On May 1, 2013, 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 of warrants were issued. Warrants entitled 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 nine months ended September 30, 2016 and 2015, 136 and 740 warrants were exercised, respectively, resulting in an issuance of 136 and 236 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. For the nine months ended September 30, 2016, Ambac repurchased 291,082 warrants at a cost of $2,104. As of September 30, 2016, Ambac has repurchased 922,682 warrants totaling $7,478, (average cost of $8.10 per warrant) leaving 4,116,319 warrants outstanding. On November 3, 2016, the Board of Directors of Ambac authorized a $10,000 increase to the warrant repurchase program, bringing the remaining aggregate authorization at September 30, 2016 to $12,550.

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, vested and unvested options, unvested restricted stock units 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 September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
Basic weighted average shares outstanding	45,229,570	45,174,521	45,206,429	45,173,671
Effect of potential dilutive shares:
Warrants	293,311	—	—	1,154,313
Stock options	—	—	—	7,083
Restricted stock units	156,023	—	105,794	14,418
Performance stock units	113,179	—	60,481	2,729
Diluted weighted average shares outstanding	45,792,083	45,174,521	45,372,704	46,352,214

Antidilutive securities for the three and nine months ended September 30, 2016 included stock options to purchase 143,334 shares of common stock, where the exercise price was greater than the average market price and 23,334 restricted stock units.

For the three months ended September 30, 2015, Ambac incurred net losses and accordingly excluded all potentially dilutive securities from the determination of diluted loss per share as their impact was antidilutive. Antidilutive securities for the three months ended September 30, 2015 included stock options and warrants to purchase 176,668 and 4,461,637 shares of common stock, respectively, where the exercise price was greater than the average market price. 78,460 restricted stock units and 96,349 performance stock units at their target amounts. Antidilutive securities for the nine months ended September 30, 2015 included stock options to purchase 110,000 shares of common stock where the exercise price was greater than the average market price.