Does this note project favorably on the future of Lennar Corporation? Explain.

HOME BUILDING BLUES

LENNAR CORPORATION AND SUBSIDIARIES* CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended November 30, 2008, 2007, and 2006
	2008	2007	2006
Revenues:	(Dollars in thousands, except per share amounts)
Homebuilding	$4,263,038	9,730,252	15,623,040
Financial services	312,379	456,529	643,622
Total revenues	4,575,417	10,186,781	16,266,662
Costs and expenses:
Homebuilding (1)	4,541,881	12,189,077	14,677,565
Financial services (2)	343,369	450,409	493,819
Corporate general and administrative	129,752	173,202	193,307
Total costs and expenses	5,015,002	12,812,688	15,364,691
Gain on recapitalization of unconsolidated entity	133,097	175,879	—
Goodwill impairments	—	190,198	—
Equity in loss from unconsolidated entities (3)	59,156	362,899	12,536
Management fees and other income (expense), net (4)	199,981	76,029	66,629
Minority interest income (expense), net	4,097	1,927	13,415
	561,528	3,081,081	942,649
Earnings (loss) before (provision) benefit for income taxes (Provision) benefit for income taxes (5)	547,557	1,140,000	348,780
Net earnings (loss)	$1,109,085	1,941,081	593,869
Basic earnings (loss) per share	($7.00)	12.31	3.76
Diluted earnings (loss) per share	($7.00)	12.31	3.69

(1) Homebuilding costs and expenses include $340.5 million, $2,445.1 million, and $501.8 million, respectively, of valuation adjustments and writeoffs of option deposits and preacquisition costs for the years ended November 30, 2008, 2007 and 2006.

(2) Financial Services costs and expenses for the year ended November 30, 2008 include a $27.2 million impairment of goodwill.

(3) Equity in loss from unconsolidated entities includes $32.2 million, $364.2 million, and 126.4 million, respectively, of the Company’s share of SFAS 144 valuation adjustments related to assets of unconsolidated entities in which the Company has investments for the years ended November 30, 2008, 2007, and 2006.

(4) Management fees and other income (expense), net includes $172.8 million, $132.2 million, and $14.5 million, respectively, of APB 18 valuation adjustments to the Company’s investments in unconsolidated entities for the years ended November 30, 2008, 2007, and 2006.

(5) (Provision) benefit for income taxes for the year ended November 30, 2008 includes a valuation allowance of $730.8 million that the Company recorded against its deferred tax assets.

Required

a. Would you consider the presentation to be a multiplestep income statement or a singlestep income statement? Comment.

b. Does it appear that there is a 100% ownership in all consolidated subsidiaries?

c. If a subsidiary were not consolidated but rather accounted for using the equity method, would this change net earnings (loss)? Explain.

d. Describe equity in loss from unconsolidated entities (see Note 3).

e. Comment on Note 1. Does this note project favorably on the future of Lennar Corporation? Explain.

f. Comment on Note 2. Why take an impairment for goodwill under financial services? Why is this goodwill impairment disclosed separately from the line item goodwill impairments for 2007 ($190,198,000)?