Earnings Per Share

3 Months Ended

Feb. 28, 2018

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,
(In thousands, except per share amounts)	2018		2017
Numerator:
Net earnings attributable to Lennar	$	136,215	38,080
Less: distributed earnings allocated to nonvested shares	115		112
Less: undistributed earnings allocated to nonvested shares	1,282		273
Numerator for basic earnings per share	134,818		37,695
Less: net amount attributable to noncontrolling interests in Rialto's Carried Interest Incentive Plan (1)	210		339
Plus: interest on convertible senior notes	26		—
Plus: undistributed earnings allocated to convertible shares	1		—
Numerator for diluted earnings per share	$	134,635	37,356
Denominator:
Denominator for basic earnings per share - weighted average common shares outstanding (2)	253,665		236,852
Effect of dilutive securities:
Shared based payments	55		2
Convertible senior notes	728		—
Denominator for diluted earnings per share - weighted average common shares outstanding	254,448		236,854
Basic earnings per share (2)	$	0.53	0.16
Diluted earnings per share (2)	$	0.53	0.16


(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.


(2)	The weighted average common shares for the three months ended February 28, 2017 has been retroactively adjusted to include 4.7 million of Class B shares distributed in the stock dividend on November 27, 2017. As a result, basic and diluted earnings per share have also been retroactively adjusted.

For both the three months ended February 28, 2018 and 2017, there were no options to purchase shares of common stock that were outstanding and anti-dilutive.