Earnings Per Share

12 Months Ended

Dec. 31, 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:



(In millions, except per share amounts)	2015		2014		2013
Earnings per share — basic:
Goodyear net income	$	307	$	2,452	$	629
Less: Preferred stock dividends	—		7		29
Goodyear net income available to common shareholders	$	307	$	2,445	$	600
Weighted average shares outstanding	269		268		246
Earnings per common share — basic	$	1.14	$	9.13	$	2.44

Earnings per share — diluted:
Goodyear net income	$	307	$	2,452	$	629
Less: Preferred stock dividends	—		—		—
Goodyear net income available to common shareholders	$	307	$	2,452	$	629
Weighted average shares outstanding	269		268		246
Dilutive effect of mandatory convertible preferred stock	—		7		28
Dilutive effect of stock options and other dilutive securities	4		4		3
Weighted average shares outstanding — diluted	273		279		277
Earnings per common share — diluted	$	1.12	$	8.78	$	2.28

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