Inventory

9 Months Ended

Jul. 31, 2025

Major components of inventory at July 31, 2025 and October 31, 2024 were (amounts in thousands):


	July 31, 2025		October 31, 2024
Land deposits and costs of future communities	$	866,503	$	620,040
Land and land development costs	2,982,669		2,532,221
Land and land development costs associated with homes under construction	3,828,611		3,617,266
Total land and land development costs	7,677,783		6,769,527

Homes under construction	2,851,445		2,458,541
Model homes (1)	542,321		484,857
	$	11,071,549	$	9,712,925

(1) Includes the allocated land and land development costs associated with each of our model homes in operation.

The following table provides a summary of the composition of our inventory based on community status at July 31, 2025 and October 31, 2024 (amounts in thousands):


	July 31, 2025		October 31, 2024
Land controlled for future communities	$	275,929	$	200,166
Land owned for future communities	422,007		353,030
Operating communities	10,373,613		9,159,729
	$	11,071,549	$	9,712,925

Operating communities include communities offering homes for sale; communities that have sold all available home sites but have not completed delivery of the homes; 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.

Backlog consists of homes under contract but not yet delivered to our home buyers (“backlog”).

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


	Three months ended July 31,				Nine months ended July 31,
	2025		2024		2025		2024
Land controlled for future communities	$	15,815	$	1,759	$	21,446	$	4,518

Operating communities	7,500		3,700		28,085		30,840
	$	23,315	$	5,459	$	49,531	$	35,358

We recognized $0.7 million and $2.6 million of impairment charges on land held for sale included in land sales and other cost of revenues during the three-month and nine-month periods ended July 31, 2025, respectively. We recognized $3.8 million and $4.4 million of similar impairment charges during the three-month and nine-month periods ended July 31, 2024, respectively.

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

At July 31, 2025, we evaluated our land purchase contracts, including those to acquire land for apartment developments, to determine whether any of the selling entities were variable interest entities (“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 maximum exposure to loss 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 July 31, 2025, we determined that 335 land purchase contracts, with an aggregate purchase price of $7.07 billion, on which we had made aggregate deposits totaling $755.4 million, were VIEs, and that we were not the primary beneficiary of any VIE related to our land purchase contracts. At October 31, 2024, we determined that 297 land purchase contracts, with an aggregate purchase price of $5.59 billion, on which we had made aggregate deposits totaling $522.1 million, were VIEs and that we were not the primary beneficiary of any VIE related to our land purchase

contracts. However, at July 31, 2025 and October 31, 2024, certain contracts were accrued as we concluded we were economically compelled to purchase the land. See Note 6, “Accrued Expenses,” for information regarding liabilities related to consolidated inventory not owned.

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


	Three months ended July 31,				Nine months ended July 31,
	2025		2024		2025		2024
Interest capitalized, beginning of period	$	196,023	$	193,478	$	179,797	$	190,550
Interest incurred	31,379		33,579		101,235		100,018
Interest expensed to home sales cost of revenues	(30,163)		(32,803)		(80,550)		(91,121)
Interest expensed to land sales and other cost of revenues	(1,712)		(802)		(2,351)		(1,821)


Interest capitalized on investments in unconsolidated entities	(1,369)		(2,027)		(4,653)		(6,734)

Previously capitalized interest on investments in unconsolidated entities transferred to inventory	649		296		1,329		829
Interest capitalized, end of period	$	194,807	$	191,721	$	194,807	$	191,721