Earnings Per Share

12 Months Ended

Dec. 31, 2022

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)	2022		2021		2020
Earnings (loss) per share — basic:
Goodyear net income (loss)	$	202	$	764	$	(1,254	)
Weighted average shares outstanding		284		261		234
Earnings (loss) per common share — basic	$	0.71	$	2.92	$	(5.35	)

Earnings (loss) per share — diluted:
Goodyear net income (loss)	$	202	$	764	$	(1,254	)
Weighted average shares outstanding		284		261		234
Dilutive effect of stock options and other dilutive securities		2		3		—
Weighted average shares outstanding — diluted		286		264		234
Earnings (loss) per common share — diluted	$	0.71	$	2.89	$	(5.35	)

Weighted average shares outstanding — diluted for 2022 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 2 million and 9 million equivalent shares related to underwater options for 2021 and 2020, respectively. There were no options with exercise prices greater than the average market price of our common shares (i.e., "in-the-money" options) for 2020, which would have been excluded from the determination of diluted earnings per share due to the Goodyear net loss.