Exhibit 11
Xerox Corporation
Computation of Net Income Per Common Share
(Dollars in millions, except per-share data; shares in thousands)
Three months Nine Months
ended September 30, ended September 30,
1998 1997 1998 1997
I. Basic Net Income (Loss) Per Common Share
Income (loss) from
continuing operations $ 381 $ 320 $ (29) $ 927
Accrued dividends on ESOP preferred
stock, net (11) (11) (34) (33)
Adjusted income (loss)from
continuing operations 370 309 (63) 894
Discontinued operations - - (190) -
Adjusted net income (loss) $ 370 $ 309 $ (253) $ 894
Average common shares outstanding
during the period 327,655 325,237 327,738 324,430
Common shares issuable with respect
to exchangeable shares 1,650 1,908 1,650 1,908
Adjusted average shares outstanding
for the period 329,305 327,145 329,388 326,338
Basic earnings (loss) per share:
Continuing operations $ 1.12 $ 0.94 $ (0.19) $ 2.74
Discontinued operations - - (0.58) -
Basic earnings per share $ 1.12 $ 0.94 $ (0.77) $ 2.74
II. Diluted Net Income (Loss) Per Common Share
Income (loss) from
continuing operations $ 381 $ 320 $ (29) $ 927
ESOP expense adjustment, net of tax 1 - - -
Interest on convertible debt,
net of tax 4 1 - 2
Accrued dividends on ESOP preferred
stock, net - - (34) -
Adjusted income (loss) from
continuing operations 386 321 (63) 929
Discontinued operations - - (190) -
Adjusted net income (loss) $ 386 $ 321 $ (253) $ 929
Average common shares outstanding
during the period 327,655 325,237 327,738 324,430
Stock options, incentive and
exchangeable shares 6,535 5,841 1,650 5,841
Convertible debt 6,595 2,644 - 2,644
ESOP preferred stock 26,811 27,418 - 27,418
Adjusted average shares outstanding
for the period 367,596 361,140 329,388 360,333
Diluted earnings (loss) per share:
Continuing operations $ 1.05 $ 0.89 $ (0.19) $ 2.58
Discontinued operations - - (0.58) -
Diluted earnings per share $ 1.05 $ 0.89 $ (0.77) $ 2.58