Fair Value Disclosures (Tables)

9 Months Ended

Jul. 31, 2019

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Summary of assets and (liabilities), measured at fair value on a recurring basis

The table below provides, as of the dates indicated, a summary of assets/(liabilities) related to our financial instruments, measured at fair value on a recurring basis (amounts in thousands):

		Fair value
Financial Instrument	Fair value hierarchy	July 31, 2019			October 31, 2018
Mortgage Loans Held for Sale	Level 2	$	169,251		$	170,731
Forward Loan Commitments — Mortgage Loans Held for Sale	Level 2	$	53		$	1,750
Interest Rate Lock Commitments (“IRLCs”)	Level 2	$	129		$	(4,366	)
Forward Loan Commitments — IRLCs	Level 2	$	(129	)	$	4,366

Aggregate unpaid principal and fair value of mortgage loans held for sale

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

	Aggregate unpaid principal balance		Fair value		Excess
At July 31, 2019	$	167,015	$	169,251	$	2,236
At October 31, 2018	$	170,728	$	170,731	$	3

Fair value of inventory adjusted for impairment

The table below provides, for the periods indicated, the number of operating communities that we reviewed for potential impairment, the number of operating communities in which we recognized impairment charges, the amount of impairment charges recognized, and, as of the end of the period indicated, the fair value of those communities, net of impairment charges ($ amounts in thousands):

		Impaired operating communities
Three months ended:	Number of communities tested	Number of communities	Fair value of communities, net of impairment charges		Impairment charges recognized
Fiscal 2019:
January 31 (1)	49	5	$	37,282	$	5,785
April 30 (2)	64	6	$	36,159	17,495
July 31	69	3	$	5,436	1,100
					$	24,380
Fiscal 2018:
January 31	64	5	$	13,318	$	3,736
April 30 (2)	65	4	$	21,811	13,325
July 31 (3)	55	5	$	43,063	9,065
October 31	43	6	$	24,692	4,025
					$	30,151

(1) Includes impairments of $2.8 million (one community), $1.5 million (three communities), and $1.5 million (one community) located in our City Living, North, and South segments, respectively.

(2) Includes impairments of $2.0 million (one community), $7.0 million (two communities), $8.0 million (two communities), and $0.5 million (one community) located in our City Living, North, Mid-Atlantic, and South segments, respectively, in our fiscal 2019 period. Includes $12.0 million of impairments from one community located in our North segment in our fiscal 2018 period.

(3)

Includes $7.3 million of impairments from two communities located in our Mid-Atlantic segment.

Book value and estimated fair value of the Company's debt

The table below provides, as of the dates indicated, the book value and estimated fair value of our debt (amounts in thousands):

		July 31, 2019				October 31, 2018
	Fair value hierarchy	Book value		Estimated fair value		Book value		Estimated fair value
Loans payable (1)	Level 2	$	1,091,884	$	1,088,316	$	688,115	$	687,974
Senior notes (2)	Level 1	2,519,876		2,633,961		2,869,876		2,779,270
Mortgage company loan facility (3)	Level 2	150,000		150,000		150,000		150,000
		$	3,761,760	$	3,872,277	$	3,707,991	$	3,617,244

(1) The estimated fair value of loans payable was based upon contractual cash flows discounted at interest rates that we believed were available to us for loans with similar terms and remaining maturities as of the applicable valuation date.

(2) The estimated fair value of our senior notes is based upon their market prices as of the applicable valuation date.

(3)

We believe that the carrying value of our mortgage company loan borrowings approximates their fair value.

Operating communities [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]

The table below summarizes, for the periods indicated, the ranges of certain quantitative unobservable inputs utilized in determining the fair value of impaired operating communities:

Three months ended:	Selling price per unit ($ in thousands)	Sales pace per year (in units)	Discount rate
Fiscal 2019:
January 31	836 - 13,495	2 - 12	12.5% - 15.8%
April 30	372 - 1,915	2 - 19	12.0% - 26.0%
July 31	530 - 1,113	2 - 9	7.8% - 13%
Fiscal 2018:
January 31	381 - 1,029	7 - 10	13.8% - 19.0%
April 30	485 - 522	10 - 16	16.9%
July 31 (1)	–	–	–
October 31	470 - 1071	4 - 23	13.5% - 16.3%

(1)

The impairment charges recognized were related to our decisions to sell lots in a bulk sale in certain communities rather than sell and construct homes as previously intended. The sale price per lot used in the fair value determination for these bulk sales ranged from $10,000 to $155,000.