Note 3 - Interest

3 Months Ended

Jan. 31, 2018

Notes to Financial Statements

Home Building Interest [Text Block]

3. Interest

Interest costs incurred, expensed and capitalized were:

	Three Months Ended January 31,
(In thousands)	2018		2017
Interest capitalized at beginning of period	$	71,051	$	96,688
Plus interest incurred(1)		41,165		38,699
Less cost of sales interest expensed		12,292		18,322
Less other interest expensed(2)(3)		29,131		22,627
Interest capitalized at end of period(4)	$	70,793	$	94,438

( 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 $19.6 million and $13.3 million for the three months ended January 31, 2018 and 2017, 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 $9.6 million and $9.3 million for the three months ended January 31, 2018 and 2017, respectively.
( 3 )	Cash paid f or 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)	2018		2017
Other interest expensed	$	29,131	$	22,627
Interest paid by our mortgage and finance subsidiaries		601		629
Decrease in accrued interest		26,750		763
Cash paid for interest, net of capitalized interest	$	56,482	$	24,019

( 4 ) Capitalized interest amounts are shown gross before allocating any portion of impairments, if any, to capitalized interest.