Capitalized Interest

3 Months Ended

Dec. 31, 2013

Interest Costs Incurred [Abstract]

Capitalized Interest [Text Block]

CAPITALIZED INTEREST

The Company capitalizes interest costs incurred to inventory during active development and construction (active inventory). Capitalized interest is charged to cost of sales as the related inventory is delivered to the buyer. During much of the last few years, the Company’s active inventory was lower than its debt level and therefore, a portion of the interest incurred was reflected as interest expense. However, since the third quarter of fiscal 2013, the Company's active inventory has exceeded its debt level and all interest incurred during those periods was capitalized to inventory.

The following table summarizes the Company’s interest costs incurred, capitalized, expensed as interest expense and charged to cost of sales during the three months ended December 31, 2013 and 2012:

	Three Months Ended December 31,
	2013			2012
	(In millions)
Capitalized interest, beginning of period	$	137.1		$	82.3
Interest incurred (1)	49.3			38.1
Interest expensed:
Directly to interest expense	—			(4.2		)
Amortized to cost of sales	(25.3		)	(24.9		)
Capitalized interest, end of period	$	161.1		$	91.3

_______________

(1) Interest incurred includes interest incurred on the Company's financial services mortgage repurchase facility of $0.9 million and $1.0 million in the three months ended December 31, 2013 and 2012, respectively.

Rollforward of capitalized interest

The following table summarizes the Company’s interest costs incurred, capitalized, expensed as interest expense and charged to cost of sales during the three months ended December 31, 2013 and 2012:

	Three Months Ended December 31,
	2013			2012
	(In millions)
Capitalized interest, beginning of period	$	137.1		$	82.3
Interest incurred (1)	49.3			38.1
Interest expensed:
Directly to interest expense	—			(4.2		)
Amortized to cost of sales	(25.3		)	(24.9		)
Capitalized interest, end of period	$	161.1		$	91.3

_______________

(1) Interest incurred includes interest incurred on the Company's financial services mortgage repurchase facility of $0.9 million and $1.0 million in the three months ended December 31, 2013 and 2012, respectively.