Commitments and Contingent Liabilities

3 Months Ended

Feb. 28, 2023

Commitments and Contingencies Disclosure [Abstract]

The Company is party to various claims, legal actions and complaints relating to homes sold by the Company arising in the ordinary course of business. In the opinion of management, the disposition of these matters will not have a material adverse effect on the Company’s condensed consolidated financial statements. From time to time, the Company is also a party to various lawsuits involving purchases and sales of real property. These lawsuits often include claims regarding representations and warranties made in connection with the transfer of properties and disputes regarding the obligation to purchase or sell properties.

The Company does not believe that the ultimate resolution of these claims or lawsuits will have a material adverse effect on its business or financial position. However, the financial effect of litigation concerning purchases and sales of property may depend upon the value of the subject property, which may have changed from the time the agreement for purchase or sale was entered into.

Leases

The Company has entered into agreements to lease certain office facilities and equipment under operating leases. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Right-of-use ("ROU") assets and

lease liabilities are recorded on the balance sheet for all leases, except leases with an initial term of 12 months or less. Many of the Company's leases include options to renew. The exercise of lease renewal options is at the Company's option and therefore renewal option payments have not been included in the ROU assets or lease liabilities. The following table includes additional information about the Company's leases:


(Dollars in thousands)	February 28, 2023		November 30, 2022
Right-of-use assets	$	143,457	149,966
Lease liabilities	152,157		158,832
Weighted-average remaining lease term (in years)	7.8		7.9
Weighted-average discount rate	3.1%		3.0%

Future minimum payments under the noncancellable leases in effect at February 28, 2023 were as follows:


(In thousands)	Lease Payments
2023	$	25,877
2024	28,766
2025	24,298
2026	18,948
2027	16,130
2027 and thereafter	56,957
Total future minimum lease payments (1)	$	170,976
Less: Interest (2)	18,819
Present value of lease liabilities (2)	$	152,157

(1)Total future minimum lease payments exclude variable lease costs of $22.7 million and short-term lease costs of $2.7 million.

(2)The Company's leases do not include a readily determinable implicit rate. As such, the Company has estimated the discount rate for these leases to determine the present value of lease payments at the lease commencement date or as of December 1, 2019, which was the effective date of ASU 2016-02. The Company recognized the lease liabilities on its condensed consolidated balance sheets within accounts payable and other liabilities of the respective segments.

The Company's rental expense on lease liabilities were as follows:



	Three Months Ended
	February 28,
(In thousands)	2023		2022
Rental expense	$	26,904	25,641

On occasion, the Company may sublease rented space which is no longer used for the Company's operations. For both the three months ended February 28, 2023 and 2022, the Company had an immaterial amount of sublease income.