Interest

Interest costs incurred, expensed and capitalized were:

	Three Months Ended July 31,		Nine Months Ended July 31,
(In thousands)	2018	2017	2018	2017

Interest capitalized at beginning of period	$65,355	$90,960	$71,051	$96,688
Plus interest incurred (1)	40,438	39,089	121,617	116,944
Less cost of sales interest expensed	13,424	19,371	45,080	58,030
Less other interest expensed (2)(3)	24,859	23,559	80,078	68,483
Interest capitalized at end of period (4)	$67,510	$87,119	$67,510	$87,119

(

)

Data does

not

include interest incurred by our mortgage and finance subsidiaries.

(

)

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, which amounted to

$20.2

million and

$17.2

million for the

three

months ended

July 31, 2018

and

2017,

respectively, and

$59.7

million and

$46.5

million for the

nine

months ended

July 31, 2018

and

2017,

respectively. Other interest also includes interest on completed homes, land in planning and fully developed lots without homes under construction, which does

not

qualify for capitalization, and therefore, is expensed. This component of other interest was

$4.6

million and

$6.4

million for the

three

months ended

July 31, 2018

and

2017,

respectively, and

$20.4

million and

$22.0

million for the

nine

months ended

July 31, 2018

and

2017,

respectively.

(

)

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 July 31,		Nine Months Ended July 31,
(In thousands)	2018	2017	2018	2017
Other interest expensed	$24,859	$23,559	$80,078	$68,483
Interest paid by our mortgage and finance subsidiaries	616	465	1,802	1,549
Decrease in accrued interest	20,672	17,528	23,974	18,882
Cash paid for interest, net of capitalized interest	$46,147	$41,552	$105,854	$88,914

(

)

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