Earnings Per Share

6 Months Ended

Jun. 30, 2015

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				Six Months Ended
	June 30,				June 30,
(In millions, except per share amounts)	2015		2014		2015		2014
Earnings per share — basic:
Goodyear net income	$	192	$	213	$	416	$	162
Less: Preferred stock dividends	—		—		—		7
Goodyear net income available to common shareholders	$	192	$	213	$	416	$	155
Weighted average shares outstanding	270		276		270		262
Earnings per common share — basic	$	0.71	$	0.77	$	1.54	$	0.59

Earnings per share — diluted:
Goodyear net income	$	192	$	213	$	416	$	162
Less: Preferred stock dividends	—		—		—		—
Goodyear net income available to common shareholders	$	192	$	213	$	416	$	162
Weighted average shares outstanding	270		276		270		262
Dilutive effect of mandatory convertible preferred stock	—		—		—		14
Dilutive effect of stock options and other dilutive securities	4		5		4		5
Weighted average shares outstanding — diluted	274		281		274		281
Earnings per common share — diluted	$	0.70	$	0.76	$	1.52	$	0.58

Weighted average shares outstanding - diluted for the three and six months ended June 30, 2014 excludes approximately 1 million and 2 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.