Note 3 - Interest

6 Months Ended

Apr. 30, 2019

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)	2019	2018	2019	2018
Interest capitalized at beginning of period	$74,455	$70,793	$68,117	$71,051
Plus interest incurred (1)	41,383	40,014	80,236	81,179
Less cost of sales interest expensed	13,898	19,364	24,140	31,656
Less other interest expensed (2)(3)	22,663	26,088	44,936	55,219
Interest capitalized at end of period (4)	$79,277	$65,355	$79,277	$65,355

( 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 $15.1 million and $19.9 million for the three months ended April 30, 2019 and 2018, respectively, and $32.7 million and $39.5 million for the six months ended April 30, 2019 and 2018, 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 $7.6 million and $6.2 million for the three months ended April 30, 2019 and 2018, respectively, and $12.3 million and $15.8 million for the six months ended April 30, 2019 and 2018, 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)	2019		2018		2019		2018
Other interest expensed	$22,663		$26,088		$44,936		$55,219
Interest paid by our mortgage and finance subsidiaries	514		585		1,203		1,186
(Increase) decrease in accrued interest	(19,776	)	(23,448	)	(2,299	)	3,302
Cash paid for interest, net of capitalized interest	$3,401		$3,225		$43,840		$59,707

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