EXHIBIT 11 McKESSON CORPORATION - CONSOLIDATED COMPUTATION OF EARNINGS PER COMMON SHARE FOR THE FIVE YEARS ENDED MARCH 31 (in thousands except per share amounts) 1996 1995 1994 1993 1992 -------- ---------- --------- --------- ------------- FULLY DILUTED EARNINGS PER SHARE Income (loss) after taxes from continuing operations $135,433 $(193,174) $126,428 $ 95,070 $ 22,077 Dividend requirements - convertible preferred stocks - - - - (7,081)/(1)/ Interest charges on convertible debentures - net of tax - - 18 1,352 - /(2)/ Contribution adjustment - Series B ESOP convertible preferred stock/(3)/ - (1,836) (3,706) (3,758) - /(2)/ -------- --------- -------- -------- --------- 135,433 (195,010) 122,740 92,664 14,996 Discontinued operations - 21,028 30,628 19,665 10,256 Discontinued operations - gain on sale of PCS - 576,656 - - - Extraordinary item - - (4,186) - - Cumulative effects of accounting changes - - (16,660) - (110,500) -------- --------- -------- -------- --------- Total $135,433 $ 402,674 $132,522 $112,329 $( 85,248) ======== ========= ======== ======== ========= Fully diluted shares Common shares outstanding/(4)/ 46,740 43,568 40,943 40,025 38,776 Convertible securities - dilutive - 1,882 3,160 4,783 - /(2)/ -------- --------- -------- -------- --------- Total 46,740 45,450 44,103 44,808 38,776 ======== ========= ======== ======== ========= Fully diluted earnings (loss) per share Continuing operations $ 2.90 $ (4.29) $ 2.78 $ 2.07 $ .39 Discontinued operations - .46 .70 .44 .26 Discontinued operations - gain on sale of PCS - 12.69 - - - Extraordinary item - - (.10) - - Cumulative effects of accounting changes - - (.38) - (2.85) -------- --------- -------- -------- --------- $ 2.90 $ 8.86 $ 3.00 $ 2.51 $ (2.20) ======== ========= ======== ======== ========= PRIMARY EARNINGS PER SHARE Income (loss) after taxes from continuing operations $135,433 $(193,174) $126,428 $ 95,070 $ 22,077 Dividend requirements - convertible preferred stocks/(1)/ - (3,501) (7,052) (7,010) (7,081) -------- --------- -------- -------- --------- 135,433 (196,675) 119,376 88,060 14,996 Discontinued operations - 21,028 30,628 19,665 10,256 Discontinued operations - gain on sale of PCS - 576,656 - - - Extraordinary item - - (4,186) - - Cumulative effects of accounting changes - - (16,660) - (110,500) -------- --------- -------- -------- --------- Total $135,433 $ 401,009 $129,158 $107,725 $ (85,248) ======== ========= ======== ======== ========= Common shares outstanding/(4)/ 46,646 43,568 40,789 40,025 38,776 ======== ========= ======== ======== ========= Primary earnings per share Continuing operations $ 2.90 $ (4.51) $ 2.93 $ 2.20 $ .39 Discontinued operations - .48 .75 .49 .26 Discontinued operations - gain on sale of PCS - 13.23 - - - Extraordinary item - - (.10) - - Cumulative effects of accounting changes - - (.41) - (2.85) -------- --------- -------- -------- --------- Total $ 2.90 $ 9.20 $ 3.17 $ 2.69 $ (2.20) ======== ========= ======== ======== ========= (1) Net of certain related tax benefits. (2) 1992 fully diluted earnings per share computation excludes the effect of convertible securities which were anti-dilutive. (3) Represents the assumed additional ESOP contribution expense that the Company would have incurred if the Series B ESOP convertible preferred stock had been converted at the beginning of the period presented. (4) Common shares outstanding have been computed by adding the monthly average (beginning of the month plus end of the month divided by 2), dividing the aggregate by 12 and adjusting this total for dilutive stock options using the treasury stock method. 23