Net Income Per Share

6 Months Ended

Jun. 30, 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 and six months ended June 30, 2014, 0 and 51 warrants, respectively, were exercised, resulting in an issuance of 51 shares of common stock. As of June 30, 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 and vested restricted stock units. 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
	Period from April 1 through June 30, 2014	Period from May 1 through June 30, 2013	Period from April 1 through April 30, 2013
Weighted average number of common shares used for basic earnings per share	45,091,983	45,000,653	302,469,626
Effect of potential dilutive shares:
Warrants	—	1,575,064	—
Stock options	—	—	—
Restricted stock units	—	—	109,593
Performance stock units	—	—	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	45,091,983	46,575,717	302,579,219
Anti-dilutive shares excluded from the above reconciliation:
Warrants	5,040,775	—	—
Stock options	66,668	—	461,150
Restricted stock units	74,341	—	—
Performance stock units	—	—	—

	Successor Ambac		Predecessor Ambac
	Period from January 1 through June 30, 2014	Period from May 1 through June 30, 2013	Period from January 1 through April 30, 2013
Weighted average number of common shares used for basic earnings per share	45,067,539	45,000,653	302,469,544
Effect of potential dilutive shares:
Warrants	—	1,575,064	—
Stock options	—	—	—
Restricted stock units	—	—	109,701
Performance stock units	—	—	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	45,067,539	46,575,717	302,579,245
Anti-dilutive shares excluded from the above reconciliation:
Warrants	5,040,784	—	—
Stock options	66,668	—	475,550
Restricted stock units	94,131	—	—
Performance stock units	—	—	—