Earnings Per Share

3 Months Ended

Feb. 28, 2017

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
	February 28,		February 29,
(In thousands, except per share amounts)	2017		2016
Numerator:
Net earnings attributable to Lennar	$	38,080	144,080
Less: distributed earnings allocated to nonvested shares	112		89
Less: undistributed earnings allocated to nonvested shares	278		1,420
Numerator for basic earnings per share	37,690		142,571
Less: net amount attributable to noncontrolling interests in Rialto's Carried Interest Incentive Plan (1)	339		202
Plus: interest on 3.25% convertible senior notes due 2021	—		1,982
Plus: undistributed earnings allocated to convertible shares	—		1,420
Less: undistributed earnings reallocated to convertible shares	—		1,325
Numerator for diluted earnings per share	$	37,351	144,446
Denominator:
Denominator for basic earnings per share - weighted average common shares outstanding	232,194		210,292
Effect of dilutive securities:
Share-based payments	2		4
Convertible senior notes	—		18,620
Denominator for diluted earnings per share - weighted average common shares outstanding	232,196		228,916
Basic earnings per share	$	0.16	0.68
Diluted earnings per share	$	0.16	0.63


(1)	The amounts presented above relate to Rialto's Carried Interest Incentive Plan adopted in June 2015 (see Note 9) 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 months ended February 28, 2017 and February 29, 2016, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.