1 EXHIBIT 11.1 THE PMI GROUP, INC. AND SUBSIDIARIES COMPUTATION OF NET INCOME PER SHARE THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, (In thousands, except per share data) 1996 1995 1996 1995 ------- ------- -------- -------- PRIMARY NET INCOME PER SHARE Adjusted shares outstanding: Average common shares outstanding 35,011 35,000 35,011 35,000 Net shares to be issued upon exercise of dilutive stock options after applying treasury stock method 89 93 90 75 ------- ------- -------- -------- Average shares outstanding 35,100 35,093 35,101 35,075 ======= ======= ======== ======== Net income $41,280 $35,115 $119,490 $101,391 ======= ======= ======== ======== Primary net income per share $ 1.18 $ 1.00 $ 3.40 $ 2.89 ======= ======= ======== ======== FULLY DILUTED NET INCOME PER SHARE Adjusted shares outstanding: Average common shares outstanding 35,011 35,000 35,011 35,000 Net shares to be issued upon exercise of dilutive stock options after applying treasury stock method 117 93 117 92 ------- ------- -------- -------- Average shares outstanding 35,128 35,093 35,128 35,092 ======= ======= ======== ======== Net income $41,280 $35,115 $119,490 $101,391 ======= ======= ======== ======== Fully diluted net income per share $ 1.18 $ 1.00 $ 3.40 $ 2.89 ======= ======= ======== ========