XML 86 R10.htm IDEA: XBRL DOCUMENT

Note 3

3 Months Ended

Jan. 31, 2013

3. Interest costs incurred, expensed and capitalized were:

	Three Months Ended January 31,
(In thousands)	2013		2012

Interest capitalized at beginning of period	$	116,056	$	121,441
Plus interest incurred(1)		32,653		36,345
Less cost of sales interest expensed		10,280		12,476
Less other interest expensed(2)(3)		24,000		21,995
Interest capitalized at end of period(4)	$	114,429	$	123,315

(1)	Does not include interest incurred by our mortgage and finance subsidiaries.

(2)

Other interest expensed is comprised of interest that does not qualify for capitalization because our assets that qualify for interest capitalization (inventory under development) do not exceed our debt. Interest on completed homes and land in planning which does not qualify for capitalization is expensed.

(3)	Cash paid for interest, net of capitalized interest, is the sum of other interest expensed, as defined above, and interest paid by our mortgage and finance subsidiaries adjusted for the change in accrued interest, which is calculated as follows:

	Three Months Ended January 31,
(In thousands)	2013			2012
Other interest expensed	$	24,000		$	21,995
Interest paid by our mortgage and finance subsidiaries		877			476
Increase in accrued interest		(8,220	)		(11,067	)
Cash paid for interest, net of capitalized interest	$	16,657		$	11,404

(4)	We have incurred significant inventory impairments in recent years, which are determined based on total inventory including capitalized interest. However, the capitalized interest amounts above are shown gross before allocating any portion of the impairments to capitalized interest.