Earnings Per Share

9 Months Ended

Aug. 31, 2016

Basic earnings per share is computed by dividing net earnings attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.

All outstanding nonvested shares that contain non-forfeitable rights to dividends or dividend equivalents that participate in undistributed earnings with common stock are considered participating securities and are included in computing earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and participation rights in undistributed earnings. The Company’s restricted common stock (“nonvested shares”) are considered participating securities.

Basic and diluted earnings per share were calculated as follows:



	Three Months Ended			Nine Months Ended
	August 31,			August 31,
(In thousands, except per share amounts)	2016		2015	2016	2015
Numerator:
Net earnings attributable to Lennar	$	235,842	223,312	598,391	521,291
Less: distributed earnings allocated to nonvested shares	81		91	256	271
Less: undistributed earnings allocated to nonvested shares	2,232		2,313	5,798	5,431
Numerator for basic earnings per share	233,529		220,908	592,337	515,589
Less: net amount attributable to noncontrolling interests in Rialto's Carried Interest Incentive Plan (1)	258		1,044	864	2,842
Plus: interest on 3.25% convertible senior notes due 2021	964		1,982	4,836	5,946
Plus: undistributed earnings allocated to convertible shares	2,232		2,313	5,797	5,430
Less: undistributed earnings reallocated to convertible shares	2,162		2,093	5,484	4,870
Numerator for diluted earnings per share	$	234,305	222,066	596,622	519,253
Denominator:
Denominator for basic earnings per share - weighted average common shares outstanding	223,549		206,439	215,814	204,120
Effect of dilutive securities:
Share-based payments	3		7	4	9
Convertible senior notes	8,266		24,102	14,399	26,506
Denominator for diluted earnings per share - weighted average common shares outstanding	231,818		230,548	230,217	230,635
Basic earnings per share	$	1.04	1.07	2.74	2.53
Diluted earnings per share	$	1.01	0.96	2.59	2.25


(1)	The amounts presented above relate to Rialto's Carried Interest Incentive Plan adopted in June 2015 (see Note 8) and represents the difference between the advanced tax distributions received by Rialto's subsidiary and the amount Lennar, as the parent company, is assumed to own.

For both the three and nine months ended August 31, 2016 and 2015, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.