Earnings 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 third quarter and nine month period weighted average shares and earnings per share (EPS) 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 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 September 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 EPS (in millions, except share and per share amounts in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Basic EPS:
Net income	$	942	$	289	$	2,285	$	167
Weighted-average common shares outstanding (in thousands)	719,067		249,719		721,213		249,599
Basic EPS	$	1.31	$	1.16	$	3.17	$	0.67

Diluted EPS:
Net income	$	942	$	289	$	2,285	$	167
Interest expense on convertible senior notes	—		7		—		22
Change in fair value of conversion feature on 7.25% convertible senior notes ^(a)	—		—		3		—
Net income for purposes of computing diluted EPS	$	942	$	296	$	2,288	$	189
Share computation for diluted EPS (in thousands):
Weighted-average shares outstanding	719,067		249,719		721,213		249,599
Dilutive effect of stock awards	16,129		4,736		14,610		4,159
Assumed conversion of convertible senior notes	—		34,581		1,277		34,581
Weighted average common shares outstanding - as adjusted	735,196		289,036		737,100		288,339
Diluted EPS	$	1.28	$	1.02	$	3.10	$	0.65

The following were excluded from the computation of diluted EPS (in thousands):
Stock options, SARs and RSUs because inclusion would be antidilutive	248		6,519		288		9,715

^(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 GAAP net income for purposes of computing diluted earnings per share by $3 million for the nine months ended September 30, 2014.