Earnings Per Share

9 Months Ended

Aug. 31, 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			Nine Months Ended
	August 31,			August 31,
(In thousands, except per share amounts)	2017		2016	2017	2016
Numerator:
Net earnings attributable to Lennar	$	249,165	235,842	500,890	598,391
Less: distributed earnings allocated to nonvested shares	88		81	290	256
Less: undistributed earnings allocated to nonvested shares	2,358		2,232	4,600	5,798
Numerator for basic earnings per share	246,719		233,529	496,000	592,337
Less: net amount attributable to noncontrolling interests in Rialto's Carried Interest Incentive Plan (1)	294		258	845	864
Plus: interest on 3.25% convertible senior notes due 2021	—		964	—	4,836
Plus: undistributed earnings allocated to convertible shares	—		2,232	—	5,797
Less: undistributed earnings reallocated to convertible shares	—		2,162	—	5,484
Numerator for diluted earnings per share	$	246,425	234,305	495,155	596,622
Denominator:
Denominator for basic earnings per share - weighted average common shares outstanding	232,673		223,549	232,361	215,814
Effect of dilutive securities:
Share-based payments	1		3	2	4
Convertible senior notes	—		8,266	—	14,399
Denominator for diluted earnings per share - weighted average common shares outstanding	232,674		231,818	232,363	230,217
Basic earnings per share	$	1.06	1.04	2.13	2.74
Diluted earnings per share	$	1.06	1.01	2.13	2.59


(1)	The amounts presented 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 the three and nine months ended August 31, 2017 and 2016, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.