6.  Inventory



Our VOI inventory consists of the following (in thousands):







In December 2018, we increased the average selling price of our VOIs by 3%, in June 2017, we increased the average selling price of our VOIs by 4% and in September 2016, we increased the selling price of our VOIs by 5%. As a result of these pricing changes, we also increased our estimate of total gross margin generated on the sale of our VOI inventory. Under the relative sales value method prescribed for timeshare developers to relieve the cost of VOI inventory, changes to the estimate of gross margin expected to be generated on the sale of VOI inventory are recognized on a retrospective basis in earnings. Accordingly, during 2018, 2017 and 2016, we recognized a benefit to cost of VOIs sold of $3.6 million ($2.7 million net of tax,  $0.04 EPS),  $5.1 million ($3.1 million net of tax,  $0.04 EPS) and $5.6 million ($3.4 million net of tax, $0.05 EPS), respectively. 



The interest expense reflected in our consolidated statements of income and comprehensive income is net of capitalized interest. Interest capitalized to VOI inventory was $1.3 million, $1.1 million and $0.4 million at December 31, 2018, 2017, and 2016, respectively.