HFS Incorporated and Subsidiaries COMPUTATION OF PER SHARE EARNINGS (Unaudited) (In thousands, except per share data) For the Three Months Ended June 30, ----------------------------------------- 1997 1996 ------------- ------------------------ Primary and Fully Fully Diluted Primary Diluted ------------- --------- ---------- Net income (loss) ........................ $(106,449) $ 59,939 $ 59,939 Convertible debt interest and amortization of deferred loan costs, net of tax .... -- 1,122 1,122 --------- --------- --------- Net income (loss) as adjusted ............ $(106,449) $ 61,061 $ 61,061 ========= ========= ========= Weighted average common shares outstanding 158,355 138,594 138,594 Incremental shares for outstanding stock options and warrants ............ -- 11,947 12,554 Convertible debt ......................... -- 8,257 8,257 --------- --------- --------- Weighted average common and common equivalent shares outstanding ......... 158,355 158,798 159,405 ========= ========= ========= Net income (loss) per share .............. $ (0.67) $ 0.38 $ 0.38 ========= ========= ========= For the Six Months Ended June 30, --------------------------------------- 1997 1996 ------------- ----------------------- Primary and Fully Fully Diluted Primary Diluted ------------- --------- --------- Net income (loss) ........................ $ (15,344) $ 103,617 $ 103,617 Convertible debt interest and amortization of deferred loan costs, net of tax .... -- 2,244 2,244 --------- --------- --------- Net income (loss) as adjusted ............ $ (15,344) $ 105,861 $ 105,861 ========= ========= ========= Weighted average common shares outstanding 158,342 134,782 134,781 Incremental shares for outstanding stock options and warrants ............ -- 11,193 12,360 Convertible debt ......................... -- 8,257 8,257 --------- --------- --------- Weighted average common and common equivalent shares outstanding ......... 158,342 154,232 155,398 ========= ========= ========= Net income (loss) per share .............. $ (0.10) $ 0.69 $ 0.68 ========= ========= =========