Earnings Per Share

12 Months Ended

Dec. 31, 2021

Note 8. 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)	2021		2020			2019
Earnings (loss) per share — basic:
Goodyear net income (loss)	$	764	$	(1,254	)	$	(311	)
Weighted average shares outstanding		261		234			233
Earnings (loss) per common share — basic	$	2.92	$	(5.35	)	$	(1.33	)

Earnings (loss) per share — diluted:
Goodyear net income (loss)	$	764	$	(1,254	)	$	(311	)
Weighted average shares outstanding		261		234			233
Dilutive effect of stock options and other dilutive securities		3		—			—
Weighted average shares outstanding — diluted		264		234			233
Earnings (loss) per common share — diluted	$	2.89	$	(5.35	)	$	(1.33	)

Weighted average shares outstanding — diluted for 2021 excludes 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). There were approximately 9 million and 2 million equivalent shares related to underwater options for 2020 and 2019, respectively. Additionally, weighted average shares outstanding — diluted for 2019 excludes the dilutive effect of approximately 3 million equivalent 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 due to the Goodyear net loss. There were no in-the-money options for 2020.