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Real Estate and Capitalized Interest | 12 Months Ended
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Dec. 31, 2011
Real Estate and Capitalized Interest [Abstract] |
REAL ESTATE AND CAPITALIZED INTEREST | NOTE 2 — REAL ESTATE AND CAPITALIZED INTEREST Real estate at December 31 consists of the following (in thousands):
|  |  | September 30, |  |  |  | September 30, |
|  | 2011 |  |  | 2010 |
Homes under contract under construction (1) |  | $ | 101,445 |  |  | $ | 97,002 |
Unsold homes, completed and under construction (1) |  |  | 97,246 |  |  |  | 87,011 |
Model homes (1) |  |  | 49,892 |  |  |  | 37,027 |
Finished home sites and home sites under development (2) |  |  | 467,867 |  |  |  | 435,473 |
Land held for development (2) (3) |  |  | 69,067 |  |  |  | 59,692 |
Land held for sale |  |  | 29,908 |  |  |  | 22,723 |
|  | $ | 815,425 |  |  | $ | 738,928 |
(1) | Also includes the allocated land and land development costs associated with each lot for these homes.
(2) | Includes communities where we have decided to cease operations (mothball) as we have determined that their economic performance would be maximized by deferring development. In the future, some of these communities may be re-opened while others may be sold to third parties. If we deem our carrying value to not be fully recoverable, we adjust our carrying value for these assets to fair value at the time they are placed into mothball. We do not capitalize interest for such mothballed assets, and all ongoing costs of land ownership (i.e., property taxes, homeowner association dues, etc.) are expensed as incurred.
(3) | Land held for development primarily reflects land and land development costs related for land where development activity is not currently underway but is expected to begin or resume in the future. We may cease development activity on certain land holdings, as they represent a portion of a large land parcel that we plan to build out over several years.
As previously noted, in accordance with ASC 360-10, each of our land inventory and related real estate assets is reviewed for recoverability when impairment indicators are present, as our inventory is considered “long-lived” in accordance with GAAP. Due to the current environment, we evaluate all of our real estate assets for impairment on a quarterly basis. ASC 360-10 requires impairment charges to be recorded if the asset is not deemed recoverable and the fair value of such assets is less than their carrying amounts. Our determination of fair value is based on projections and estimates. We also evaluate alternative product offerings in communities where impairment indicators are present and other strategies for the land exist, such as selling or holding the land for sale. Based on these reviews of all our communities, we recorded the following real-estate and joint-venture impairment charges during the years ended December 31, 2011, 2010 and 2009 (in thousands):
|  |  | September 30, |  |  |  | September 30, |  |  |  | September 30, |
|  | Years Ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Terminated option/purchase contracts: |  |  |  |  |  |  |  |  |  |  |  |
West |  | $ | 863 |  |  | $ | 0 |  |  | $ | 7,038 |
Central |  |  | 1,904 |  |  |  | 1,030 |  |  |  | 60,645 |
East |  |  | 0 |  |  |  | 0 |  |  |  | 3,270 |
Total |  | $ | 2,767 |  |  | $ | 1,030 |  |  | $ | 70,953 |
Real estate inventory impairments (1): |  |  |  |  |  |  |  |  |  |  |  |
West |  | $ | 3,797 |  |  | $ | 274 |  |  | $ | 18,459 |
Central |  |  | 1,610 |  |  |  | 4,809 |  |  |  | 16,744 |
East |  |  | 696 |  |  |  | 321 |  |  |  | 5,334 |
Total |  | $ | 6,103 |  |  | $ | 5,404 |  |  | $ | 40,537 |
Impairments of joint venture investments: |  |  |  |  |  |  |  |  |  |  |  |
West |  | $ | 0 |  |  | $ | 295 |  |  | $ | 274 |
Central |  |  | 0 |  |  |  | 0 |  |  |  | 2,558 |
East |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total |  | $ | 0 |  |  | $ | 295 |  |  | $ | 2,832 |
