Fair Value Disclosures

6 Months Ended

Apr. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Fair Value Disclosures

The table below provides, as of the date indicated, a summary of assets (liabilities) related to the Company’s financial instruments, measured at fair value on a recurring basis (amounts in thousands).

		Fair value
Financial Instrument	Fair value hierarchy	April 30, 2012			October 31, 2011
Corporate Securities	Level 1	$	130,420		$	233,572
Certificates of Deposit	Level 1	$	58,000
Short-Term Tax-Exempt Bond Fund	Level 1	$	30,014
Residential Mortgage Loans Held for Sale	Level 2	$	50,527		$	63,175
Forward Loan Commitments—Residential Mortgage Loans Held for Sale	Level 2	$	(185	)	$	218
Interest Rate Lock Commitments (“IRLCs”)	Level 2	$	246		$	(147	)
Forward Loan Commitments—IRLCs	Level 2	$	(246	)	$	147

At April 30, 2012 and October 31, 2011, the carrying value of cash and cash equivalents and restricted cash approximated fair value.

At the end of the reporting period, the Company determines the fair value of its mortgage loans held for sale and the forward loan commitments it has entered into as a hedge against the interest rate risk of its mortgage loans using the market approach to determine fair value. The evaluation is based on the current market pricing of mortgage loans with similar terms and values as of the reporting date and by applying such pricing to the mortgage loan portfolio. The Company recognizes the difference between the fair value and the unpaid principal balance of mortgage loans held for sale as a gain or loss. In addition, the Company recognizes the fair value of its forward loan commitments as a gain or loss. These gains and losses are included in other income - net. Interest income on mortgage loans held for sale is calculated based upon the stated interest rate of each loan and is included in other income - net.

The table below provides, as of the date indicated, the aggregate unpaid principal and fair value of mortgage loans held for sale as of the date indicated (amounts in thousands).

	Aggregate unpaid principal balance		Fair value		Excess
At April 30, 2012	$	49,918	$	50,527	$	609
At October 31, 2011	$	62,765	$	63,175	$	410

IRLCs represent individual borrower agreements that commit the Company to lend at a specified price for a specified period as long as there is no violation of any condition established in the commitment contract. These commitments have varying degrees of interest rate risk. The Company utilizes best-efforts forward loan commitments (“Forward Commitments”) to hedge the interest rate risk of the IRLCs and residential mortgage loans held for sale. Forward Commitments represent contracts with third-party investors for the future delivery of loans whereby the Company agrees to make delivery at a specified future date at a specified price. The IRLCs and Forward Commitments are considered derivative financial instruments under ASC 815, “Derivatives and Hedging”, which requires derivative financial instruments to be recorded at fair value. The Company estimates the fair value of such commitments based on the estimated fair value of the underlying mortgage loan and, in the case of IRLCs, the probability that the mortgage loan will fund within the terms of the IRLC. To manage the risk of non-performance of investors regarding the Forward Commitments, the Company assesses the credit worthiness of the investors on a periodic basis.

The table below provides, as of the date indicated, the amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of marketable securities (amounts in thousands).

	April 30, 2012			October 31, 2011
Amortized cost	$	218,558		$	233,852
Gross unrealized holding gains	14			28
Gross unrealized holding losses	(138		)	(308		)
Fair value	$	218,434		$	233,572

The remaining contractual maturities of marketable securities as of April 30, 2012 ranged from 2 months to 15 months.

The Company recognizes inventory impairment charges based on the difference in the carrying value of the inventory and its fair value at the time of the evaluation. The fair value of the aforementioned inventory was determined using Level 3 criteria. See Note 1, “Significant Accounting Policies, Inventory” for additional information regarding the Company’s methodology on determining fair value. As further discussed in Note 1, determining the fair value of a community's inventory involves a number of variables, many of which are interrelated. If the Company used a different input for any of the various unobservable inputs used in its impairment analysis, the results of the analysis may have been different, absent any other changes. The table below summarizes, for the periods indicated, the ranges of certain quantitative unobservable inputs utilized in determining the fair value of impaired communities.

	Selling price (in thousands)	Sales pace per year (in units)	Discount rate
Three months ended April 30, 2012	$413 - $472	6 - 17	17.5%
Three months ended January 31, 2012	$344 - $2,287	1 - 25	13.0% - 18.8%

The table below provides, for the periods indicated, the fair value of inventory whose carrying value was adjusted and the amount of impairment charges recognized (amounts in thousands).

	Fair value of inventory, net of impairment		Impairment charges recognized
Three months ended:
Fiscal 2012
January 31	$	49,758	$	6,425
April 30	$	22,962	2,560
			$	8,985
Fiscal 2011
January 31	$	56,105	$	5,475
April 30	$	40,765	10,725
			$	16,200

Gibraltar’s portfolio of non-performing loans was recorded at fair value at inception based on the acquisition price as determined by Level 3 inputs. The estimated fair value was determined using Level 3 inputs and was based on the estimated discounted future cash flows to be generated by the loans discounted at the rates used to value the portfolios at the acquisition dates. The table below provides, as of the date indicated, the carrying amount and estimated fair value of the non-performing loan portfolios (amounts in thousands).

	April 30, 2012		October 31, 2011
Carrying amount	$	77,762	$	63,234
Estimated fair value	$	78,371	$	64,539

The table below provides, as of the date indicated, the book value and estimated fair value of the Company’s debt (amounts in thousands).

		April 30, 2012				October 31, 2011
	Fair value hierarchy	Book value		Estimated fair value		Book value		Estimated fair value
Loans payable (a)	Level 2	$	103,880	$	99,460	$	106,556	$	98,950
Senior notes (b)	Level 1	1,801,688		1,956,747		1,499,371		1,614,010
Mortgage company warehouse loan (c)	Level 2	45,397		45,397		57,409		57,409
		$	1,950,965	$	2,101,604	$	1,663,336	$	1,770,369

(a) The estimated fair value of loans payable was based upon their indicated market prices or the interest rates that the Company believed were available to it for loans with similar terms and remaining maturities as of the applicable valuation date.

(b) The estimated fair value of the Company’s senior notes is based upon their indicated market prices.

(c) The Company believes that the carrying value of its mortgage company loan borrowings approximates their fair value.