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Note 3 - Interest

3 Months Ended

Jan. 31, 2021

3.	Interest

Interest costs incurred, expensed and capitalized were:

	Three Months Ended
	January 31,
(In thousands)	2021		2020
Interest capitalized at beginning of period	$	65,010	$	71,264
Plus interest incurred(1)		41,457		44,334
Less cost of sales interest expensed		17,165		18,136
Less other interest expensed(2)(3)		23,975		25,003
Less interest contributed to unconsolidated joint venture(4)		-		4,580
Interest capitalized at end of period(5)	$	65,327	$	67,879

(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, which amounted to $16.2 million and $14.9 million for the three months ended January 31, 2021 and 2020, 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 $7.8 million and $10.1 million for the three months ended January 31, 2021 and 2020, respectively.

(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)	2021			2020
Other interest expensed	$	23,975		$	25,003
Interest paid by our mortgage and finance subsidiaries		425			770
Increase in accrued interest		(14,478	)		(11,818	)
Cash paid for interest, net of capitalized interest	$	9,922		$	13,955

(4)	Represents capitalized interest which was included as part of the assets contributed to the joint venture the Company entered into in December 2019, 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.