Xerox 10-Q 2002 Q2 Quarterly report

EXHIBIT 11

XEROX CORPORATION

COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE

(Dollars in millions, except per-share data; shares in thousands)

	Three Months Ended June 30,					Six Months Ended June 30,
	2002		2001			2002		2001
I.    Basic Earnings (Loss) Per Common Share
Net Income (Loss)	$	93	$	(101	)	$	47	$	126
Accrued dividends on ESOP Preferred Stock		—		—			—		(12	)
Adjusted Net Income (Loss)	$	93	$	(101	)	$	47	$	114
Average common shares outstanding during the period		726,499		699,657			725,320		688,478
Common shares issuable with respect to exchangeable shares		1,498		1,668			1,501		1,718
Adjusted average shares outstanding for the period		727,997		701,325			726,821		690,196
Basic Earnings (Loss) per share	$	0.13	$	(0.14	)	$	0.07	$	0.17
II.    Diluted Earnings (Loss) Per Common Share
Net Income (Loss)	$	93	$	(101	)	$	47	$	126
ESOP expense adjustment, net of tax		—		—			—		(8	)
Interest on convertible debt, net		13		—			—		1
Adjusted Net Income (Loss)	$	106	$	(101	)	$	47	$	119
Average common shares outstanding during the period		726,499		699,657			725,320		688,478
Common shares issuable with respect to:
Stock options, incentive and exchangeable shares		7,250		1,668			7,730		6,051
Convertible debt		113,426		—			—		1,992
ESOP preferred stock		65,935		—			61,949		82,776
Adjusted average shares outstanding for the period		913,110		701,325			794,999		779,297
Diluted Earnings (Loss) per share	$	0.12	$	(0.14	)	$	0.06	$	0.15