Earnings Per Share

9 Months Ended

Sep. 30, 2014

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)	2014		2013		2014		2013
Earnings per share — basic:
Goodyear net income	$	161	$	173	$	323	$	394
Less: Preferred stock dividends	—		7		7		22
Goodyear net income available to common shareholders	$	161	$	166	$	316	$	372
Weighted average shares outstanding	275		246		266		246
Earnings per common share — basic	$	0.58	$	0.67	$	1.18	$	1.51
Earnings per share — diluted:
Goodyear net income	$	161	$	173	$	323	$	394
Less: Preferred stock dividends	—		—		—		—
Goodyear net income available to common shareholders	$	161	$	173	$	323	$	394
Weighted average shares outstanding	275		246		266		246
Dilutive effect of mandatory convertible preferred stock	—		27		9		27
Dilutive effect of stock options and other dilutive securities	4		5		5		3
Weighted average shares outstanding — diluted	279		278		280		276
Earnings per common share — diluted	$	0.58	$	0.62	$	1.15	$	1.43

Weighted average shares outstanding - diluted for the three and nine months ended September 30, 2014 excludes approximately 3 million and 2 million equivalent shares, respectively, and for the three and nine months ended September 30, 2013 excludes approximately 4 million and 5 million equivalent shares, respectively, related to options with exercise prices greater than the average market price of our common shares (i.e., “underwater” options).

On April 1, 2014, all outstanding shares of mandatory convertible preferred stock automatically converted into 27,573,735 shares of common stock, net of fractional shares, at a conversion rate of 2.7574 shares of common stock per share of preferred stock.