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

ORGANIZATION AND BASIS OF PRESENTATION (Tables)

6 Months Ended

Jun. 30, 2016

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



	As of
	June 30, 2016				December 31, 2015
	Outstanding		Estimated work remaining to complete		Outstanding		Estimated work remaining to complete
Sureties:
Sureties related to joint ventures	$	—	$	—	$	87	$	87
Sureties related to owned projects and lots under contract	242,212		72,120		250,639		103,200
Total Sureties	$	242,212	$	72,120	$	250,726	$	103,287
Letters of Credit (“LOCs”):
LOCs in lieu of deposits for contracted lots	$	500	N/A		$	—	N/A
LOCs for land development	27,847		N/A		23,934		N/A
LOCs for general corporate operations	3,750		N/A		3,750		N/A
Total LOCs	$	32,097	N/A		$	27,684	N/A

Accrued liabilities at June 30, 2016 and December 31, 2015 consisted of the following (in thousands):



	As of
	June 30, 2016		December 31, 2015
Accruals related to real estate development and construction activities	$	55,562	$	37,509
Payroll and other benefits	33,272		41,240
Accrued taxes	11,493		9,950
Warranty reserves	22,699		21,615
Legal reserves (1)	1,659		18,812
Other accruals	29,958		32,037
Total	$	154,643	$	161,163

(1) See Note 15 for additional information related to our legal reserves.

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



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Balance, beginning of period	$	22,308		$	21,839		$	21,615		$	22,080
Additions to reserve from new home deliveries	4,423			2,996			7,958			5,624
Warranty claims	(3,757		)	(3,592		)	(6,599		)	(6,461		)
Adjustments to pre-existing reserves	(275		)	750			(275		)	750
Balance, end of period	$	22,699		$	21,993		$	22,699		$	21,993