Accrued Expenses

3 Months Ended

Jan. 31, 2023

Accrued expenses at January 31, 2023 and October 31, 2022 consisted of the following (amounts in thousands):


	January 31, 2023		October 31, 2022
Land, land development, and construction	$	352,549	$	334,975
Compensation and employee benefits	147,807		223,609
Escrow liability associated with our wholly owned captive title company	40,965		44,115
Self-insurance	251,529		251,576
Warranty	156,895		164,409
Lease liabilities	143,714		139,664
Deferred income	46,540		50,973
Interest	34,654		31,988
Commitments to unconsolidated entities	28,276		26,905

Other	47,617		77,773
	$	1,250,546	$	1,345,987

The table below provides, for the periods indicated, a reconciliation of the changes in our warranty accrual (amounts in thousands):


	Three months ended January 31,
		2023		2022
Balance, beginning of period		$	164,409	$	145,062
Additions – homes closed during the period		7,186		9,455

Change in accruals for homes closed in prior years – net		2,096		2,957

Charges incurred		(16,796)		(14,431)
Balance, end of period		$	156,895	$	143,043

Since fiscal 2014, we have received water intrusion claims from owners of homes built since 2002 in communities located in Pennsylvania and Delaware. Our recorded estimated repair costs to resolve these claims were approximately $45.6 million at January 31, 2023 and $46.9 million at October 31, 2022, and are included in the Warranty accrued expense above. We continue

to perform review procedures to assess, among other things, the number of affected homes, whether repairs are likely to be required, and the extent of such repairs.

Our review process, conducted quarterly, includes an analysis of many factors to determine whether a claim is likely to be received and the estimated costs to resolve any such claim, including: the closing dates of the homes; the number of claims received; our inspection of homes; an estimate of the number of homes we expect to repair; the type and cost of repairs that have been performed in each community; the estimated costs to remediate pending and future claims; the expected recovery from our insurance carriers and suppliers; and the previously recorded amounts related to these claims. We also monitor legal developments relating to these types of claims and review the volume, relative merits and adjudication of claims in litigation or arbitration. Our review process includes a number of estimates that are based on assumptions with uncertain outcomes. Due to the degree of judgment required in making these estimates and the inherent uncertainty in potential outcomes, it is reasonably possible that our actual costs and recoveries could differ from those recorded and such differences could be material. In addition, due to such uncertainty, we are unable to estimate the range of any such differences.