Earnings (Loss) Per Share

Pursuant to the Plan, all shares of our common stock outstanding prior to the Effective Date were canceled and the issuance of 756 million new shares of American Airlines Group Inc. common stock was authorized to satisfy allowed unsecured claims, labor-related deemed claims, and former AMR Corporation shareholder interests; to consummate the Merger; and to issue shares pursuant to the AAG Incentive Plans. As of the Effective Date, a combination of AAG Series A Preferred Stock and other bankruptcy settlement obligations were issued or placed into effect to satisfy allowed unsecured claims, labor-related deemed claims, and former AMR Corporation shareholder interests. As of December 31, 2013, approximately 261 million shares were issued by the Company primarily to consummate the Merger, distribute a specified number of initial shares to holders of labor-related deemed claims and former AMR Corporation shareholder interests, and to issue shares pursuant to the AAG Incentive Plans. Additionally, as of the Effective Date, the Company paid approximately $300 million in cash for employee withholding taxes in lieu of issuing shares which reduced the total number of shares to be issued pursuant to the Plan by approximately 13 million.

As of December 31, 2013, approximately 463 million shares remain to be distributed pursuant to the Plan upon the conversion of AAG Series A Preferred Stock and to satisfy other bankruptcy settlement obligations related to allowed unsecured claims, including disputed claims, labor-related deemed claims and legacy AMR common stock shareholders. After the issuances of AAG Common Stock upon conversion of AAG Series A Preferred Stock and after the issuance of AAG Common Stock to satisfy the claim-related other bankruptcy settlement obligations, to the extent that any shares of AAG Common Stock remain undistributed, such shares will not be returned to us but rather will be distributed pro-rata to former AMR Corporation shareholders as of the Effective Date. Therefore approximately 743 million shares will have been distributed, however, the Company may on future distributions to employees remit cash for employee withholding taxes in lieu of distributing shares. Accordingly, as of the Effective Date, although undistributed shares are not yet issued and outstanding, all conditions of distribution except the passage of time have been met and such shares are considered issued and are included in our calculation of weighted average shares outstanding for both basic and diluted earnings per share.

The cancellation of all shares of our common stock outstanding prior to the Effective Date and subsequent issuance of, pursuant to the Plan, AAG Common Stock to former AMR Corporation shareholder interests, represents a share exchange with the Company's owners that is accounted for as a reverse stock split applicable to all financial statement periods prior to the Effective Date. Accordingly, weighted average shares outstanding for all periods presented prior to the Effective Date include only the weighted average of common shares previously outstanding (traded as AAMRQ) which have been retroactively adjusted to reflect the reverse stock split. The retroactive adjustment for periods prior to the Effective Date has been made at a rate of 0.3735 shares of AAG Common Stock for each previously held share of AAMRQ, based upon all distributions to former AMR Corporation shareholder interests that have been made on or since the Effective Date, including those made on December 9, 2013, January 9, 2014, and February 10th, 2014. The shares outstanding for the 23 day post-merger period (December 9, 2013 through December 31, 2013) include the full amount of shares to be issued pursuant to the Plan over the 120 day distribution period adjusted for the approximately 13 million shares withheld by the Company in satisfaction of employee tax obligations.

Former AAMRQ holders as of the effective date have and may in the future receive additional distributions based on the trading price of AAL common stock during the remaining 120 day period after the effective date and the total amount of allowed claims, in accordance with the terms of the Plan. Further stock splits will occur as additional shares of AAG Common Stock are distributed to former AMR Corporation shareholders. Accordingly, the Company's common shares outstanding and related basic and diluted earnings per share reported herein for all periods presented may change in the future.

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



	Year Ended December 31,
	2013			2012			2011
Basic EPS:
Net income (loss)	$	(1,834	)	$	(1,876	)	$	(1,979	)
Weighted-average shares outstanding	163,046			125,231			124,985
Basic EPS	$	(11.25	)	$	(14.98	)	$	(15.83	)

Diluted EPS:
Net income (loss)	$	(1,834	)	$	(1,876	)	$	(1,979	)
Interest on senior convertible notes ¹	—			—			—
Net income (loss) for purposes of computing diluted EPS	$	(1,834	)	$	(1,876	)	$	(1,979	)
Share computation for diluted EPS:
Weighted-average shares outstanding	163,046			125,231			124,985
Dilutive effect of stock awards	—			—			—
Senior convertible notes	—			—			—
Employee options and shares	—			—			—
Weighted average common shares outstanding - as adjusted	163,046			125,231			124,985
Diluted EPS	$	(11.25	)	$	(14.98	)	$	(15.83	)

The following were excluded from the calculation of diluted EPS:
Convertible notes, employee stock options and deferred stock because inclusion would be anti-dilutive	$	19		$	17		$	19
'Employee stock options because the options' exercise prices were greater than the average market price of shares	4			9			7


(1)	The year ended December 31, 2013 does not include the impact of post-petition interest recorded in first quarter of 2013. If such amounts were included, results would have been anti-dilutive and conversion would not have been assumed.