Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2012

Per Share of Common Stock [Abstract]

Per Share of Common Stock

 Earnings (Loss) 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:

(In millions, except per share amounts)	2012		2011		2010
Earnings (loss) per share — basic:
Goodyear net income (loss)	$	212	$	343	$	(216	)
Less: Preferred stock dividends	29		22		—
Goodyear net income (loss) available to common shareholders	$	183	$	321	$	(216	)
Weighted average shares outstanding	245		244		242
Earnings (loss) per common share — basic	$	0.75	$	1.32	$	(0.89	)
Earnings (loss) per share — diluted:
Goodyear net income (loss)	$	212	$	343	$	(216	)
Less: Preferred stock dividends	29		—		—
Goodyear net income (loss) available to common shareholders	$	183	$	343	$	(216	)
Weighted average shares outstanding	245		244		242
Dilutive effect of mandatory convertible preferred stock	—		25		—
Dilutive effect of stock options and other dilutive securities	2		2		—
Weighted average shares outstanding — diluted	247		271		242
Earnings (loss) per common share — diluted	$	0.74	$	1.26	$	(0.89	)

Weighted average shares outstanding — diluted for the year ended December 31, 2012 excludes the effect of approximately 34 million equivalent shares related to the mandatory convertible preferred stock as their inclusion would have been anti-dilutive. In addition, Goodyear net income used to compute earnings per share — diluted for the year ended December 31, 2012 is reduced by $29 million of preferred stock dividends since the inclusion of the related shares of preferred stock would have been anti-dilutive.

Additionally, weighted average shares outstanding — diluted for 2012, 2011 and 2010 excludes approximately 11 million, 6 million and 10 million equivalent shares, respectively, related to options with exercise prices greater than the average market price of our common stock (i.e., “underwater” options). Weighted average shares outstanding — diluted for 2010 excludes approximately 4 million equivalent shares related to options with exercise prices less than the average market price of our common stock (i.e., “in-the-money” options), as their inclusion would have been anti-dilutive due to the Goodyear net loss in that year.