HECTOR COMMUNICATIONS CORPORATION AND SUBSIDIARIES EXHIBIT 11 CALCULATION OF EARNINGS PER SHARE Year Ended December 31 ------------------------------------- Basic: 2004 2003 2002 - ------- ----------- ----------- ----------- Income before cumulative effect of change in accounting principle: Continuing operations $ 4,644,383 $ 4,296,906 $ 2,324,197 Discontinued operations 881,854 1,330,692 Cumulative effect of accounting change (3,146,569) ----------- ----------- ----------- Net income $ 4,644,383 $ 5,178,760 $ 508,320 =========== =========== =========== Common shares: Weighted average number of common shares outstanding 3,634,509 3,487,129 3,498,284 =========== =========== =========== Net income per common share: Before cumulative effect of change in accounting principle: Continuing operations $ 1.28 $ 1.23 $ .67 Discontinued operations .25 .38 Cumulative effect of accounting change (.90) ----------- ----------- ----------- $ 1.28 $ 1.49 $ .15 =========== =========== =========== Diluted: - ------------- Income before cumulative effect of change in accounting principle: Continuing operations $ 4,644,383 $ 4,296,906 $ 2,324,197 Discontinued operations 881,854 1,330,692 Cumulative effect of accounting change (3,146,569) ----------- - ---------- ----------- Net income $ 4,644,383 $ 5,178,760 $ 508,320 =========== =========== =========== Common and common equivalent shares: Weighted average number of common shares outstanding 3,634,509 3,487,129 3,498,284 Dilutive effect of convertible preferred shares outstanding 203,854 220,100 220,100 Dilutive effect of stock options outstanding after application of treasury stock method 130,667 56,124 45,413 Dilutive effect of Employee Stock Purchase Plan shares subscribed 823 1,151 5,885 ----------- ----------- ----------- 3,969,853 3,764,504 3,769,682 =========== =========== =========== Diluted net income per share: Before cumulative effect of change in accounting principle: Continuing operations $ 1.17 $ 1.14 $ .62 Discontinued operations .23 .35 Cumulative effect of accounting change (.84) ----------- ----------- ----------- $ 1.17 $ 1.38 $ .13 =========== =========== ===========