EXHIBIT 11.3 NATIONAL MEDICAL ENTERPRISES, INC. AND SUBSIDIARIES STATEMENT RE: COMPUTATION OF PRO FORMA PER SHARE EARNINGS* THREE MONTHS ENDED AUGUST 31, ------------------- YEAR ENDED MAY 31, 1994 1993 1994 ------------ --------- --------- PRO FORMA PRO FORMA PRO FORMA COMBINED COMBINED COMBINED ------------ --------- --------- (AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) FOR PRIMARY EARNINGS PER SHARE Shares outstanding at beginning of period..... 165,898 165,898 166,081 Shares issued upon exercise of stock options.. 60 1 93 Shares issued as grants of restricted stock, net of cancellations......................... (48) -- -- Dilutive effect of outstanding stock options.. 1,114 209 2,287 Shares assumed issued in the Merger........... 33,190 33,190 33,190 -------- -------- -------- Pro forma weighted average number of shares and share equivalents outstanding............ 200,214 199,298 201,651 ======== ======== ======== Pro forma income from continuing operations... $ 214.4 $ 29.2 $ 52.9 Adjustment for interest on debentures, net of tax.......................................... .3 .1 .1 -------- -------- -------- Pro forma income for primary calculation..... $ 214.7 $ 29.3 $ 53.0 ======== ======== ======== Earnings per share from continuing operations before cumulative effect of a change in accounting principle......................... $ 1.07 $ .15 $ .26 ======== ======== ======== FOR FULLY DILUTED EARNINGS PER SHARE Pro forma weighted average number of shares used in primary calculation.................. 200,214 199,298 201,651 Additional dilutive effect of stock options... 97 -- 335 Assumed conversion of dilutive convertible debentures................................... 13,966 13,978 11,357 -------- -------- -------- Pro forma fully diluted weighted average number of shares............................. 214,277 213,276 213,343 ======== ======== ======== Pro forma income from continuing operations used in primary calculation.................. $ 214.7 $ 29.3 $ 53.0 Adjustments for interest expense, contractual allowances and income taxes.................. 6.6 1.2 1.7 -------- -------- -------- Adjusted pro forma income from continuing operations used in fully diluted calculation. $ 221.3 $ 30.5 $ 54.7 ======== ======== ======== Pro forma earnings per share from continuing operations before cumulative effect of a change in accounting principle............... $ 1.03 $ .14 $ .26 ======== ======== ======== - ------------------ * All shares in these tables are weighted on the basis of the number of days the shares were outstanding or assumed to be outstanding during each period.