Net Income Per Share

12 Months Ended

Dec. 31, 2019

5. NET INCOME PER SHARE

As of December 31, 2019, 45,555,400 shares of AFG'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 outstanding. For the three years ended December 31, 2019, 2018 and 2017, 0, 194 and 0 warrants were exercised, respectively, resulting in an issuance of 0, 194 and 0 shares of common stock, respectively.

On June 30, 2015, the Board of Directors of AFG authorized the establishment of a warrant repurchase program that permits the repurchase of up to $10 of warrants. On November 3, 2016, the Board of Directors of AFG authorized a $10 increase to the warrant repurchase program. For the years ended December 31, 2019 and 2018, AFG did not repurchase any warrants. As of December 31, 2019, AFG had repurchased 985,331 warrants at a total cost of $8 (average cost of $8.21 per warrant). The remaining aggregate authorization at December 31, 2019 was $12. In connection with the AMPS Exchange, AFG issued 824,307 of the repurchased warrants at a price of $9.72 per warrant on August 3, 2018. Refer to Note 1. Background and Business Description for further discussion of the AMPS Exchange.

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,	2019	2018	2017
Basic weighted average shares outstanding	45,954,908	45,665,883	45,367,932
Effect of potential dilutive shares⁽¹⁾:
Warrants	—	441,104	—
Stock options	—	—	—
Restricted stock units	—	77,572	—
Performance stock units ⁽²⁾	—	375,276	—
Diluted weighted average shares outstanding	45,954,908	46,559,835	45,367,932
Anti-dilutive shares excluded from the above reconciliation
Stock options	16,667	16,667	126,667
Warrants	4,877,783	—	4,053,670
Restricted stock units	249,263	—	68,654
Performance stock units ⁽²⁾	872,258	—	322,943


(1)	For the years ended December 31, 2019 and 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 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.