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Note 3 - Interest

6 Months Ended

Apr. 30, 2022

3.	Interest

Interest costs incurred, expensed and capitalized were:

	Three Months Ended				Six Months Ended
	April 30,				April 30,
(In thousands)	2022		2021		2022		2021
Interest capitalized at beginning of period	$	63,804	$	65,327	$	58,159	$	65,010
Plus interest incurred(1)		33,872		41,870		66,655		83,327
Less cost of sales interest expensed		21,678		21,725		35,423		38,890
Less other interest expensed(2)(3)		12,425		22,033		25,818		46,008
Less interest contributed to unconsolidated joint venture(4)		-		3,667		-		3,667
Interest capitalized at end of period(5)	$	63,573	$	59,772	$	63,573	$	59,772

(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 $9.0 million and $17.5 million for the three months ended April 30, 2022 and 2021, respectively, and $20.5 million and $33.7 million for the six months ended April 30, 2022 and 2021, 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 $3.4 million and $4.5 million for the three months ended April 30, 2022 and 2021, respectively, and $5.3 million and $12.3 million for the six months ended April 30, 2022 and 2021, 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)	2022		2021		2022			2021
Other interest expensed	$	12,425	$	22,033	$	25,818		$	46,008
Interest paid by our mortgage and finance subsidiaries		362		527		830			952
Decrease (increase) in accrued interest		18,901		14,720		(214	)		242
Cash paid for interest, net of capitalized interest	$	31,688	$	37,280	$	26,434		$	47,202

(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.