Earnings Per Share

12 Months Ended

Dec. 31, 2020

Note 7. 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)	2020			2019			2018
Earnings (loss) per share — basic:
Goodyear net income (loss)	$	(1,254	)	$	(311	)	$	693
Weighted average shares outstanding		234			233			237
Earnings (loss) per common share — basic	$	(5.35	)	$	(1.33	)	$	2.92

Earnings (loss) per share — diluted:
Goodyear net income (loss)	$	(1,254	)	$	(311	)	$	693
Weighted average shares outstanding		234			233			237
Dilutive effect of stock options and other dilutive securities		—			—			2
Weighted average shares outstanding — diluted		234			233			239
Earnings (loss) per common share — diluted	$	(5.35	)	$	(1.33	)	$	2.89

Weighted average shares outstanding — diluted for 2020 excludes approximately 9 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 equivalent shares related to underwater options for both 2019 and 2018. 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.