Mortgages and Notes Payable

Mortgages and notes payable consisted of the following (in thousands):



	November 30,
	2012		2011
Mortgages and land contracts due to land sellers and other loans (6% to 7% at November 30, 2012 and 2011)	$	52,311	$	24,984
Senior notes due February 1, 2014 at 5 3/4%	75,911		249,647
Senior notes due January 15, 2015 at 5 7/8%	101,999		299,273
Senior notes due June 15, 2015 at 6 1/4%	236,826		449,795
Senior notes due September 15, 2017 at 9.10%	261,430		260,865
Senior notes due June 15, 2018 at 7 1/4%	299,129		299,007
Senior notes due March 15, 2020 at 8.00%	345,209		—
Senior notes due September 15, 2022 at 7.50%	350,000		—
Total	$	1,722,815	$	1,583,571

Letter of Credit Facilities. We maintain our LOC Facilities with various financial institutions to obtain letters of credit in the ordinary course of operating our business. As of November 30, 2012 and 2011, $41.9 million and $63.8 million, respectively, of letters of credit were outstanding under our LOC Facilities. Our LOC Facilities require us to deposit and maintain cash with the issuing financial institutions as collateral for our letters of credit outstanding. As of November 30, 2012 and 2011, the amount of cash maintained for our LOC Facilities totaled $42.4 million and $64.5 million, respectively, and was included in restricted cash on our consolidated balance sheets as of those dates. We may maintain, revise or, if necessary or desirable, enter into additional or expanded letter of credit facilities, or enter into a revolving credit facility, with the same or other financial institutions.

Mortgages and Land Contracts Due to Land Sellers and Other Loans. During 2011, we repaid debt that was secured by a multi-level residential building we operated as a rental property, which we sold during that year. As the secured debt was repaid at a discount prior to its scheduled maturity, we recognized a gain of $3.6 million on the early extinguishment of secured debt. Inventories having a carrying value of $94.1 million as of November 30, 2012 are pledged to collateralize mortgages and land contracts due to land sellers and other loans.

Shelf Registration. On September 20, 2011, we filed the 2011 Shelf Registration with the SEC, registering debt and equity securities that we may issue from time to time in amounts to be determined. The 2011 Shelf Registration replaced our previously effective shelf registration statement filed with the SEC on October 17, 2008 (the “2008 Shelf Registration”).

Senior Notes. All of our senior notes outstanding at November 30, 2012 and 2011 represent senior unsecured obligations, rank equally in right of payment with all of our existing and future indebtedness and are unconditionally guaranteed jointly and severally by the Guarantor Subsidiaries on a senior unsecured basis. At our option, these notes may be redeemed, in whole at any time or from time to time in part, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed discounted to the redemption date at a defined rate, plus, in each case, accrued and unpaid interest on the notes being redeemed to the applicable redemption date.

On June 30, 2004, we issued the $350 Million 6 3/8% Senior Notes at 99.3% of the principal amount of the notes in a private placement. On December 3, 2004, we exchanged all of the privately placed $350 Million 6 3/8% Senior Notes for notes that were substantially identical except that the new $350 Million 6 3/8% Senior Notes were registered under the Securities Act of 1933. On July 30, 2009, we purchased $250.0 million in aggregate principal amount of the $350 Million 6 3/8% Senior Notes pursuant to a tender offer simultaneous with the issuance of the $265 Million 9.10% Senior Notes. On August 15, 2011, we repaid the remaining $100.0 million in aggregate principal amount of the $350 Million 6 3/8% Senior Notes at their maturity.

On January 28, 2004, we issued the $250 Million 5 3/4% Senior Notes at 99.474% of the principal amount of the notes in a private placement. On June 16, 2004, we exchanged all of the privately placed $250 Million 5 3/4% Senior Notes for notes that are substantially identical except that the new $250 Million 5 3/4% Senior Notes are registered under the Securities Act of 1933.

On December 15, 2004, pursuant to the shelf registration statement filed with the SEC on November 12, 2004 (the “2004 Shelf Registration”), we issued the $300 Million 5 7/8% Senior Notes at 99.357% of the principal amount of the notes.

