Meritage Homes Corporation Quarterly report pursuant to Section 13 or 15(d)

Organization and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2015

The table below outlines our surety bond and letter of credit obligations (in thousands):



	At September 30, 2015				At December 31, 2014
	Outstanding		Estimated work remaining to complete		Outstanding		Estimated work remaining to complete
Sureties:
Sureties related to joint ventures	$	87	$	87	$	87	$	87
Sureties related to owned projects and lots under contract	247,719		92,914		230,079		93,667
Total Sureties	$	247,806	$	93,001	$	230,166	$	93,754
Letters of Credit (“LOCs”):
LOCs in lieu of deposits for contracted lots	$	—	N/A		$	1,200	N/A
LOCs for land development	13,445		N/A		13,789		N/A
LOCs for general corporate operations	3,750		N/A		4,500		N/A
Total LOCs	$	17,195	N/A		$	19,489	N/A

Accrued liabilities at September 30, 2015 and December 31, 2014 consisted of the following (in thousands):



	September 30, 2015		December 31, 2014
Accruals related to real estate development and construction activities	$	34,747	$	34,975
Payroll and other benefits	36,565		44,107
Accrued taxes	12,022		11,096
Warranty reserves	21,140		22,080
Legal reserves	19,829		16,499
Other accruals	37,500		25,387
Total	$	161,803	$	154,144

A summary of changes in our warranty reserves follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Balance, beginning of period	$	21,993		$	20,882		$	22,080		$	21,971
Additions to reserve from new home deliveries	3,376			3,023			9,000			8,058
Warranty claims	(4,229		)	(2,451		)	(10,690		)	(9,075		)
Adjustments to pre-existing reserves	—			—			750			500
Balance, end of period	$	21,140		$	21,454		$	21,140		$	21,454