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)	2018		2017		2016
Earnings per share — basic:
Goodyear net income	$	693	$	346	$	1,264
Weighted average shares outstanding	237		249		263
Earnings per common share — basic	$	2.92	$	1.39	$	4.81

Earnings per share — diluted:
Goodyear net income	$	693	$	346	$	1,264
Weighted average shares outstanding	237		249		263
Dilutive effect of stock options and other dilutive securities	2		4		3
Weighted average shares outstanding — diluted	239		253		266
Earnings per common share — diluted	$	2.89	$	1.37	$	4.74

Weighted average shares outstanding — diluted for 2018 excludes approximately 2 million equivalent shares related to options with exercise prices greater than the average market price of our common stock (i.e., “underwater” options). There were approximately 1 million equivalent shares related to options with exercise prices greater than the average market price of our common stock for 2017 and 2016.