Earnings Per Share

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share are computed based on the weighted average number of common shares outstanding. Diluted earnings (loss) 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 (loss) per common share are calculated as follows:

	Three Months Ended
	March 31,
(In millions, except per share amounts)	2015		2014
Earnings (loss) per share — basic:
Goodyear net income (loss)	$	224	$	(51	)
Less: Preferred stock dividends	—		7
Goodyear net income (loss) available to common shareholders	$	224	$	(58	)
Weighted average shares outstanding	270		248
Earnings (loss) per common share — basic	$	0.83	$	(0.23	)
Earnings (loss) per share — diluted:
Goodyear net income (loss)	$	224	$	(51	)
Less: Preferred stock dividends	—		7
Goodyear net income (loss) available to common shareholders	$	224	$	(58	)
Weighted average shares outstanding	270		248
Dilutive effect of stock options and other dilutive securities	4		—
Weighted average shares outstanding — diluted	274		248
Earnings (loss) per common share — diluted	$	0.82	$	(0.23	)

Weighted average shares outstanding - diluted for the three months ended March 31, 2015 and 2014 both exclude approximately 2 million equivalent shares related to options with exercise prices greater than the average market price of our common shares (i.e., “underwater” options).

Additionally, weighted average shares outstanding - diluted for the three months ended March 31, 2014 excludes the effect of approximately 28 million equivalent shares related to the mandatory convertible preferred stock and the effect of approximately 10 million equivalent shares, with a dilutive effect of approximately 5 million shares, related primarily to options with exercise prices less than the average market price of our common shares (i.e., "in-the-money" options), as their inclusion would have been anti-dilutive. In addition, Goodyear net loss used to compute earnings per common share - diluted for the three months ended March 31, 2014 is reduced by $7 million of preferred stock dividends since the inclusion of the related shares of preferred stock would have been anti-dilutive.

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.