American Airlines Group Inc.AAL

American Airlines Group Inc. Earnings Per Share Disclosure

10-KFiled Feb 18, 20263 min read
Earnings Per Common Share
The following table provides the computation of basic and diluted earnings per common share (EPS) (in millions, except share and per share amounts):
 Year Ended December 31,
 202520242023
Basic EPS:
Net income$111 $846 $822 
Weighted average common shares outstanding (in thousands)659,964 656,996 653,612 
Basic EPS$0.17 $1.29 $1.26 
Diluted EPS:
Net income$111 $846 $822 
Interest expense on 6.50% convertible senior notes
— 51 46 
Net income for purposes of computing diluted EPS$111 $897 $868 
Share computation for diluted EPS (in thousands):
Basic weighted average common shares outstanding659,964 656,996 653,612 
Dilutive effect of restricted stock unit awards763 1,121 1,830 
Dilutive effect of certain PSP Warrants and Treasury Loan Warrants325 1,455 2,499 
Assumed conversion of 6.50% convertible senior notes
— 61,728 61,728 
Diluted weighted average common shares outstanding661,052 721,300 719,669 
Diluted EPS$0.17 $1.24 $1.21 
The following were excluded from the calculation of diluted EPS because inclusion of such shares would be antidilutive (in thousands):
Year Ended December 31,
202520242023
6.50% convertible senior notes (1)
15,432 — — 
Restricted stock unit awards1,188 2,350 4,371 
(1)On March 27, 2025, we provided notice to the holders of our 6.50% convertible senior notes due 2025 (Convertible Notes) that we would settle our Convertible Notes at their maturity in cash on July 1, 2025. As a result, we have excluded the Convertible Notes from the calculation of diluted EPS for the quarterly periods ending after March 31, 2025.
In addition, excluded from the calculation of diluted EPS because inclusion of such shares would be antidilutive, are certain shares underlying the warrants issued pursuant to (i) the payroll support program established under the Coronavirus Aid, Relief, and Economic Security Act (PSP1), (ii) the payroll support program established under the Subtitle A of Title IV of Division N of the Consolidated Appropriations Act, 2021 (PSP2), (iii) the payroll support program established under the American Rescue Plan Act of 2021 (PSP3, and together with PSP1 and PSP2, the PSP Warrants) and (iv) the Loan and Guarantee Agreement with the U.S. Department of Treasury (Treasury Loan Warrants).
During the first quarter of 2025, all of the PSP1 Warrants and Treasury Loan Warrants, 14.0 million shares and 4.4 million shares, respectively, were exercised at an exercise price of $12.51 per share and net settled in cash for $79 million, reflected within other financing activities in the consolidated statement of cash flows.
The table below provides a summary of the warrants outstanding as of December 31, 2025:
Warrants
Warrants Issued
(shares, in thousands) (1)
Exercise Price ($)Expiration
PSP2 Warrants6,57615.66 
January 2026 (2) to April 2026
PSP3 Warrants4,40721.75 April 2026 to June 2026
(1)The PSP2 Warrants and PSP3 Warrants are subject to certain anti-dilution provisions, do not have any voting rights and are freely transferable, with registration rights. Each warrant will be exercisable either through net share settlement or cash, at our option. The warrants were issued solely as compensation to the U.S. Government related to entry into the payroll support program agreements. No separate proceeds (apart from the financial assistance previously received in 2021) were received upon issuance of the warrants or will be received upon exercise thereof.
(2)In January 2026, 2.8 million shares of the PSP2 Warrants were exercised at an exercise price of $15.66 per share and net settled in cash for a nominal amount.

Historical Timeline

Fiscal YearFiled
2025Feb 18, 2026Showing above
2024Feb 19, 2025
2017Feb 21, 2018

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

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