Net Income Per Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Net Income Per Share

NET INCOME PER SHARE

Predecessor Ambac common stock (and related stock options and restricted stock units) was canceled upon emergence from bankruptcy on the Effective Date. Pursuant to the Reorganization Plan, 45,000,000 shares of new common stock at par value of $0.01 per share and 5,047,138 warrants were issued. Warrants entitle such holders to acquire up to 5,047,138 shares of new common stock at an exercise price of $16.67 per share at any time on or prior to April 30, 2023. For the three months ended March 31, 2014, 51 warrants were exercised, resulting in an issuance of 51 shares of common stock. As of March 31, 2014, Successor Ambac had 5,040,775 warrants outstanding. The earnings per share information for Predecessor Ambac is not meaningful to investors in Successor Ambac’s common stock and warrants.

Basic net income per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted net income per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding plus all potential dilutive common shares outstanding during the period. All potential dilutive common shares outstanding consider common stock deliverable pursuant to warrants issued under the Reorganization Plan. The following table provides a reconciliation of the common shares used for basic earnings per share to the diluted shares used for diluted earnings per share:

	Successor Ambac		Predecessor Ambac
	Three months ended March 31, 2014		Three months ended March 31, 2013
Weighted average number of common shares used for basic earnings per share	45,042,823		302,469,516
Effect of potential dilutive shares:
Warrants	1,998,028		—
Stock options	4,891		—
Restricted stock units	—		109,738
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	$	47,045,742	$	302,579,254
Anti-dilutive shares excluded from the above reconciliation:
Warrants	—		—
Stock options	—		480,350
Restricted stock units	1,599		—