Earnings Per Share

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Basic earnings per share are computed based on the weighted average number of common shares outstanding. Diluted earnings per share are calculated to reflect the potential dilution that could occur if securities or other contracts were exercised or converted into common stock.

Basic and diluted earnings per common share are calculated as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions, except per share amounts)	2012		2011		2012		2011
Earnings per share — basic:
Goodyear net income	$	117	$	168	$	205	$	318
Less: Preferred stock dividends	7		7		22		15
Goodyear net income available to common shareholders	$	110	$	161	$	183	$	303
Weighted average shares outstanding	245		244		245		244
Earnings per common share — basic	$	0.45	$	0.66	$	0.75	$	1.25
Earnings per share — diluted:
Goodyear net income	$	117	$	168	$	205	$	318
Less: Preferred stock dividends	—		—		—		—
Goodyear net income available to common shareholders	$	117	$	168	$	205	$	318
Weighted average shares outstanding	245		244		245		244
Dilutive effect of mandatory convertible preferred stock	34		34		34		21
Dilutive effect of stock options and other dilutive securities	2		3		2		3
Weighted average shares outstanding — diluted	281		281		281		268
Earnings per common share — diluted	$	0.41	$	0.60	$	0.73	$	1.19

Weighted average shares outstanding - diluted for the three and nine months ended September 30, 2012 excludes approximately 11 million equivalent shares related to options with exercise prices greater than the average market price of our common shares (i.e., “underwater” options).

Weighted average shares outstanding - diluted for the three and nine months ended September 30, 2011 excludes approximately 9 million and 7 million equivalent shares, respectively, related to options with exercise prices greater than the average market price of our common shares (i.e., “underwater” options).