Inventories

Inventories consisted of the following (in thousands):



	November 30,
	2012		2011
Homes under construction	$	454,108	$	417,304
Land under development	567,470		572,660
Land held for future development	684,993		741,665
Total	$	1,706,571	$	1,731,629

Homes under construction is comprised of costs associated with homes in various stages of construction and includes direct construction and related land acquisition and land development costs. Land under development primarily consists of land acquisition and land development costs, capitalized interest and real estate taxes associated with land undergoing improvement activity. Land held for future development principally reflects land acquisition and land development costs related to land where development activity has been suspended or has not yet begun, but is expected to occur in the future. These assets held for future development are located in various submarkets where conditions do not presently support further investment or development, or are subject to a building permit moratorium or regulatory restrictions, or are portions of larger land parcels that we plan to build out over several years and/or that have not yet been entitled. We may also suspend development activity if we believe it will result in greater returns and/or maximize the economic performance of a community.

Interest is capitalized to inventories while the related communities are being actively developed and until homes are completed. Capitalized interest is amortized in construction and land costs as the related inventories are delivered to homebuyers. For those communities where development activity has been suspended, applicable interest is expensed as incurred. Our interest costs are as follows (in thousands):



	Years Ended November 30,
	2012			2011			2010
Capitalized interest at beginning of year	$	233,461		$	249,966		$	291,279
Capitalized interest related to consolidation of previously unconsolidated joint ventures	—			—			9,914
Interest incurred (a)	132,657			112,037			122,230
Interest expensed (a)	(69,804		)	(49,204		)	(68,307		)
Interest amortized to construction and land costs	(78,630		)	(79,338		)	(105,150		)
Capitalized interest at end of year (b)	$	217,684		$	233,461		$	249,966

(a)

Amounts for the year ended November 30, 2012 include a $10.3 million loss on the early extinguishment of debt. Amounts for the year ended November 30, 2011 include a $3.6 million gain on the early extinguishment of secured debt. Amounts for the year ended November 30, 2010 include a total of $1.8 million of debt issuance costs written off in connection with our voluntary reduction of the aggregate commitment under the Credit Facility from $650.0 million to $200.0 million and the voluntary termination of the Credit Facility effective March 31, 2010.


(b)	Inventory impairment charges are recognized against all inventory costs of a community, such as land acquisition, land development, cost of home construction and capitalized interest. Capitalized interest amounts presented in the table reflect the gross amount of capitalized interest as impairment charges recognized are not generally allocated to specific components of inventory.