Net Income Per Share (Tables)

9 Months Ended

Sep. 30, 2014

Reconciliation of Common Shares Used for Basic and Diluted Earnings 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 nine months ended September 30, 2014, 898 and 949 warrants, respectively, were exercised, resulting in an issuance of 949 shares of common stock for the nine months ended September 30, 2014. As of September 30, 2014, Successor Ambac had 5,039,877 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 and unvested options, restricted stock units and performance stock units granted under employee and director compensation plans. 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:



	Period from July 1	Period from July 1
	through	through
	September 30, 2014	September 30, 2013
Weighted average number of common shares used for basic earnings per share	45,115,882	45,002,463
Effect of potential dilutive shares:
Warrants	1,469,203	1,352,412
Stock options	8,220	—
Restricted stock units	31,384	—
Performance stock units	—	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	46,624,689	46,354,875
Anti-dilutive shares excluded from the above reconciliation:
Warrants	—	—
Stock options	—	—
Restricted stock units	—	—



	Successor Ambac		Predecessor Ambac
	Period from January 1	Period from May 1	Period from January 1
	through	through	through
	September 30, 2014	September 30, 2013	April 30, 2013
Weighted average number of common shares used for basic earnings per share	45,083,831	45,001,741	302,469,544
Effect of potential dilutive shares:
Warrants	1,892,211	1,443,874	—
Stock options	10,569	—	—
Restricted stock units	40,473	—	109,701
Performance stock units	—	—	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	47,027,084	46,445,615	302,579,245
Anti-dilutive shares excluded from the above reconciliation:
Warrants	—	—	—
Stock options	—	—	475,550
Restricted stock units	—	—	—

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:



	Period from July 1	Period from July 1
	through	through
	September 30, 2014	September 30, 2013
Weighted average number of common shares used for basic earnings per share	45,115,882	45,002,463
Effect of potential dilutive shares:
Warrants	1,469,203	1,352,412
Stock options	8,220	—
Restricted stock units	31,384	—
Performance stock units	—	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	46,624,689	46,354,875
Anti-dilutive shares excluded from the above reconciliation:
Warrants	—	—
Stock options	—	—
Restricted stock units	—	—



	Successor Ambac		Predecessor Ambac
	Period from January 1	Period from May 1	Period from January 1
	through	through	through
	September 30, 2014	September 30, 2013	April 30, 2013
Weighted average number of common shares used for basic earnings per share	45,083,831	45,001,741	302,469,544
Effect of potential dilutive shares:
Warrants	1,892,211	1,443,874	—
Stock options	10,569	—	—
Restricted stock units	40,473	—	109,701
Performance stock units	—	—	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	47,027,084	46,445,615	302,579,245
Anti-dilutive shares excluded from the above reconciliation:
Warrants	—	—	—
Stock options	—	—	475,550
Restricted stock units	—	—	—