Net Income Per Share

12 Months Ended

Dec. 31, 2022

16. NET INCOME PER SHARE

As of December 31, 2022, 44,973,757 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 1,330,382, during the year ended December 31, 2022, primarily due to share repurchases partially offset by settlements of employee restricted and performance stock units. For the three years ended December 31, 2022, 2021 and 2020, —, 132 and 34 warrants were exercised, respectively, resulting in an issuance of —, 4 and 8 shares of common stock, respectively.

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 December 31, 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.

Warrant Repurchases

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. The remaining aggregate authorization at December 31, 2022 was $12. For the years ended December 31, 2022 and 2021, AFG did not repurchase any warrants.

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 adjustment to redemption value of redeemable noncontrolling interests under ASC 480. The redemption value adjustment is further described in the Redeemable Noncontrolling Interests section of Note 2. Basis of Presentation and Significant Accounting Policies.

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:


Year ended December 31,	2022		2021		2020
Net income (loss) attributable to common stockholders	$	522	$	(17)	$	(437)
Adjustment to redemption value (ASC 480)	3		(12)		—
Numerator of basic and diluted EPS	$	525	$	(28)	$	(437)
Per Share:
Basic	11.48		$	(0.61)	$	(9.47)
Diluted	11.31		$	(0.61)	$	(9.47)

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 common shares used for basic net income per share to the diluted shares used for diluted net income per share:


Year Ended December 31,	2022	2021	2020
Basic weighted average shares outstanding	45,719,906	46,535,001	46,147,062
Effect of potential dilutive shares (1):
Warrants	—	—	—
Stock options	—	—	—
Restricted stock units	144,194	—	—
Performance stock units (2)	550,730	—	—
Diluted weighted average shares outstanding	46,414,830	46,535,001	46,147,062
Anti-dilutive shares excluded from the above reconciliation
Warrants	4,877,617	4,877,653	4,877,754
Stock options	—	—	16,121
Restricted stock units	177,119	475,333	302,145
Performance stock units (2)	—	700,915	1,002,501

(1)For the years ended years ended December 31, 2021 and 2020, 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.