Net Income Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Net Income Per Share

12.    NET INCOME PER SHARE

As of September 30, 2022, 44,964,019 shares of AFG's common stock (par value $0.01) and warrants entitling holders to acquire up to 4,877,617 shares of new common stock at an exercise price of $16.67 per share were issued and outstanding. Common shares outstanding decreased by 1,340,120 during the nine months ended September 30, 2022, primarily due to share repurchases partially offset by settlements of employee restricted and performance stock units.

Share Repurchases

On March 29, 2022, AFG's Board of Directors approved a share repurchase program authorizing up to $20 in share repurchases, with an expiration date of March 31, 2024, which may be terminated at any time. As of September 30, 2022, AFG repurchased 1,605,316 shares for $14.2 with an average purchase price of $8.86 per share. On May 5, 2022, the Board of Directors authorized an additional $15 in share repurchase bringing the total unused authorized amount to $20.8.

Earnings Per Share Calculation

The numerator of the basic and diluted earnings per share computation represents net income (loss) attributable to common stockholders adjusted by the retained earnings impact of the noncontrolling adjustment to redemption value under ASC 480. The redemption value adjustment is further described in the Redeemable Noncontrolling Interest section of Note 2. Basis of Presentation and Significant Accounting Policies in the Notes to Consolidated Financial Statements included in the Company’s

Annual Report on Form 10-K for the year ended December 31, 2021.

The following table provides a reconciliation of net income attributable to common stockholders to the numerator in the basic and diluted earnings per share calculation, together with the resulting earnings per share amounts:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income attributable to common stockholders	$	340	$	17	$	347	5
Adjustment to redemption value (ASC 480)	—		—		—		(14)
Numerator of basic and diluted EPS	$	340	$	17	$	347	(9)
Per Share:
Basic	$	7.50	$	0.35	$	7.56	$	(0.19)
Diluted	$	7.41	$	0.35	$	7.48	$	(0.19)

The denominator of the basic earnings per share computation represents the weighted average common shares outstanding plus vested restricted stock units (together, "Basic Weighted Average Shares Outstanding"). The denominator of diluted earnings per share adjusts the basic weighted average shares outstanding for all potential dilutive common shares outstanding during the period. All potential dilutive common shares outstanding consider common stock deliverable pursuant to warrants,

unvested restricted stock units and performance stock units granted under existing compensation plans.

The following table provides a reconciliation of the weighted average shares denominator used for basic net income per share to the denominator used for diluted net income per share:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Basic weighted average shares outstanding denominator	45,307,019	46,615,552	45,847,306	46,503,196
Effect of potential dilutive shares :
Warrants	—	—	—	—
Restricted stock units	179,293	72,061	105,114	—
Performance stock units (1)	360,093	356,519	403,674	—
Diluted weighted average shares outstanding denominator	45,846,405	47,044,132	46,356,094	46,503,196
Anti-dilutive shares excluded from the above reconciliation:
Warrants	4,877,617	4,877,617	4,877,617	4,877,665
Restricted stock units	157,991	244,694	214,941	466,094
Performance stock units (1)	—	—	—	582,254

(1)    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.