Note 3 - Interest

6 Months Ended

Apr. 30, 2017

Notes to Financial Statements

Home Building Interest [Text Block]

3. Interest

Interest costs incurred, expensed and capitalized were:

	Three Months Ended April 30,				Six Months Ended April 30,
(In thousands)	2017		2016		2017		2016
Interest capitalized at beginning of period	$	94,438	$	117,113	$	96,688	$	123,898
Plus interest incurred (1)		39,156		44,224		77,855		86,183
Less cost of sales interest expensed		20,337		21,444		38,659		38,287
Less other interest expensed (2)(3)		22,297		24,084		44,924		45,309
Less interest contributed to unconsolidated joint venture (4)		-		-		-		10,676
Interest capitalized at end of period (5)	$	90,960	$	115,809	$	90,960	$	115,809

( 1 )	Data does not include interest incurred by our mortgage and finance subsidiaries.
( 2 )	Other interest expensed includes interest that doe s not qualify for interest capitalization because our assets that qualify for interest capitalization (inventory under development) do not exceed our debt , which amounted to $16.0 million and $12.2 million for the three months ended April 30, 2017 and 2016, respectively, and $29.3 million and $26.7 million for the six months ended April 30, 2017 and 2016, 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 $6.3 million and $11.9 million for the three months ended April 30, 2017 and 2016, respectively, and $15.6 million and $18.6 million for the six months ended April 30, 2017 and 2016, 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 April 30,					Six Months Ended April 30,
(In thousands)	2017		2016			2017		2016
Other interest expensed	$	22,297	$	24,084		$	44,924	$	45,309
Interest paid by our mortgage and finance subsidiaries		455		851			1,084		1,410
Decrease (increase) in accrued interest		591		(9,948	)		1,354		1,268
Cash paid for interest, net of capitalized interest	$	23,343	$	14,987		$	47,362	$	47,987

( 4 )	Represents capitalized interest which was included as part of the assets contributed to the joint venture the Company entered into in November 2015, as discussed in Note 17. 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 all ocating any portion of impairments, if any, to capitalized interest.