EXHIBIT

term investment rate at October 31 of the fiscal year for which the present value was calculated. Information related to the plans is based on actuarial information calculated as of October 31, 2022, 2021 and 2020. Information related to our retirement plans for each of the fiscal years ended October 31, 2022, 2021, and 2020, is as follows (amounts in thousands):

2022 2021 2020

Plan costs: Service cost Interest cost Amortization of prior service cost Amortization of unrecognized losses

Projected benefit obligation: Beginning of year Plan amendments adopted during year Service cost $ 261 $ 452 $ 453 1,055 926 1,158 1,806 1,723 1,468 — 77 23 $ 3,122 $ 3,178 $ 3,102

$ 47,705 $ 48,374 $ 45,070 — 755 2,600 261 452 453

Interest cost Benefit payments Change in unrecognized (gain) loss Projected benefit obligation, end of year Unamortized prior service cost: Beginning of year Plan amendments adopted during year Amortization of prior service cost Unamortized prior service cost, end of year Accumulated unrecognized gain (loss), October 31 Accumulated benefit obligation, October 31 Accrued benefit obligation, October 31 1,055 926 1,158 (2,544) (1,894) (1,636) (9,573) (908) 729 $ 36,904 $ 47,705 $ 48,374

$ 5,484 $ 6,452 $ 5,320 — 755 2,600 (1,806) (1,723) (1,468) $ 3,678 $ 5,484 $ 6,452 $ 7,285 $ (2,288) $ (3,273) $ 36,904 $ 47,705 $ 48,374 $ 36,904 $ 47,705 $ 48,374

The accrued benefit obligation is included in accrued expenses on our Consolidated Balance Sheets. The table below provides, based upon the estimated retirement dates of the participants in the retirement plans, the amounts of benefits we would be required to pay in each of the next five fiscal years and for the five fiscal years ended October 31, 2032 in the aggregate (in thousands): Year ending October 31, 2023 2024 2025 2026 2027 November 1, 2027 – October 31, 2032 Amount $ 2,780 $ 3,108 $ 3,381 $ 3,629 $ 3,614 $ 16,836

14. 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 and 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.

Generally, our 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 an agreement. If market conditions are weak, approvals needed to develop the land are uncertain, or other factors exist that make the purchase undesirable, we may choose not to acquire the land. Whether a purchase agreement is legally terminated or not, we review the amount recorded for the land parcel subject to the purchase agreement to determine whether the amount is recoverable. While we may not have formally terminated the purchase agreements for those land parcels that we do not expect to acquire, we write off any nonrefundable deposits and costs previously capitalized to such land parcels in the periods that we determine such costs are not recoverable. Information regarding our land purchase contracts at October 31, 2022 and 2021, is provided in the table below (amounts in thousands):

2022 2021

Aggregate purchase price:

Unrelated parties

Unconsolidated entities that the Company has investments in

Total Deposits against aggregate purchase price Additional cash required to acquire land

Total Amount of additional cash required to acquire land included in accrued expenses $ 4,279,660 $ 4,442,804 42,057 9,953 $ 4,321,717 $ 4,452,757 $ 463,452 $ 336,363 3,858,265 4,116,394 $ 4,321,717 $ 4,452,757 $ 34,994 $ 37,447

In addition, we expect to purchase approximately 6,700 additional home sites over a number of years from several joint ventures in which we have investments; the purchase prices of these home sites will be determined at a future date. At October 31, 2022, we also had similar purchase contracts to acquire land for apartment developments of approximately $308.8 million, of which we had outstanding deposits in the amount of $9.6 million. We intend to develop these projects in joint ventures with unrelated parties in the future. 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.

Investments in Unconsolidated Entities

At October 31, 2022, 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 4, “Investments in Unconsolidated Entities,” for more information regarding our commitments to these entities.

Surety Bonds and Letters of Credit

At October 31, 2022, we had outstanding surety bonds amounting to $796.5 million, primarily related to our obligations to governmental entities to construct improvements in our communities. We estimate that $413.1 million of work remains on these improvements. We have an additional $274.6 million of surety bonds outstanding that guarantee other obligations. We do not believe it is probable that any outstanding bonds will be drawn upon. At October 31, 2022, we had outstanding letters of credit of $117.7 million under our Revolving 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. At October 31, 2022, we had provided financial guarantees of $25.7 million related to fronted letters of credit to secure obligations related to certain of our insurance policy deductibles and other claims.

Backlog

At October 31, 2022, we had agreements of sale outstanding to deliver 8,098 homes with an aggregate sales value of $8.87 billion.

Mortgage Commitments

Our mortgage subsidiary provides mortgage financing for a portion of our home closings. For those home buyers to whom our mortgage subsidiary provides mortgages, we determine whether the home buyer qualifies for the mortgage based upon information provided by the home buyer and other sources. For those home buyers who qualify, our 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, our mortgage subsidiary agrees to sell the proposed mortgage loan to one of several outside recognized mortgage financing institutions (“investors”) that is willing to honor the terms and conditions, including interest rate, committed to the home buyer. We believe that these investors have adequate financial resources to honor their commitments to our mortgage subsidiary. Mortgage loans are sold to investors with limited recourse provisions derived from industry-standard representations and warranties in the relevant agreements. These representations and warranties primarily involve the absence of misrepresentations by the borrower or other parties, the appropriate underwriting of the loan and in some cases, a required minimum number of payments to be made by the borrower. The Company generally does not retain any other continuing interest related to mortgage loans sold in the secondary market. Information regarding our mortgage commitments at October 31, 2022 and 2021, is provided in the table below (amounts in thousands):

2022 2021

Aggregate mortgage loan commitments:

IRLCs

Non-IRLCs

Total Investor commitments to purchase:

IRLCs

Mortgage loans receivable

Total $ 669,631 $ 528,127 2,429,063 2,705,772 $ 3,098,694 $ 3,233,899

$ 669,631 $ 528,127 186,666 244,376 $ 856,297 $ 772,503

Lease Commitments

We lease certain facilities, equipment, and properties held for rental apartment operation or development under non-cancelable operating leases which, in the case of certain rental properties, have an initial term of 99 years. We recognize 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 with an expected term over one year. A majority of our facility lease agreements include rental payments based on a pro-rata share of the lessor’s operating costs which are variable in nature. Our lease agreements do not contain any residual value guarantees or material restrictive covenants. ROU assets are classified within “Receivables, prepaid expenses, and other assets” and the corresponding lease liability is included in “Accrued expenses” in our Consolidated Balance Sheets. We elected the short-term lease recognition exemption for all leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that we are reasonably certain to exercise. For such leases, we do not recognize ROU assets or lease liabilities and instead recognize lease payments in our Consolidated Statements of Operations and Comprehensive Income on a straightline basis. At October 31, 2022, ROU assets and lease liabilities were $116.7 million and $139.7 million, respectively. At October 31, 2021, ROU assets and lease liabilities were $96.3 million and $116.2 million, respectively. Payments on lease liabilities totaled $17.7 million and $19.4 million for the years ending October 31, 2022 and 2021, respectively. Lease expense includes costs for leases with terms in excess of one year as well as short-term leases with terms of one year or less. For the fiscal years ending October 31, 2022, 2021, and 2020, our total lease expense was $25.6 million, $22.2 million, and $24.7 million, respectively, inclusive of variable lease costs of approximately $3.3 million, $3.1 million, and $3.1 million, respectively. Short-term lease costs and sublease income was de minimis.