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 first quarter 2013 weighted average shares and loss per share calculation have been adjusted to retrospectively reflect these distributions which were 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) calculation 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 March 31, 2014, approximately 147 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 former holders of AAMRQ shares. However, the Company remitted cash for employee withholding taxes in lieu of distributing approximately 4 million shares for the final mandatory distribution to employees on April 8, 2014. 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 outstanding for purposes of the Company's basic and diluted EPS calculation.

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 March 31,
	2014		2013
Basic EPS:
Net income (loss)	$	480	$	(341	)
Weighted-average common shares outstanding (in thousands)	723,971		249,491
Basic EPS	$	0.66	$	(1.37	)

Diluted EPS:
Net income (loss)	$	480	$	(341	)
Change in fair value of conversion feature on 7.25% convertible senior notes ^(a)	5		—
Net income (loss) for purposes of computing diluted EPS	$	485	$	(341	)
Share computation for diluted EPS (in thousands):
Weighted-average shares outstanding	723,971		249,491
Dilutive effect of stock awards	13,534		—
Assumed conversion of 7.25% convertible senior notes ^(a)	3,830		—
Weighted average common shares outstanding - as adjusted	741,335		249,491
Diluted EPS	$	0.65	$	(1.37	)

The following were excluded from the computation of diluted EPS (in thousands):
Stock options, SARs and RSUs because inclusion would be antidilutive	33		20,010
Convertible notes because inclusion would be antidilutive	—		34,581

(a)

In March 2014, the Company notified the holders of US Airways Group's 7.25% convertible senior notes that it has 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 March 31, 2014, which increased GAAP net income for purposes of computing diluted earnings per share by $5 million.