive elements:
Preferred Shares (1)		—		—		—		—
Convertible Notes (2)		—		—		—		1,347,642
Stock options		4,263,965		3,769,099		4,030,297		3,468,156
Common stock awards		5,396		5,296		11,301		2,713
Dilutive weighted average shares of common stock		140,057,195		138,702,881		139,747,490		138,301,865

Diluted EPS	$	0.44	$	0.37	$	1.27	$	0.84

Stock options excluded from the computation of diluted EPS:
Anti-dilutive (3)		—		255,000		—		190,833
Market-based (4)		547,500		1,726,250		547,500		1,726,250

(1)

The effect of our Preferred Shares on diluted EPS is computed using the if-converted method. For the three and nine months ended September 30, 2013, we assumed no conversion to common shares because the effect was anti-dilutive.

(2)

Prior to the redemption of the 3.25% 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. We assumed the conversion of the Convertible Notes into shares of common stock for purposes of computing diluted EPS unless the effect was anti-dilutive. We issued 4,635,159 shares of common stock upon conversion of $56.4 million 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.