We had 416 and 482 communities under development and held for future development or sale at April 30, 2026 and 2025, respectively, which we evaluated for impairment indicators (i.e., those with a projected operating loss). We performed undiscounted future cash flow analyses during the three and six months ended April 30, 2026 for six communities, with an aggregate carrying value of $32.5 million. As a result of our analyses, we identified impairment indicators in four of those communities in our Southeast and West segments, with an aggregate carrying value of $21.7 million during both the three and six months ended April 30, 2026. The impairment analyses resulted in an impairment of $5.3 million, included within "Inventory impairments and land option write-offs" in the Condensed Consolidated Statement of Operations and deducted from inventory. We identified impairment indicators in one community in our Northeast segment with an aggregate carrying value of $5.4 million during both the three and six months ended April 30, 2025. The impairment analysis resulted in an impairment of $1.2 million during the period, included within "Inventory impairments and land option write-offs" in the Condensed Consolidated Statement of Operations and deducted from inventory.

Write-offs of options, engineering and capitalized interest costs are recorded in "Inventory impairments and land option write-offs" when we redesign communities, abandon certain engineering costs or do not exercise options in various locations because the pro forma profitability is not projected to produce adequate returns on investment commensurate with the risk. Total aggregate write-offs related to these items were $3.4 million and $1.9 million for the three months ended April 30, 2026 and 2025, respectively, and $5.8 million and $2.9 million for the six months ended April 30, 2026 and 2025, respectively. The number of lots walked away from during the three months ended April 30, 2026 and 2025 were 2,015 and 2,463, respectively, and 2,750 and 4,897 during the six months ended April 30, 2026 and 2025, respectively. The walk-aways during the first half of fiscal 2026 and 2025 occurred across each of our reportable segments.

We sell and lease back certain of our model homes with the right to participate in the potential profit when each home is sold to a third-party at the end of the respective lease. As a result of our continued involvement and the ability to repurchase model homes with below market options, for accounting purposes in accordance with ASC 606, these sale and leaseback transactions are considered a financing rather than a sale. Our Condensed Consolidated Balance Sheets as of April 30, 2026 and October 31, 2025, included inventory of $73.0 million and $74.3 million, respectively, recorded to “Consolidated inventory not owned” with a corresponding amount of $73.2 million and $75.6 million (net of debt issuance costs), respectively, recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions.

We have land banking arrangements, whereby we sell our land parcels to a land banker and they provide us an option to purchase back finished lots on a predetermined schedule. Because of our options to repurchase these parcels, for accounting purposes in accordance with ASC 606, these transactions are considered a financing rather than a sale. Our Condensed Consolidated Balance Sheets as of April 30, 2026 and October 31, 2025, included inventory of $296.1 million and $258.6 million, respectively, recorded to “Consolidated inventory not owned” with a corresponding amount of $180.2 million and $169.1 million (net of debt issuance costs), respectively, recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions.