Capitalized Interest

6 Months Ended

Mar. 31, 2015

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 periods in which the Company’s active inventory is lower than its debt level, a portion of the interest incurred is immediately reflected as interest expense. Since the third quarter of fiscal 2013, the Company's active inventory has exceeded its debt level, and all interest incurred has been capitalized to inventory.

The following table summarizes the Company’s interest costs incurred, capitalized and expensed during the three and six months ended March 31, 2015 and 2014:

	Three Months Ended   March 31,						Six Months Ended   March 31,
	2015			2014			2015			2014
	(In millions)
Capitalized interest, beginning of period	$	205.2		$	161.1		$	198.5		$	137.1
Interest incurred (1)	42.6			49.5			83.0			98.8
Interest expensed:
Charged to cost of sales	(35.6		)	(26.9		)	(69.2		)	(52.2		)
Written off with inventory impairments	—			—			(0.1		)	—
Capitalized interest, end of period	$	212.2		$	183.7		$	212.2		$	183.7

_______________

(1) Interest incurred includes interest incurred on the Company's financial services mortgage repurchase facility of $1.6 million and $3.1 million in the three and six months ended March 31, 2015, respectively, and $0.9 million and $1.8 million in the same periods of 2014.

Rollforward of capitalized interest

The following table summarizes the Company’s interest costs incurred, capitalized and expensed during the three and six months ended March 31, 2015 and 2014:

	Three Months Ended   March 31,						Six Months Ended   March 31,
	2015			2014			2015			2014
	(In millions)
Capitalized interest, beginning of period	$	205.2		$	161.1		$	198.5		$	137.1
Interest incurred (1)	42.6			49.5			83.0			98.8
Interest expensed:
Charged to cost of sales	(35.6		)	(26.9		)	(69.2		)	(52.2		)
Written off with inventory impairments	—			—			(0.1		)	—
Capitalized interest, end of period	$	212.2		$	183.7		$	212.2		$	183.7

_______________

(1) Interest incurred includes interest incurred on the Company's financial services mortgage repurchase facility of $1.6 million and $3.1 million in the three and six months ended March 31, 2015, respectively, and $0.9 million and $1.8 million in the same periods of 2014.