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Note 9 - Leases

9 Months Ended

Jul. 31, 2023

9.	Leases

We rent certain office space for use in our operations. Our lease population at July 31, 2023 is comprised of operating leases where we are the lessee, primarily for our corporate office and division offices.

Lease costs are included in our Condensed Consolidated Statements of Operations, primarily in "Selling, general and administrative" homebuilding expenses, and payments on our lease liabilities are presented in the table below.

	Three Months Ended				Nine Months Ended
	July 31,				July 31,
(In thousands)	2023		2022		2023		2022
Operating lease costs	$	2,646	$	2,528	$	8,510	$	7,793
Cash payments on lease liabilities	$	2,222	$	2,432	$	6,959	$	7,086

Operating right-of-use lease assets ("ROU assets") are included in "Prepaid expenses and other assets" on our Condensed Consolidated Balance Sheets, while lease liabilities are included in "Accounts payable and other liabilities". During the three and nine months ended July 31, 2023, the Company recorded a net increase of $7.2 million and $8.9 million, respectively, to both its ROU assets and lease liabilities as a result of new leases and lease renewals that commenced during the period. The following table contains additional information about our leases:

(In thousands)	July 31, 2023			October 31, 2022
ROU assets	$	20,085		$	17,899
Lease liabilities	$	20,800		$	18,862
Weighted-average remaining lease term (in years)		3.6			3.5
Weighted-average discount rate		9.7	%		9.5	%

Maturities of our operating lease liabilities as of July 31, 2023 are as follows:

Fiscal Year Ending October 31,	(In thousands)
2023 (excluding the nine months ended July 31, 2023)	$	2,344
2024		7,733
2025		6,400
2026		4,782
2027		3,239
2028 and thereafter		1,018
Total operating lease payments (1)		25,516
Less: imputed interest		(4,716	)
Present value of operating lease liabilities	$	20,800

(1) Lease payments include options to extend lease terms that are reasonably certain of being executed and exclude $10.4 million of legally binding minimum lease payments for office leases signed but not yet commenced as of July 31, 2023. The related ROU assets and operating lease liabilities are not reflected on the Company's Condensed Consolidated Balance Sheets.