Commitments and Contingencies

Legal Proceedings

We are involved in various claims and litigation arising principally in the ordinary course of business. We believe that adequate provision for resolution of all current claims and pending litigation has been made for probable losses. We believe that the disposition of these matters will not have a material adverse effect on our results of operations and liquidity or on our financial condition.

In April 2017, the SEC informed the Company that it was conducting an investigation and requested that we voluntarily produce documents and information relating to our estimated repair costs for stucco and other water intrusion claims in fiscal 2016. As previously described in our 2016 Form 10-K, in the fourth quarter of fiscal 2016, our estimated liability for these water intrusion claims increased significantly. The Company will produce documents and information in response to this request. Management cannot at this time predict the eventual scope or outcome of this matter.

Investments in Unconsolidated Entities

At April 30, 2017, we had investments in a number of unconsolidated entities, were committed to invest or advance additional funds, and had guaranteed a portion of the indebtedness and/or loan commitments of these entities. See Note 3, “Investments in Unconsolidated Entities,” for more information regarding our commitments to these entities.

Land Purchase Commitments

Generally, our purchase agreements to acquire land parcels do not require us to purchase those land parcels, although we, in some cases, forfeit any deposit balance outstanding if and when we terminate a purchase agreement. Information regarding our land purchase commitments, as of the dates indicated, is provided in the table below (amounts in thousands):



	April 30, 2017		October 31, 2016
Aggregate purchase commitments:
Unrelated parties	$	1,476,063	$	1,544,185
Unconsolidated entities that the Company has investments in	33,036		79,204
Total	$	1,509,099	$	1,623,389
Deposits against aggregate purchase commitments	$	77,734	$	65,299
Additional cash required to acquire land	1,431,365		1,558,090
Total	$	1,509,099	$	1,623,389
Amount of additional cash required to acquire land included in accrued expenses	$	16,145	$	18,266

In addition, we expect to purchase approximately 3,600 additional home sites over a number of years from several joint ventures in which we have interests; the purchase prices of these home sites will be determined at a future date.

At April 30, 2017, we also had purchase commitments to acquire land for apartment developments of approximately $104.0 million, of which we had outstanding deposits in the amount of $4.7 million.

We have additional land parcels under option that have been excluded from the aforementioned aggregate purchase amounts since we do not believe that we will complete the purchase of these land parcels and no additional funds will be required from us to terminate these contracts.

Surety Bonds and Letters of Credit

At April 30, 2017, we had outstanding surety bonds amounting to $685.5 million, primarily related to our obligations to governmental entities to construct improvements in our communities. We estimate that $347.9 million of work remains on these improvements. We have an additional $138.6 million of surety bonds outstanding that guarantee other obligations. We do not believe that it is probable that any outstanding bonds will be drawn upon.

At April 30, 2017, we had outstanding letters of credit of $120.0 million under our New Credit Facility. These letters of credit were issued to secure our various financial obligations, including insurance policy deductibles and other claims, land deposits, and security to complete improvements in communities in which we are operating. We do not believe that it is probable that any outstanding letters of credit will be drawn upon.

Backlog

At April 30, 2017, we had agreements of sale outstanding to deliver 6,018 homes with an aggregate sales value of $5.00 billion.

Mortgage Commitments

Information regarding our mortgage commitments, as of the dates indicated, is provided in the table below (amounts in thousands):



	April 30, 2017		October 31, 2016
Aggregate mortgage loan commitments:
IRLCs	$	360,056	$	255,647
Non-IRLCs	1,316,381		1,094,861
Total	$	1,676,437	$	1,350,508
Investor commitments to purchase:
IRLCs	$	360,056	$	255,647
Mortgage loans receivable	82,495		231,398
Total	$	442,551	$	487,045