Net Income Per Share

12 Months Ended

Dec. 31, 2023

15. NET INCOME PER SHARE

As of December 31, 2023, 45,195,370 shares of AFG's common stock (par value $0.01) were issued and outstanding. Common shares outstanding increased by 221,613, during the year ended December 31, 2023, primarily due to settlements of employee restricted and performance stock units, partially offset by share repurchases. For the three years ended December 31, 2023, 2022 and 2021, 1,503, 0 and 132 warrants were exercised, respectively, resulting in an issuance of 29, 0 and 4 shares of common stock, respectively. As of April 30, 2023, all of AFG's outstanding warrants expired without being exercised.

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. On May 5, 2022, the Board of Directors authorized an additional $15 in share repurchase. As of December 31, 2023, AFG repurchased 1,930,384 shares (including 325,068 shares in 2023) for $19 with an average purchase price of $9.70 per share, bringing the total unused authorized amount to $16.

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,	2023		2022		2021
Net income (loss) attributable to common stockholders	$	4	$	522	$	(17)
Adjustment to redemption value (ASC 480)	5		3		(12)
Numerator of basic and diluted EPS	$	8	$	525	$	(28)
Per Share:
Basic	$	0.18	$	11.48	$	(0.61)
Diluted	$	0.18	$	11.31	$	(0.61)

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,	2023	2022	2021
Basic weighted average shares outstanding	45,636,649	45,719,906	46,535,001
Effect of potential dilutive shares (1):
Warrants	—	—	—
Restricted stock units	164,752	144,194	—
Performance stock units (2)	739,305	550,730	—
Diluted weighted average shares outstanding	46,540,706	46,414,830	46,535,001
Anti-dilutive shares excluded from the above reconciliation
Warrants	—	4,877,617	4,877,653
Restricted stock units	135,058	177,119	475,333
Performance stock units (2)	—	—	700,915

(1)For the year ended December 31, 2021, 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.