EXHIBIT 11.1 THE PMI GROUP, INC. AND SUBSIDIARIES COMPUTATION OF NET INCOME PER SHARE THREE MONTHS SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, -------------------------- -------------------------- (In thousands, except per share data) 1997 1996 1997 1996 ------------ ----------- ----------- ------------ PRIMARY NET INCOME PER SHARE Adjusted shares outstanding: Average common shares outstanding 33,618 35,011 33,920 35,011 Net shares to be issued upon exercise of dilutive stock options after applying treasury stock method 98 79 106 94 ------- ------- ------- ------- Average shares outstanding 33,716 35,090 34,026 35,105 ======= ======= ======= ======= Net income $42,279 $41,220 $91,451 $78,210 ======= ======= ======= ======= Primary net income per share $ 1.25 $ 1.17 $ 2.69 $ 2.23 ======= ======= ======= ======= FULLY DILUTED NET INCOME PER SHARE Adjusted shares outstanding: Average common shares outstanding 33,618 35,011 33,920 35,011 Net shares to be issued upon exercise of dilutive stock options after applying treasury stock method 153 79 156 94 ------- ------- ------- ------- Average shares outstanding 33,771 35,090 34,076 35,105 ======= ======= ======= ======= Net income $42,279 $41,220 $91,451 $78,210 ======= ======= ======= ======= Fully diluted net income per share $ 1.25 $ 1.17 $ 2.68 $ 2.23 ======= ======= ======= ======= 24