Inventory

12 Months Ended

Oct. 31, 2024

Major components of inventory at October 31, 2024 and 2023 consisted of the following (amounts in thousands):


	October 31, 2024		October 31, 2023
Land deposits and costs of future communities	$	620,040	$	549,035
Land and land development costs	2,532,221		2,631,147
Land and land development costs associated with homes under construction	3,617,266		2,916,334
Total land and land development costs	6,769,527		6,096,516

Homes under construction	2,458,541		2,515,484
Model homes (1)	484,857		445,578
	$	9,712,925	$	9,057,578

(1) Includes the allocated land and land development costs associated with each of our model homes in operation.

The following table provides a summary of the composition of our inventory based on community status at October 31, 2024 and October 31, 2023 (amounts in thousands):


	October 31, 2024		October 31, 2023
Land controlled for future communities	$	200,166	$	173,175
Land owned for future communities	353,030		663,413
Operating communities	9,159,729		8,220,990
	$	9,712,925	$	9,057,578

Operating communities include communities offering homes for sale; communities that have sold all available home sites but have not completed delivery of the homes; and communities preparing to open for sale. The carrying value attributable to operating communities includes the cost of homes under construction, land and land development costs, the carrying cost of home sites in current and future phases of these communities, and the carrying cost of model homes.

Backlog consists of homes under contract but not yet delivered to our home buyers (“backlog”).

The amounts we have provided for inventory impairment charges and the expensing of costs that we believed not to be recoverable, included in home sales cost of revenues, in each of the three fiscal years ended October 31, 2024, 2023, and 2022, are shown in the table below (amounts in thousands):


	2024		2023		2022
Land controlled for future communities	$	6,676	$	10,712	$	13,051
Land owned for future communities	—		1,493		19,690
Operating communities	52,765		18,501		—
	$	59,441	$	30,706	$	32,741

We have also recognized $4.4 million, $30.6 million, and $6.8 million of impairment charges on land held for sale included in land sales and other cost of revenues during the fiscal years ended October 31, 2024, 2023, and 2022, respectively.

See Note 14, “Commitments and Contingencies,” for information regarding land purchase contracts.

At October 31, 2024, we evaluated our land purchase contracts, including those to acquire land for apartment developments, to determine whether any of the selling entities were VIEs and, if they were, whether we were the primary beneficiary of any of them. Under these land purchase contracts, we do not possess legal title to the land; our maximum exposure to loss is generally limited to deposits paid to the sellers and predevelopment costs incurred; and the creditors of the sellers generally have no recourse against us. At October 31, 2024, we determined that 297 land purchase contracts, with an aggregate purchase price of $5.59 billion, on which we had made aggregate deposits totaling $522.1 million, were VIEs, but that we were not the primary beneficiary of any VIE related to such land purchase contracts. At October 31, 2023, we determined that 251 land purchase contracts, with an aggregate purchase price of $3.79 billion, on which we had made aggregate deposits totaling $421.4 million, were VIEs, but that we were not the primary beneficiary of any VIE related to such land purchase contracts. See Note 7, “Accrued Expenses,” for information regarding liabilities related to consolidated inventory not owned.

Interest incurred, capitalized, and expensed in each of the three fiscal years ended October 31, 2024, 2023, and 2022, was as follows (amounts in thousands):


	2024		2023		2022
Interest capitalized, beginning of year	$	190,550	$	209,468	$	253,938
Interest incurred	128,743		140,426		135,029
Interest expensed to home sales cost of revenues	(128,962)		(139,410)		(164,831)
Interest expensed to land sales and other cost of revenues	(3,142)		(10,787)		(5,788)


Interest capitalized on investments in unconsolidated entities	(8,404)		(9,783)		(6,699)
Previously capitalized interest transferred to investments in unconsolidated entities	—		(244)		(2,412)
Previously capitalized interest on investments in unconsolidated entities transferred to inventory	1,012		880		231
Interest capitalized, end of year	$	179,797	$	190,550	$	209,468