Net Income Per Share

6 Months Ended

Jun. 30, 2019

5. NET INCOME PER SHARE

As of June 30, 2019, 45,549,185 shares of Ambac's common stock (par value $0.01) and warrants entitling holders to acquire up to 4,877,783 shares of new common stock at an exercise price of $16.67 per share were issued and outstanding. Common shares increased during the six months ended June 30, 2019 due to settlements of employee restricted stock units.

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, 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 June 30,		Six Months Ended June 30,
	2019	2018	2019	2018
Basic weighted average shares outstanding	45,986,043	45,683,058	45,909,595	45,577,656
Effect of potential dilutive shares ⁽¹⁾:
Stock options	—	—	—	—
Warrants	—	392,772	—	196,386
Restricted stock units	—	70,498	—	54,720
Performance stock units ⁽²⁾	—	326,047	—	268,885
Diluted weighted average shares outstanding	45,986,043	46,472,375	45,909,595	46,097,647
Anti-dilutive shares excluded from the above reconciliation:
Stock options	16,667	126,667	16,667	126,667
Warrants	4,877,783	—	4,877,783	—
Restricted stock units	263,151	—	244,202	5,362
Performance stock units ⁽²⁾	699,038	—	651,310	—


(1)	For the three and six months ended June 30, 2019, 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 based on the performance metrics through the balance sheet date. 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.