Earnings (Loss) Per Share

Pursuant to the Plan and the Merger Agreement, holders of AMR common stock formerly traded under the symbol “AAMRQ” received shares of AAG Common Stock principally over the 120-day distribution period following the Effective Date. In accordance with GAAP, the 2013 second quarter and six month period weighted average shares and earnings (loss) per share calculations have been adjusted to retrospectively reflect these distributions which were each made at the rate of approximately 0.7441 shares of AAG Common Stock per share of AAMRQ. Former holders of AAMRQ shares as of the Effective Date may in the future receive additional distributions of AAG Common Stock dependent upon the ultimate distribution of shares of AAG Common Stock to holders of disputed claims. Thus, the shares and related earnings per share (EPS) calculations prior to the Effective Date may change in the future to reflect additional retrospective adjustments for future AAG Common Stock distributions to former holders of AAMRQ shares.

As of June 30, 2014, all shares pursuant to the Plan have been issued and are outstanding for purposes of the Company's basic and diluted EPS calculation in connection with the conversion of AAG Series A Preferred Stock and satisfaction of other bankruptcy settlement obligations related to allowed unsecured claims, including disputed claims, labor-related deemed claims and former holders of AAMRQ shares.

The following table sets forth the computation of basic and diluted earnings (loss) per share (in millions, except share and per share amounts in thousands):



	Three Months Ended June 30,					Six Months Ended June 30,
	2014			2013		2014		2013
Basic EPS:
Net income (loss)	$	864		$	220	$	1,343	$	(122	)
Weighted-average common shares outstanding (in thousands)	720,600			249,588		722,286		249,540
Basic EPS	$	1.20		$	0.88	$	1.86	$	(0.49	)

Diluted EPS:
Net income (loss)	$	864		$	220	$	1,343	$	(122	)
Interest expense on convertible senior notes	—			7		—		—
Change in fair value of conversion feature on 7.25% convertible senior notes ^(a)	(2		)	—		3		—
Net income (loss) for purposes of computing diluted EPS	$	862		$	227	$	1,346	$	(122	)
Share computation for diluted EPS (in thousands):
Weighted-average shares outstanding	720,600			249,588		722,286		249,540
Dilutive effect of stock awards	14,167			4,342		13,850		—
Assumed conversion of convertible senior notes	—			34,581		1,915		—
Weighted average common shares outstanding - as adjusted	734,767			288,511		738,051		249,540
Diluted EPS	$	1.17		$	0.79	$	1.82	$	(0.49	)

The following were excluded from the computation of diluted EPS (in thousands):
Stock options, SARs and RSUs because inclusion would be antidilutive	582			—		307		38
Convertible notes because inclusion would be antidilutive	—			6		—		11

(a)

In March 2014, the Company notified the holders of US Airways Group's 7.25% convertible senior notes that it had elected to settle all future conversions solely in cash instead of shares of AAG Common Stock in accordance with the related indenture. Thus, the diluted shares include the weighted average impact of the 7.25% convertible senior notes only for the period from January 1, 2014 to March 12, 2014. In addition, under GAAP, the Company must adjust the numerator for purposes of calculating diluted earnings per share by the change in fair value of the conversion feature from March 12, 2014 to May 15, 2014, which increased (decreased) GAAP net income for purposes of computing diluted earnings per share by $(2) million and $3 million, respectively, for the three and six months ended June 30, 2014.