EXHIBIT 11.1 HORIZON/CMS HEALTHCARE CORPORATION STATEMENT RE COMPUTATION OF PER SHARE EARNINGS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) YEAR ENDED MAY 31, --------------------------------- 1996 1995 1994 ---------- --------- ---------- COMMON AND COMMON EQUIVALENTS: Earnings before extraordinary item................... $ 8,674 $ 23,357 $ (20,295) Extraordinary item, net of tax....................... (31,328) 2,571 734 ---------- --------- ---------- Net earnings (loss).................................. $ (22,654) $ 25,928 $ (19,561) ========== ========= ========== Applicable common shares: Weighted average outstanding shares during the period.............................................. 51,406 47,207 36,078 Weighted average shares issuable upon excercise of common stock equivalents outstanding (principally stock options and warrants using the treasury stock method)............................................. 642 643 1,000 ---------- --------- ---------- Total................................................ 52,048 47,850 37,078 ========== ========= ========== Earnings (loss) per share: Earnings before extraordinary item................... $ 0.16 $ 0.49 $ (0.55) Extraordinary item, net of tax....................... (0.60) 0.05 0.02 ---------- --------- ---------- Net earnings (loss).................................. $ (0.44) $ 0.54 $ (0.53) ---------- --------- ---------- ASSUMING FULL DILUTION: Earnings before extraordinary item................... $ 8,674 $ 23,357 $ (20,295) Extraordinary item, net of tax....................... (31,328) 2,571 734 ---------- --------- ---------- Net earnings (loss).................................. $ (22,654) $ 25,928 $ (19,561) ========== ========= ========== Applicable common shares: Weighted average outstanding shares during the period.............................................. 51,406 47,207 37,150 Weighted average shares issuable upon exercise of common stock equivalents outstanding (principally stock options and warrants using the treasury stock method and convertible debentures).................. 794 650 2,901 ---------- --------- ---------- Total................................................ 52,200 47,857 40,051 ---------- --------- ---------- Earnings (loss) per share: Earnings before extraordinary item................... $ 0.16 $ 0.49 $ (0.55) Extraordinary item, net of tax....................... (0.60) 0.05 0.02 ---------- --------- ---------- Net earnings (loss).................................. $ (0.44) $ 0.54 $ (0.53) ========== ========= ==========