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Note 3 - Interest

3 Months Ended

Jan. 31, 2016

3.	Interest

Interest costs incurred, expensed and capitalized were:

	Three Months Ended January 31,
(In thousands)	2016	2015

Interest capitalized at beginning of period	$123,898	$109,158
Plus interest incurred(1)	41,959	41,472
Less cost of sales interest expensed	16,843	11,318
Less other interest expensed(2)(3)	21,225	25,071
Less interest contributed to unconsolidated joint venture(4)	10,676	-
Interest capitalized at end of period(5)	$117,113	$114,241

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

(2)

Other interest expensed includes interest that does not qualify for interest capitalization because our assets that qualify for interest capitalization (inventory under development) do not exceed our debt. Also includes interest on completed homes and land in planning, which does not qualify for capitalization, and therefore 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 on notes payable, which is calculated as follows:

	Three Months Ended January 31,
(In thousands)	2016	2015
Other interest expensed	$21,225	$25,071
Interest paid by our mortgage and finance subsidiaries	559	408
Decrease in accrued interest	11,216	1,010
Cash paid for interest, net of capitalized interest	$33,000	$26,489

(4)	Represents capitalized interest which was included as part of the assets contributed to the joint venture the Company entered into in November 2015, as discussed in Note 18. There was no impact to the Condensed Consolidated Statement of Operations as a result of this transaction.

(5)	Capitalized interest amounts are shown gross before allocating any portion of impairments, if any, to capitalized interest.