v3.25.4

Note 12 - Reduction of Inventory to Fair Value | 12 Months Ended
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Oct. 31, 2025
Reduction of Inventory to Fair Value |
Reduction of Inventory to Fair Value | 12. Reduction of Inventory to Fair Value We had 440, 469 and 380 communities under development and held for future development or sale at October 31, 2025, 2024 and 2023, respectively, which we evaluated for impairment indicators (i.e., those with a projected operating loss). We identified impairment indicators in 12 of our communities with an aggregate carrying value of $75.4 million during the year ended October 31, 2025. The impairment analyses resulted in impairment charges of $21.4 million. We identified impairment indicators in four of our communities with an aggregate carrying value of $41.1 million during the year ended October 31, 2024. The impairment analyses resulted in impairment charges of $10.0 million. We performed an undiscounted future cash flow analysis for one community during the year ended October 31, 2023, for which we had recorded an impairment in the prior year. As a result of such analysis, we did not identify any additional impairment for the community. Our aggregate impairment charges are included within “Inventory impairments and land option write-offs” in the Consolidated Statement of Operations and deducted from inventory. The following table represents impairments by segment for fiscal 2025 and 2024:
(Dollars in millions) |  | Year Ended October 31, 2025 |
|  |  |  |  |  | Dollar |  |  | Pre- |
|  | Number of |  |  | Amount of |  |  | Impairment |
|  | Communities |  |  | Impairment |  |  | Value (1) |
Northeast |  |  | 6 |  |  | $ | 12.4 |  |  | $ | 39.8 |
Southeast |  |  | 1 |  |  |  | 1.1 |  |  |  | 4.0 |
West |  |  | 5 |  |  |  | 7.9 |  |  |  | 31.6 |
Total |  |  | 12 |  |  | $ | 21.4 |  |  | $ | 75.4 |
(Dollars in millions) |  | Year Ended October 31, 2024 |
|  |  |  |  |  | Dollar |  |  | Pre- |
|  | Number of |  |  | Amount of |  |  | Impairment |
|  | Communities |  |  | Impairment |  |  | Value (1) |
Northeast |  |  | 2 |  |  | $ | 4.8 |  |  | $ | 16.0 |
Southeast |  |  | - |  |  |  | - |  |  |  | - |
West |  |  | 2 |  |  |  | 5.2 |  |  |  | 25.0 |
Total |  |  | 4 |  |  | $ | 10.0 |  |  | $ | 41.0 |
(1) | Represents carrying value, net of prior period impairments, if any, at the time of recording the applicable period’s impairments.
Write-offs of options, engineering and capitalized interest costs are also recorded in “Inventory impairments and land option write-offs” when we redesign communities, abandon certain engineering costs or do not exercise options in various locations because the pro forma profitability is not projected to produce adequate returns on investment commensurate with the risk. The total aggregate write-offs related to these items were $18.2 million, $1.6 million and $1.5 million for the years ended October 31, 2025, 2024 and 2023, respectively. Occasionally, these write-offs are offset by recovered deposits, sometimes through legal action, which had been written off in a prior period as walk-away costs. Historically, these recoveries have not been significant in comparison to the total costs written off. The following table represents write-offs of such costs by segment for fiscal 2025, 2024 and 2023:
|  | Year Ended October 31, |
(In millions) |  | 2025 |  |  | 2024 |  |  | 2023 |
Northeast |  | $ | 4.3 |  |  | $ | 0.4 |  |  | $ | 0.5 |
Southeast |  |  | 4.6 |  |  |  | 0.9 |  |  |  | 0.5 |
West |  |  | 9.3 |  |  |  | 0.3 |  |  |  | 0.5 |
Total |  | $ | 18.2 |  |  | $ | 1.6 |  |  | $ | 1.5 |

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