Inventory And Land Held For Sale

6 Months Ended

Jun. 30, 2014

Inventory and land held for sale

Major components of inventory were as follows ($000’s omitted):



	June 30, 2014		December 31, 2013
Homes under construction	$	1,308,724	$	1,042,147
Land under development	2,113,885		2,189,387
Raw land	774,512		747,027
	$	4,197,121	$	3,978,561

We capitalize interest cost into inventory during the active development and construction of our communities. Each layer of capitalized interest is amortized over a period that approximates the average life of communities under development. Interest expense is recorded based on the timing of home closings. In all periods presented, we capitalized all Homebuilding interest costs into inventory because the level of our active inventory exceeded our debt levels.

Information related to interest capitalized into inventory is as follows ($000’s omitted):



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Interest in inventory, beginning of period	$	225,619		$	320,859		$	230,922		$	331,880
Interest capitalized	31,455			39,909			66,768			82,565
Interest expensed	(46,471		)	(62,193		)	(87,087		)	(115,870		)
Interest in inventory, end of period	$	210,603		$	298,575		$	210,603		$	298,575
Interest incurred (a)	$	31,455		$	39,909		$	66,768		$	82,565


(a)	Homebuilding interest incurred includes interest on senior debt and certain other financing arrangements.

Land impairments

We record land impairment valuation adjustments to our communities within Homebuilding home sale cost of revenues. Our evaluations for impairments are based on our best estimates of the future cash flows of our communities. However, if conditions in our local markets worsen in the future or if our strategy related to certain communities changes, we may be required to evaluate our assets for further impairments or write-downs. There were no significant impairments during the three and six months ended June 30, 2014 or 2013.

Land held for sale

We periodically elect to sell parcels of land to third parties in the event such assets no longer fit into our strategic

operating plans or are zoned for commercial or other development.

Land held for sale was as follows ($000’s omitted):



	June 30, 2014			December 31, 2013
Land held for sale, gross	$	88,221		$	70,003
Net realizable value reserves	(7,893		)	(8,268		)
Land held for sale, net	$	80,328		$	61,735

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

+ References+ Details