1 EXHIBIT 11 ARBOR DRUGS, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE Three Months Ended Six Months Ended (In Thousands) January 31, January 31, ----------------------- ---------------------- 1995 1994 1995 1994 ---- ---- ---- ---- A. Net Income (a) $ 7,488 $ 6,474 $ 12,197 $ 10,479 ======== ======== ======== ========= Weighted average number of common shares outstanding (a) 16,408 16,255 16,376 16,250 Effect of the issuance of stock options and assumed exercise of stock options at prices which are lower than the average market price of the common shares during the period, using the treasury stock method 178 167 170 144 -------- -------- -------- --------- B. Average number of common shares and common equivalent shares for primary earnings per share 16,586 16,422 16,546 16,394 ======== ======== ======== ========= Weighted average number of common shares outstanding (a) 16,408 16,255 16,376 16,250 Effect of the issuance of stock options and assumed exercise of options at prices which are lower than the market price of common stock at end of the period when such price is higher than average market 255 169 255 172 -------- -------- -------- --------- C. Common shares, assuming full dilution 16,663 16,424 16,631 16,422 ======== ======== ======== ========= Primary earnings per share A (b) $ .45 $ .39 $ 0.74 $ .64 - ======== ======= ======== ======== B Fully diluted earnings per share A (b) $ .45 $ .39 $ 0.73 $ .64 - ========= ========= ======== ========= C (a) These amounts agree with the related amounts in the Condensed Consolidated Statements of Income. (b) The actual difference between reported earnings per share and both primary earnings per share and fully diluted earnings, per share is less than $.01, but due to rounding, is shown as presented. 12