Impairments of land held for sale: |  |  |  |  |  |  |  |  |  |  |  |
West |  | $ | 5,928 |  |  | $ | 0 |  |  | $ | 7,815 |
Central |  |  | 127 |  |  |  | 17 |  |  |  | 6,911 |
East |  |  | 399 |  |  |  | 0 |  |  |  | 0 |
Total |  | $ | 6,454 |  |  | $ | 17 |  |  | $ | 14,726 |
Total impairments: |  |  |  |  |  |  |  |  |  |  |  |
West |  | $ | 10,588 |  |  | $ | 569 |  |  | $ | 33,586 |
Central |  |  | 3,641 |  |  |  | 5,856 |  |  |  | 86,858 |
East |  |  | 1,095 |  |  |  | 321 |  |  |  | 8,604 |
Total |  | $ | 15,324 |  |  | $ | 6,746 |  |  | $ | 129,048 |
(1) | Included in the real estate inventory impairments are impairments of individual homes in a community where the underlying community was not also impaired, as follows (in thousands):
|  |  | September 30, |  |  |  | September 30, |  |  |  | September 30, |
|  | Years Ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Individual home impairments: |  |  |  |  |  |  |  |  |  |  |  |
West |  | $ | 700 |  |  | $ | 274 |  |  | $ | 7,969 |
Central |  |  | 1,149 |  |  |  | 2,912 |  |  |  | 6,136 |
East |  |  | 341 |  |  |  | 321 |  |  |  | 3,208 |
Total |  | $ | 2,190 |  |  | $ | 3,507 |  |  | $ | 17,313 |
The tables below reflect the number of communities with real estate inventory impairments for the years ended December 31, 2011, 2010 and 2009, excluding home-specific impairments (as noted above) and the fair value of these communities (dollars in thousands):
|  |  | September 30, |  |  |  | September 30, |  |  |  | September 30, |
|  | Number of Communities Impaired |  |  | Impairment Charges |  |  | Fair Value of Communities Impaired (Carrying Value less Impairments) |
|  | Year Ended December 31, 2011 |
West |  |  | 5 |  |  | $ | 3,097 |  |  | $ | 19,963 |
Central |  |  | 8 |  |  |  | 461 |  |  |  | 17,104 |
East |  |  | 1 |  |  |  | 355 |  |  |  | 2,006 |
Total |  |  | 14 |  |  | $ | 3,913 |  |  | $ | 39,073 |
|  | Year Ended December 31, 2010 |
West |  |  | 0 |  |  | $ | 0 |  |  | $ | N/A |
Central |  |  | 7 |  |  |  | 1,897 |  |  |  | 13,073 |
East |  |  | 0 |  |  |  | 0 |  |  |  | N/A |
Total |  |  | 7 |  |  | $ | 1,897 |  |  | $ | 13,073 |
|  | Year Ended December 31, 2009 |
West |  |  | 12 |  |  | $ | 10,490 |  |  | $ | 43,542 |
Central |  |  | 17 |  |  |  | 10,608 |  |  |  | 28,845 |
East |  |  | 6 |  |  |  | 2,126 |  |  |  | 7,476 |
Total |  |  | 35 |  |  | $ | 23,224 |  |  | $ | 79,863 |
Subject to sufficient qualifying assets, we capitalize our development period interest costs incurred in connection with the development and construction of real estate. Capitalized interest is allocated to real estate when incurred and charged to cost of closings when the related property is delivered. A summary of our capitalized interest is as follows (in thousands):
|  |  | September 30, |  |  |  | September 30, |
|  | Years Ended December 31, |
|  | 2011 |  |  | 2010 |
Capitalized interest, beginning of year |  | $ | 11,679 |  |  | $ | 14,187 |
Interest incurred |  |  | 43,393 |  |  |  | 43,442 |
Interest expensed |  |  | (30,399 | ) |  |  | (33,722 | )
Interest amortized to cost of home, land closings and impairments |  |  | (9,863 | ) |  |  | (12,228 | )
Capitalized interest, end of year (1) |  | $ | 14,810 |  |  | $ | 11,679 |
(1) | Approximately $750,000 of the capitalized interest is related to our joint venture investments and is a component of “Investments in unconsolidated entities” in our consolidated balance sheet as of December 31, 2011 and 2010.

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- Definition The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.6) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Research Bulletin (ARB) -Number 43 -Chapter 3 -Section A -Paragraph 9 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 6 -Subparagraph a, b, c -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6361739&loc=d3e7789-107766 + Details
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