5. NET INCOME PER SHARE

On May 1, 2013, pursuant to the Second Modified Fifth Amended Plan of Reorganization of Ambac (the "Reorganization Plan"), 45,000,000 shares of new common stock at par value of $0.01 per share and 5,047,138 of warrants were issued. Warrants entitled 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, 2018 and 2017, 194 and 0 warrants were exercised, respectively, resulting in an issuance of 194 and 0 shares of common stock, respectively.

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 a $10,000 increase to the warrant repurchase program. For the three months ended March 31, 2018, Ambac repurchased 0 warrants at a cost of $0. As of March 31, 2018, Ambac has repurchased 985,331 warrants totaling $8,092, (average cost of $8.21 per warrant) leaving 4,053,476 warrants outstanding. The remaining aggregate authorization at March 31, 2018 is $11,939.

Basic net income per share is computed by dividing net income attributable 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 used for basic earnings per share 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, vested and unvested options, unvested 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:



	Three Months Ended March 31,
	2018	2017
Basic weighted average shares outstanding	45,471,083	45,292,253
Effect of potential dilutive shares ⁽¹⁾:
Warrants	—	—
Restricted stock units	45,713	—
Performance stock units	136,675	—
Diluted weighted average shares outstanding	45,653,471	45,292,253
Anti-dilutive shares excluded from the above reconciliation:
Stock options	126,667	126,667
Warrants	4,053,476	4,053,670
Restricted stock units	—	94,204
Performance stock units ⁽²⁾	—	342,456


(1)	For the three months ended March 31, 2017, Ambac had a net loss and accordingly excluded all potentially dilutive securities from the determination of diluted loss per share as their impact was anti-dilutive.


(2)	Performance stock units are reflected herein at their target issuance amounts. Vesting of these units is contingent upon meeting certain performance metrics. Although a portion of these performance metrics have been achieved as of the respective period end, it is possible that awards may no longer meet the metric at the end of the performance period.