Earnings Per Share

12 Months Ended

Dec. 31, 2013

Per Share of Common Stock [Abstract]

Per Share of Common Stock

 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:

(In millions, except per share amounts)	2013		2012		2011
Earnings per share — basic:
Goodyear net income	$	629	$	212	$	343
Less: Preferred stock dividends	29		29		22
Goodyear net income available to common shareholders	$	600	$	183	$	321
Weighted average shares outstanding	246		245		244
Earnings per common share — basic	$	2.44	$	0.75	$	1.32
Earnings per share — diluted:
Goodyear net income	$	629	$	212	$	343
Less: Preferred stock dividends	—		29		—
Goodyear net income available to common shareholders	$	629	$	183	$	343
Weighted average shares outstanding	246		245		244
Dilutive effect of mandatory convertible preferred stock	28		—		25
Dilutive effect of stock options and other dilutive securities	3		2		2
Weighted average shares outstanding — diluted	277		247		271
Earnings per common share — diluted	$	2.28	$	0.74	$	1.26

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 2013, 2012 and 2011 excludes approximately 3 million, 11 million and 6 million equivalent shares, respectively, related to options with exercise prices greater than the average market price of our common stock (i.e., “underwater” options).