Inventories

Inventories consisted of the following (in thousands):



	November 30,
	2013		2012
Homes under construction	$	586,439	$	454,108
Land under development	1,066,916		567,470
Land held for future development	645,222		684,993
Total	$	2,298,577	$	1,706,571

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, which include capitalized interest and real estate taxes associated with land undergoing improvement activity. When home construction begins, the associated land acquisition and land development costs are included in homes under construction. 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 by delaying improvements for a period of time to allow earlier phases of a long-term, multi-phase community or a neighboring community to generate sales momentum or for market conditions to improve. We resume development activity when we believe our investment in this inventory will be optimized or, in some instances, to accelerate sales pace and/or our return on investment, and we have activated assets previously held for future development in certain markets as part of our strategic growth initiatives. Interest and real estate taxes are not capitalized on land held for future development.

Our interest costs are as follows (in thousands):



	Years Ended November 30,
	2013			2012			2011
Capitalized interest at beginning of year	$	217,684		$	233,461		$	249,966
Interest incurred (a)	149,101			132,657			112,037
Interest expensed (a)	(62,690		)	(69,804		)	(49,204		)
Interest amortized to construction and land costs	(87,414		)	(78,630		)	(79,338		)
Capitalized interest at end of year (b)	$	216,681		$	217,684		$	233,461


(a)	Amounts for the years ended November 30, 2013 and 2012 included losses on the early extinguishment of debt of $10.4 million and $10.3 million, respectively. Amounts for the year ended November 30, 2011 included a gain on the early extinguishment of secured debt of $3.6 million.


(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.