American Airlines 2008 Annual Report Download - page 86

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83
13. Earnings (Loss) Per Share
The following table sets forth the computation of basic and diluted earnings (loss) per share (in millions, except per
share amounts):
Year Ended December 31,
2008
2007
2006
Numerator:
Net earnings (loss) – numerator for basic
earnings (loss) per share
$ (2,071)
$ 504
$ 231
Interest on senior convertible notes
-
27
27
Net earnings (loss) adjusted for interest on
senior convertible notes – numerator for
diluted earnings per share
$ (2,071)
$ 531
$ 258
Denominator:
Denominator for basic earnings (loss) per
share – weighted average shares
259
245
205
Effect of dilutive securities:
Senior convertible notes
-
32
32
Employee options and shares
-
34
44
Assumed treasury shares purchased
-
(12)
(17)
Diluted potential common shares
-
54
59
Denominator for diluted earnings loss per
share – weighted-average shares
259
299
264
Basic earnings (loss) per share
$ (7.98)
$ 2.06
$ 1.13
Diluted earnings (loss) per share
$ (7.98)
$ 1.78
$ 0.98
For the year ended December 31, 2008 and 2007, approximately 13 million and 7 million shares related to
employee stock options were not added to the denominator because the options’ exercise prices were greater than
the average market price of the common shares. Approximately 36 million shares related to the Company’s
convertible notes, employee stock options and deferred stock were not added to the denominator for the year
ended December 31, 2008 because inclusion of such shares would be antidilutive.
14. Segment Reporting
The Company's operations of American and AMR Eagle are treated as an integrated route network and the route
scheduling system maximizes the operating results of the Company. The Company's chief operating decision
maker makes resource allocation decisions to maximize the Company's consolidated financial results. Based on
the way the Company treats the network and the manner in which resource allocation decisions are made, the
Company has only one operating segment for financial reporting purposes consisting of the operations of
American and AMR Eagle.
American, AMR Eagle and the AmericanConnection® airlines serve 250 cities in 40 countries with, on average,
more than 3,400 daily flights. The combined network fleet numbers approximately 900 aircraft. American is also
one of the largest scheduled air freight carriers in the world, providing a wide range of freight and mail services to
shippers throughout its system onboard American’s passenger fleet. AMR Eagle owns two regional airlines, which
do business as "American Eagle” - American Eagle Airlines, Inc. and Executive Airlines, Inc. The American
Eagle® carriers provide connecting service from nine of American's high-traffic cities to smaller markets
throughout the United States, Canada, Mexico and the Caribbean.