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EXHIBIT 11.
MICROSOFT CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(In millions, except earnings per share) (Unaudited)
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Three Months Nine Months
Ended Ended
March 31 March 31
1996 1997 1996 1997
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Weighted average number of common shares
outstanding (3) 1,186 1,194 1,180 1,196
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Earnings per common share (3) $0.47 $0.87 $1.39 $2.00
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Common stock equivalents:
Preferred stock (1) 13 4
Employee stock options (2) 92 115 98 107
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Average common and common stock equivalents
outstanding (3) 1,278 1,322 1,278 1,307
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Diluted earnings per share (3) $0.44 $0.79 $1.28 $1.83
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(1) Calculated under the "if-converted" method.
(2) Calculated under the "treasury stock" method.
(3) Share and per share amounts for the three and nine months ended March 31,
1996 have been restated to reflect a two-for-one stock split in December
1996.
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings Per Share. The new rule will
require specific disclosure of both diluted earnings per share and earnings per
common share calculated without the dilutive impacts of outstanding stock
options or convertible securities such as preferred stock. There was no material
difference between reported earnings per share and diluted earnings per share
for any period presented.
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