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Commitments and Contingent Liabilities | 3 Months Ended
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Feb. 29, 2024
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities 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. Product Warranty Warranty and similar reserves for homes are established at an amount estimated to be adequate to cover potential costs for materials and labor with regard to warranty-type claims expected to be incurred subsequent to the delivery of a home. Reserves are determined based on historical data and trends with respect to similar product types and geographical areas. The activity in the Company’s warranty reserve, which is included in Homebuilding other liabilities, was as follows:
| Three Months Ended |  |
(In thousands) | February 29, 2024 |  | February 28, 2023 |  |  |  |
Warranty reserve, beginning of the period | $ | 414,796 |  |  | 418,017 |  |  |  |  |
Warranties issued | 61,776 |  |  | 53,679 |  |  |  |  |
Adjustments to pre-existing warranties from changes in estimates (1) | (2,904) |  |  | (4,058) |  |  |  |  |
Payments | (68,110) |  |  | (64,304) |  |  |  |  |
Warranty reserve, end of period | $ | 405,558 |  |  | 403,334 |  |  |  |  |
(1)The adjustments to pre-existing warranties from changes in estimates during the three months ended February 29, 2024 and February 28, 2023 primarily related to specific claims in certain of the Company's homebuilding communities and other adjustments. 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 29, 2024 |  | November 30, 2023
Right-of-use assets | $ | 104,784 |  |  | 145,812 |
Lease liabilities | 112,671 |  |  | 154,271 |
Weighted-average remaining lease term (in years) | 5.0 |  | 7.5
Weighted-average discount rate | 3.8% |  | 3.4%
The Company has entered into agreements to lease certain office facilities and equipment under operating leases. Future minimum payments under the noncancellable leases in effect at February 29, 2024 were as follows:
(In thousands) | Lease Payments
2024 | $ | 22,939 |
2025 | 27,790 |
2026 | 22,092 |
2027 | 17,418 |
2028 and thereafter | 34,262 |
Total future minimum lease payments (1) | $ | 124,501 |
Less: Interest (2) | 11,830 |
Present value of lease liabilities (2) | $ | 112,671 |
(1)Total future minimum lease payments exclude variable lease costs of $15.3 million and short-term lease costs of $2.4 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
(In thousands) | February 29, 2024 |  | February 28, 2023
Rental expense | $ | 26,217 |  |  | 26,904 |
In December 2023, the Company purchased its corporate headquarters building in which the Company had previously leased office space. This building contains approximately 213,200 square feet of office space, of which the Company leases approximately 53,000 square feet of unused office space to other tenants. 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 29, 2024 and February 28, 2023, the Company had an immaterial amount of sublease income.

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