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Basic and Diluted Earnings per Share
 12 Months Ended
Dec. 31, 2013
Earnings Per Share [Abstract]  
Basic and Diluted Earnings per Share
Note 23 — 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 Ocwen, as adjusted to add back preferred stock dividends and interest expense net of income tax on the 3.25% 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 3.25% Convertible Notes. The following is a reconciliation of the calculation of basic EPS to diluted EPS for the years ended December 31:
 
2013
 
2012
 
2011
Basic EPS:
 
 
 
 
 
Net income attributable to Ocwen common stockholders
$
282,129

 
$
180,778

 
$
78,331

 
 
 
 
 
 
Weighted average shares of common stock
135,678,088

 
133,912,643

 
104,507,055

 
 
 
 
 
 
Basic EPS
$
2.08

 
$
1.35

 
$
0.75

 
 
 
 
 
 
Diluted EPS:
 
 
 
 
 
Net income attributable to Ocwen common stockholders
$
282,129

 
$
180,778

 
$
78,331

Preferred stock dividends (1)
—

 
—

 
—

Interest expense on 3.25% Convertible Notes, net of income tax (2)
—

 
107

 
1,187

Adjusted net income attributable to Ocwen
$
282,129

 
$
180,885

 
$
79,518

 
 
 
 
 
 
Weighted average shares of common stock
135,678,088

 
133,912,643

 
104,507,055

Effect of dilutive elements:
 
 
 
 
 
Preferred Shares (1)
—

 
—

 
—

3.25% Convertible Notes (2)
—

 
1,008,891

 
4,637,224

Stock options
4,110,355

 
3,593,419

 
2,711,682

Common stock awards
12,063

 
6,326

 
—

Dilutive weighted average shares of common stock
139,800,506

 
138,521,279

 
111,855,961

 
 
 
 
 
 
Diluted EPS
$
2.02

 
$
1.31

 
$
0.71

 
 
 
 
 
 
Stock options excluded from the computation of diluted EPS:
 
 
 
 
 
Anti-dilutive(3)
—

 
143,125

 
27,031

Market-based(4)
547,500

 
1,535,000

 
468,750

 
(1)
The effect of our Preferred Shares on diluted EPS is computed using the if-converted method. For purposes of computing diluted EPS, we assume the conversion of the Preferred Shares into shares of common stock unless the effect is anti-dilutive. Conversion of the Preferred Shares has not been assumed for 2013 and 2012 because the effect would have been antidilutive. There were no Preferred Shares outstanding during 2011.
(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 3.25% Convertible Notes, net of income tax, were added back to net income. We assumed the conversion of the 3.25% Convertible Notes into shares of common stock unless the effect was anti-dilutive. On March 28, 2012, we issued 4,635,159 shares of common stock upon conversion of $56.4 million of the 3.25% 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 Ocwen’s stock price and an annualized rate of return to investors. See Note 24 — Employee Compensation and Benefit Plans for additional information regarding these market-condition options.