Commitments and Contingencies

Land Purchase Commitments

Generally, the Company’s option and purchase agreements to acquire land parcels do not require the Company to purchase those land parcels, although the Company may, in some cases, forfeit any deposit balance outstanding if and when it terminates an option and purchase agreement. If market conditions are weak, approvals needed to develop the land are uncertain or other factors exist that make the purchase undesirable, the Company may not expect to acquire the land. Whether an option and purchase agreement is legally terminated or not, the Company reviews the amount recorded for the land parcel subject to the option and purchase agreement to determine if the amount is recoverable. While the Company may not have formally terminated the option and purchase agreements for those land parcels that it does not expect to acquire, it has written off any non-refundable deposits and costs previously capitalized to such land parcels in the periods that it determined such costs were not recoverable.

Information regarding the Company’s land purchase commitments at October 31, 2013 and 2012 is provided in the table below (amounts in thousands).



	2013		2012
Aggregate purchase commitments:
Unrelated parties	$	1,301,987	$	742,918
Unconsolidated entities that the Company has investments in	61,738		4,067
Total	$	1,363,725	$	746,985
Deposits against aggregate purchase commitments	$	76,986	$	42,921
Additional cash required to acquire land	1,286,739		704,064
Total	$	1,363,725	$	746,985
Amount of additional cash required to acquire land included in accrued expenses	$	1,439	$	4,328

In addition, the Company expects to purchase approximately 545 additional home sites from a joint venture in which it has a 50% interest. The purchase price of the home sites will be determined at a future date.

At October 31, 2013, the Company had purchase commitments to acquire land for apartment developments of approximately $56.0 million, of which it had outstanding deposits in the amount of $2.5 million. At October 31, 2013, the Company also had a purchase commitment to acquire a parcel of land for approximately $79.3 million which it intends to develop with a joint venture partner; the Company expects to purchase up to 1,750 home sites from the joint venture and the joint venture expects to sell the remaining home sites to outside builders. In December 2013, the joint venture was formed and the joint venture acquired the land. In November 2013, the Company entered into an agreement to acquire Shapell for $1.60 billion. See Note 1 - "Significant Accounting Policies - Subsequent Events" for more information on the Shapell acquisition.

The Company has additional land parcels under option that have been excluded from the aforementioned aggregate purchase amounts since it does not believe that it will complete the purchase of these land parcels and no additional funds will be required from the Company to terminate these contracts.

Legal Proceedings

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

Investments in and Advances to Unconsolidated Entities

At October 31, 2013, the Company had investments in and advances to a number of unconsolidated entities, was committed to invest or advance additional funds and had guaranteed a portion of the indebtedness and/or loan commitments of these entities. See Note 4, “Investments in and Advances to Unconsolidated Entities,” for more information regarding the Company’s commitments to these entities.

Surety Bonds and Letters of Credit

At October 31, 2013, the Company had outstanding surety bonds amounting to $409.6 million, primarily related to its obligations to various governmental entities to construct improvements in the Company’s various communities. The Company estimates that $290.9 million of work remains on these improvements. The Company has an additional $62.2 million of surety bonds outstanding that guarantee other obligations of the Company. The Company does not believe it is probable that any outstanding bonds will be drawn upon.

At October 31, 2013, the Company had outstanding letters of credit of $89.3 million, including $76.6 million under its Credit Facility and $12.7 million collateralized by restricted cash. These letters of credit were issued to secure various financial obligations of the Company including insurance policy deductibles and other claims, land deposits and security to complete improvements in communities in which it is operating. The Company believes it is not probable that any outstanding letters of credit will be drawn upon.

Backlog

At October 31, 2013, the Company had agreements of sale outstanding to deliver 3,679 homes with an aggregate sales value of $2.63 billion.

Mortgage Commitments

The Company’s mortgage subsidiary provides mortgage financing for a portion of the Company’s home closings. For those home buyers to whom the Company’s mortgage subsidiary provides mortgages, it determines whether the home buyer qualifies for the mortgage he or she is seeking based upon information provided by the home buyer and other sources. For those home buyers who qualify, the Company’s mortgage subsidiary provides the home buyer with a mortgage commitment that specifies the terms and conditions of a proposed mortgage loan based upon then-current market conditions. Prior to the actual closing of the home and funding of the mortgage, the home buyer will lock in an interest rate based upon the terms of the commitment. At the time of rate lock, the Company’s mortgage subsidiary agrees to sell the proposed mortgage loan to one of several outside recognized mortgage financing institutions (“investors”) that are willing to honor the terms and conditions, including interest rate, committed to the home buyer. The Company believes that these investors have adequate financial resources to honor their commitments to its mortgage subsidiary.

Information regarding the Company’s mortgage commitments at October 31, 2013 and 2012 is provided in the table below (amounts in thousands).



	2013		2012
Aggregate mortgage loan commitments:
IRLCs	$	247,995	$	111,173
Non-IRLCs	645,288		456,825
Total	$	893,283	$	567,998
Investor commitments to purchase:
IRLCs	$	247,995	$	111,173
Mortgage loans receivable	107,873		80,697
Total	$	355,868	$	191,870

Rent Expense and Future Rent Payments

The Company leases certain facilities and equipment under non-cancelable operating leases. Rental expense incurred by the Company under these operating leases were (amounts in thousands):



Year ending October 31,	Amount
2013	$	10,973
2012	$	11,183
2011	$	12,405

At October 31, 2013, future minimum rent payments under the Company’s operating leases were (amounts in thousands):



Year ending October 31,	Amount
2014	$	9,619
2015	8,137
2016	6,619
2017	5,141
2018	4,111
Thereafter	3,659
	$	37,286