Note 3 - Interest

3 Months Ended

Jan. 31, 2022

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)	2022		2021
Interest capitalized at beginning of period	$	58,159	$	65,010
Plus interest incurred(1)		32,783		41,457
Less cost of sales interest expensed		13,745		17,165
Less other interest expensed(2)(3)		13,393		23,975
Interest capitalized at end of period(4)	$	63,804	$	65,327

(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 $11.5 million and $16.2 million for the three months ended January 31, 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 $1.9 million and $7.8 million for the three months ended January 31, 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
	January 31,
(In thousands)	2022			2021
Other interest expensed	$	13,393		$	23,975
Interest paid by our mortgage and finance subsidiaries		468			425
Increase in accrued interest		(19,115	)		(14,478	)
Cash paid for interest, net of capitalized interest	$	(5,254	)	$	9,922

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