1 EXHIBIT 11 ITT INDUSTRIES, INC. AND SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (IN MILLIONS, EXCEPT PER SHARE) THREE MONTHS ENDED MARCH 31, ------------------- 1996 1995 ----- ----- PRIMARY BASIS -- Net income .................................................. $ 40 $ 228 ESOP preferred dividends -- net of tax ...................... -- (8) ---- ----- Net income applicable to primary earnings per share ......... $ 40 $ 220 ---- ----- Average common shares outstanding ........................... 117 106 Common shares issuable in respect to common stock equivalents 3 1 ---- ----- Average common equivalent shares ............................ 120 107 ---- ----- Earnings Per Share Continuing operations ....................................... $.33 $ .34 Discontinued operations ..................................... -- 1.71 ---- ----- Net income .................................................. $.33 $2.05 ==== ===== FULL DILUTED BASIS -- Net income applicable to primary earnings per share ......... $ 40 $ 220 ESOP preferred dividends -- net of tax ...................... -- 8 If converted ESOP expense adjustment -- net of tax benefit .. -- (4) ---- ----- Net income applicable to fully diluted earnings per share ... $ 40 $ 224 ---- ----- Average common equivalent shares ............................ 120 107 Additional common shares issuable assuming full dilution .... -- 10 ---- ----- Average common equivalent shares assuming full dilution ..... 120 117 ---- ----- Earnings Per Share Continuing operations ....................................... $.33 $ .34 Discontinued operations ..................................... -- 1.57 ---- ----- Net income .................................................. $.33 $1.91 ==== ===== In 1995, the Series N convertible preferred stock was considered a common stock equivalent. With respect to options, it is assumed that the proceeds to be received upon exercise are used to acquire common stock of the Company. The calculation impact of dilutive securities is determined quarterly based on the forecast of annual earnings. 12