On June 2, 2005, pursuant to the 2004 Shelf Registration, we issued the $450 Million 6 1/4% Senior Notes at 100.614% of the principal amount of the notes.

During 2012, we purchased a portion of each of the $250 Million 5 3/4% Senior Notes, the $300 Million 5 7/8% Senior Notes and the $450 Million 6 1/4% Senior Notes, in each case pursuant to the terms of the applicable January 2012 Tender Offers and the applicable July 2012 Tender Offers, as discussed below.

On July 30, 2009, pursuant to the 2008 Shelf Registration, we issued the $265 Million 9.10% Senior Notes at 98.014% of the principal amount of the notes. We used substantially all of the net proceeds from the issuance of the $265 Million 9.10% Senior Notes to purchase, pursuant to a simultaneous tender offer, $250.0 million in aggregate principal amount of the $350 Million 6 3/8% Senior Notes.

On April 3, 2006, pursuant to the 2004 Shelf Registration, we issued $300.0 million of 7 1/4% senior notes due 2018 at 99.486% of the principal amount of the notes.

On February 7, 2012, pursuant to the 2011 Shelf Registration, we issued the $350 Million 8.00% Senior Notes at 101% of the principal amount of the notes. We used substantially all of the net proceeds from this issuance to purchase, pursuant to the terms of the applicable January 2012 Tender Offers, $56.3 million in aggregate principal amount of the $250 Million 5 3/4% Senior Notes, $130.0 million in aggregate principal amount of the $300 Million 5 7/8% Senior Notes, and $153.7 million in aggregate principal amount of the $450 Million 6 1/4% Senior Notes. The applicable January 2012 Tender Offers expired on February 15, 2012. The total amount paid to purchase these senior notes was $340.5 million. We incurred a loss of $2.0 million in the first quarter of 2012 related to the early redemption of debt due to a premium paid under the applicable January 2012 Tender Offers and the unamortized original issue discount.

On July 31, 2012, pursuant to the 2011 Shelf Registration, we issued the $350 Million 7.50% Senior Notes at 100% of the principal amount of the notes. We used $252.2 million of the net proceeds from this issuance to purchase, pursuant to the terms of the applicable July 2012 Tender Offers, $117.7 million in aggregate principal amount of the $250 Million 5 3/4% Senior Notes, $67.8 million in aggregate principal amount of the $300 Million 5 7/8% Senior Notes, and $59.4 million in aggregate principal amount of the $450 Million 6 1/4% Senior Notes. The applicable July 2012 Tender Offers expired on August 7, 2012. We used the remaining net proceeds from this issuance for general corporate purposes. We incurred a loss of $8.3 million in the third quarter of 2012 related to the early redemption of debt due to a premium paid under the applicable July 2012 Tender Offers and the unamortized original issue discount.

If a change in control occurs as defined in the instruments governing each of the $265 Million 9.10% Senior Notes, the $350 Million 8.00% Senior Notes, and the $350 Million 7.50% Senior Notes, we would be required to offer to purchase these notes (but not our other outstanding senior notes) at 101% of their principal amount, together with all accrued and unpaid interest, if any.

The indenture governing our senior notes does not contain any financial maintenance covenants. Subject to specified exceptions, the indenture contains certain restrictive covenants that, among other things, limit our ability to incur secured indebtedness, or engage in sale-leaseback transactions involving property or assets above a certain specified value. Unlike our other senior notes, the terms governing the $265 Million 9.10% Senior Notes, the $350 Million 8.00% Senior Notes, and the $350 Million 7.50% Senior Notes contain certain limitations related to mergers, consolidations, and sales of assets.

As of November 30, 2012, we were in compliance with the applicable terms of all of our covenants under our senior notes, the indenture, and mortgages and land contracts due to land sellers and other loans. Our ability to secure future debt financing may depend in part on our ability to remain in such compliance.

Principal payments on senior notes, mortgages and land contracts due to land sellers and other loans are due as follows: 2013 — $37.9 million; 2014 —$88.8 million; 2015 — $340.4 million; 2016 — $0; 2017 — $261.4 million; and thereafter — $994.3 million.