Note 6 - Warranty Costs

6 Months Ended

Apr. 30, 2025

6.	Warranty Costs

We accrue for warranty costs that are covered under our existing general liability and construction defect policy as part of our general liability insurance deductible. For homes to be delivered in fiscal 2025 and previously delivered in 2024, our deductible under our general liability insurance is or was $30.0 million annually, aggregated for construction defect and warranty claims. For bodily injury claims, our deductible per occurrence in fiscal 2025 and 2024 is or was $0.25 million and $0.5 million for action over claims, both with a $30.0 million limit. In addition, we establish a warranty accrual for lower cost-related issues to cover home repairs, community amenities and land development infrastructure that are not covered under our general liability and construction defect policy. We accrue an estimate for these warranty costs at the time each home is closed and control is transferred to the homebuyer. Additions, charges and changes in the warranty reserve and general liability reserve for the three and six months ended April 30, 2025 and 2024 were as follows:

	Three Months Ended						Six Months Ended
	April 30,						April 30,
(In thousands)	2025			2024			2025				2024
Balance, beginning of period	$	90,790		$	99,836			$	89,391		$	98,919
Additions – Selling, general and administrative		2,547			2,041				5,094			4,588
Additions – Cost of sales		2,116			1,982				4,218			4,850
Charges incurred during the period		(3,479	)		(18,949	)			(6,355	)		(25,593	)
Changes to pre-existing reserves		(174	)		267				(548	)		2,413
Balance, end of period	$	91,800		$	85,177			$	91,800		$	85,177