Inventory

Inventory at April 30, 2016 and October 31, 2015 consisted of the following (amounts in thousands):



	April 30, 2016		October 31, 2015
Land controlled for future communities	$	90,781	$	75,214
Land owned for future communities	1,655,339		2,033,447
Operating communities	5,539,231		4,888,855
	$	7,285,351	$	6,997,516

Operating communities include communities offering homes for sale, communities that have sold all available home sites but have not completed delivery of the homes, communities that were previously offering homes for sale but are temporarily closed due to business conditions or nonavailability of improved home sites and that are expected to reopen within 12 months of the end of the fiscal period being reported on, and communities preparing to open for sale. The carrying value attributable to operating communities includes the cost of homes under construction, land and land development costs, the carrying cost of home sites in current and future phases of these communities, and the carrying cost of model homes.

Communities that were previously offering homes for sale but are temporarily closed due to business conditions and that do not have any remaining backlog and are not expected to reopen within 12 months of the end of the fiscal period being reported on have been classified as land owned for future communities. Backlog consists of homes under contract but not yet delivered to our home buyers (“backlog”).

Information regarding the classification, number, and carrying value of these temporarily closed communities, as of the dates indicated, is provided in the table below.



	April 30, 2016		October 31, 2015
Land owned for future communities:
Number of communities	21		15
Carrying value (in thousands)	$	143,033	$	119,138
Operating communities:
Number of communities	5		11
Carrying value (in thousands)	$	27,904	$	63,668

The amounts we have provided for inventory impairment charges and the expensing of costs that we believed not to be recoverable, for the periods indicated, are shown in the table below (amounts in thousands):



	Six months ended April 30,				Three months ended April 30,
	2016		2015		2016		2015
Land controlled for future communities	$	634	$	610	$	253	$	366
Land owned for future communities	300		700				700
Operating communities	6,700		12,000		6,100		11,100
	$	7,634	$	13,310	$	6,353	$	12,166

See Note 11, “Fair Value Disclosures,” for information regarding the number of operating communities that we tested for potential impairment, the number of operating communities in which we recognized impairment charges, the amount of impairment charges recognized, and the fair values of those communities, net of impairment charges.

See Note 13, “Commitments and Contingencies,” for information regarding land purchase commitments.

At April 30, 2016, we evaluated our land purchase contracts to determine whether any of the selling entities were VIEs and, if they were, whether we were the primary beneficiary of any of them. Under these land purchase contracts, we do not possess legal title to the land. Our risk is generally limited to deposits paid to the sellers and predevelopment costs incurred, and the creditors of the sellers generally have no recourse against us. At April 30, 2016, we determined that 67 land purchase contracts, with an aggregate purchase price of $811.3 million, on which we had made aggregate deposits totaling $42.1 million, were VIEs, and that we were not the primary beneficiary of any VIE related to our land purchase contracts. At October 31, 2015, we determined that 61 land purchase contracts, with an aggregate purchase price of $663.6 million, on which we had made aggregate deposits totaling $45.0 million, were VIEs, and that we were not the primary beneficiary of any VIE related to our land purchase contracts.

Interest incurred, capitalized, and expensed, for the periods indicated, was as follows (amounts in thousands):



	Six months ended April 30,						Three months ended April 30,
	2016			2015			2016			2015
Interest capitalized, beginning of period	$	373,128		$	356,180		$	379,930		$	364,228
Interest incurred	80,412			80,458			40,305			39,954
Interest expensed to cost of revenues	(67,745		)	(57,953		)	(35,722		)	(29,576		)
Write-off against other income	(309		)	(1,738		)	(34		)	(410		)
Interest capitalized on investments in unconsolidated entities	(2,243		)	(4,825		)	(1,236		)	(2,074		)
Previously capitalized interest on investments in unconsolidated entities transferred to inventory	239			772			239			772
Interest capitalized, end of period	$	383,482		$	372,894		$	383,482		$	372,894