Earnings Per Share

12 Months Ended

Dec. 31, 2014

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)	2014		2013		2012
Earnings per share — basic:
Goodyear net income	$	2,452	$	629	$	212
Less: Preferred stock dividends	7		29		29
Goodyear net income available to common shareholders	$	2,445	$	600	$	183
Weighted average shares outstanding	268		246		245
Earnings per common share — basic	$	9.13	$	2.44	$	0.75
Earnings per share — diluted:
Goodyear net income	$	2,452	$	629	$	212
Less: Preferred stock dividends	—		—		29
Goodyear net income available to common shareholders	$	2,452	$	629	$	183
Weighted average shares outstanding	268		246		245
Dilutive effect of mandatory convertible preferred stock	7		28		—
Dilutive effect of stock options and other dilutive securities	4		3		2
Weighted average shares outstanding — diluted	279		277		247
Earnings per common share — diluted	$	8.78	$	2.28	$	0.74

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.

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.

Weighted average shares outstanding — diluted for 2014, 2013 and 2012 excludes approximately 2 million, 3 million and 11 million equivalent shares, respectively, related to options with exercise prices greater than the average market price of our common stock (i.e., “underwater” options).