Net Income Per Share

12 Months Ended

Dec. 31, 2016

5. NET INCOME PER SHARE

Pursuant to the Reorganization Plan, 45,000,000 shares of 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 years ended December 31, 2016, 2015 and 2014, 136, 740, and 949, warrants, respectively, were exercised, resulting in an issuance of 136, 236 and 949 shares of common stock.

On June 30, 2015, the Board of Directors of Ambac authorized the establishment of a warrant repurchase program that permits the repurchase of up to $10,000 of warrants. On November 3, 2016, the Board of Directors of Ambac authorized an additional $10,000 to the warrant repurchase program. As of December 31, 2016, Ambac had repurchased 985,331 warrants at a cost of $8,092, leaving 4,053,670 warrants outstanding, bringing the remaining aggregate authorization to $11,939.

Basic net income per share is computed by dividing net income attributable to common shareholders 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 shareholders 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 net income per share to the diluted shares used for diluted net income per share:



Year Ended December 31,	2016	2015	2014
Basic weighted average shares outstanding	45,212,414	45,173,542	45,093,304
Effect of potential dilutive shares:
Warrants	312,619	809,834	1,786,804
Stock options	447	5,313	9,807
Restricted stock units	116,105	14,221	37,812
Performance stock units	81,939	3,117	5,526
Diluted weighted average shares outstanding	45,723,524	46,006,027	46,933,253

Antidilutive securities for both the year ended December 31, 2016 and 2015, included stock options to purchase 110,000 of common stock, where the exercise price was greater than the average market price.