Net Income Per Share

3 Months Ended

Mar. 31, 2016

5. NET INCOME PER SHARE

Pursuant to the Second Modified Fifth Amended Plan of Reorganization of Ambac (the "Reorganization Plan"), 45,000,000 shares of new common stock at par value of $0.01 per share and 5,047,138 warrants were issued. Warrants entitle such holders to acquire up to 5,047,138 shares of new common stock at an exercise price of $16.67 per share at any time on or prior to April 30, 2023. For the three months ended March 31, 2016 and 2015, 0 and 125 warrants were exercised, respectively, resulting in an issuance of 0 and 125 shares of common stock, respectively.

On June 30, 2015, the Board of Directors of Ambac authorized the establishment of a warrant repurchase program that permits the repurchase of up to $10,000 of warrants. As of March 31, 2016, Ambac had repurchased 631,600 warrants totaling $5,375, leaving 4,407,537 warrants outstanding with an exercise price of $16.67 per share and expiration of April 30, 2023. There were no repurchases in 2016.

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 issued under the Reorganization Plan and vested and unvested options, unvested restricted stock 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 March 31,
	2016	2015
Basic weighted average shares outstanding	45,176,978	45,156,202
Effect of potential dilutive shares:
Warrants	—	1,751,798
Stock options	—	12,841
Restricted stock units	56,902	25,013
Performance stock units	10,117	3,145
Diluted weighted average shares outstanding	45,243,997	46,948,999

Antidilutive securities for the three months ended March 31, 2016 included stock options and warrants to purchase 176,668 and 4,407,537 shares of common stock, respectively, where the exercise price was greater than the average market price, 51,992 restricted stock units and 263,988 performance stock units at their target amounts. Antidilutive securities for the three months ended March 31, 2015 included stock options to purchase 110,000 shares of common stock where the exercise price was greater than the average market price.