Accrued Expenses

3 Months Ended

Jan. 31, 2022

Accrued expenses at January 31, 2022 and October 31, 2021 consisted of the following (amounts in thousands):


	January 31, 2022		October 31, 2021
Land, land development, and construction	$	298,390	$	310,996
Compensation and employee benefits	176,256		232,161
Escrow liability	46,159		36,107
Self-insurance	239,194		236,369
Warranty	143,043		145,062
Lease liabilities	119,851		116,248
Deferred income	38,515		36,638
Interest	35,762		34,033
Commitments to unconsolidated entities	29,969		22,150
Treasury share purchases	57,699		—
Other	51,587		50,471
	$	1,236,425	$	1,220,235

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,
		2022		2021
Balance, beginning of period		$	145,062	$	157,351
Additions – homes closed during the period		9,455		7,402

Increase in accruals for homes closed in prior years, net		2,957		1,194

Charges incurred		(14,431)		(15,070)
Balance, end of period		$	143,043	$	150,877

Since fiscal 2014, we have received water intrusion claims from owners of homes built since 2002 in communities located in Pennsylvania and Delaware. 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.

From October 31, 2016 through the second quarter of fiscal 2020, our recorded aggregate estimated repair costs to be incurred for known and unknown water intrusion claims were $324.4 million and our recorded aggregate expected recoveries from insurance carriers and suppliers were approximately $152.6 million. Based on trends in claims experience over several years and lower than anticipated repair costs, in the second fiscal quarter of 2020 and again in the fourth fiscal quarter of 2021, we reduced the aggregate estimated repair costs to be incurred for known and unknown water intrusion claims by a total of $36.2 million. Because this reduction was associated with periods in which we expect our insurance deductibles and self-insured retentions to be exhausted, we reduced our aggregate expected recoveries from insurance carriers and suppliers by a corresponding $36.2 million. Our recorded remaining estimated repair costs, which reflects a reduction for the aggregate amount expended to resolve claims, were approximately $53.2 million at January 31, 2022 and $54.7 million at October 31, 2021. Our recorded remaining expected recoveries from insurance carriers and suppliers were approximately $4.6 million at January 31, 2022 and $5.8 million at October 31, 2021.

As noted above, 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.