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Note 3 - Interest

6 Months Ended

Apr. 30, 2021

3.	Interest

Interest costs incurred, expensed and capitalized were:

	Three Months Ended				Six Months Ended
	April 30,				April 30,
(In thousands)	2021		2020		2021		2020
Interest capitalized at beginning of period	$	65,327	$	67,879	$	65,010	$	71,264
Plus interest incurred(1)		41,870		45,323		83,327		89,657
Less cost of sales interest expensed		21,725		18,589		38,890		36,725
Less other interest expensed(2)(3)		22,033		26,869		46,008		51,872
Less interest contributed to unconsolidated joint venture(4)		3,667		-		3,667		4,580
Interest capitalized at end of period(5)	$	59,772	$	67,744	$	59,772	$	67,744

(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 $17.5 million and $13.8 million for the three months ended April 30, 2021 and 2020, respectively, and $33.7 million and $28.7 million for the six months ended April 30, 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 $4.5 million and $13.1 million for the three months ended April 30, 2021 and 2020, respectively, and $12.3 million and $23.2 million for the six months ended April 30, 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					Six Months Ended
	April 30,					April 30,
(In thousands)	2021		2020			2021		2020
Other interest expensed	$	22,033	$	26,869		$	46,008	$	51,872
Interest paid by our mortgage and finance subsidiaries		527		509			952		1,279
Decrease (increase) in accrued interest		14,720		(5,553	)		242		(17,371	)
Cash paid for interest, net of capitalized interest	$	37,280	$	21,825		$	47,202	$	35,780

(4)	Represents capitalized interest which was included as part of the assets contributed to joint ventures, as discussed in Note 18. There was no impact to the Condensed Consolidated Statement of Operations as a result of these transactions.
(5)	Capitalized interest amounts are shown gross before allocating any portion of impairments, if any, to capitalized interest.