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

ORGANIZATION AND BASIS OF PRESENTATION (Tables)

3 Months Ended

Mar. 31, 2017

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



	As of
	March 31, 2017				December 31, 2016
	Outstanding		Estimated work remaining to complete		Outstanding		Estimated work remaining to complete
Sureties:
Sureties related to owned projects and lots under contract	236,764		81,245		239,246		85,706
Total Sureties	$	236,764	$	81,245	$	239,246	$	85,706
Letters of Credit (“LOCs”):
LOCs in lieu of deposits for contracted lots	$	5,250	N/A		$	250	N/A
LOCs for land development	38,245		N/A		39,839		N/A
LOCs for general corporate operations	3,750		N/A		3,750		N/A
Total LOCs	$	47,245	N/A		$	43,839	N/A

Accrued liabilities at March 31, 2017 and December 31, 2016 consisted of the following (in thousands):



	As of
	March 31, 2017		December 31, 2016
Accruals related to real estate development and construction activities	$	51,050	$	53,778
Payroll and other benefits	30,660		52,941
Accrued taxes	12,143		9,637
Warranty reserves	22,477		22,660
Legal reserves (1)	875		673
Other accruals	41,461		31,163
Total	$	158,666	$	170,852


(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 March 31,
	2017			2016
Balance, beginning of period	$	22,660		$	21,615
Additions to reserve from new home deliveries	3,815			3,094
Warranty claims	(3,998		)	(2,842		)
Adjustments to pre-existing reserves	—			441
Balance, end of period	$	22,477		$	22,308