Warranty Accrual

3 Months Ended

Mar. 31, 2012

9.	Warranty Accrual

The Company records expenses and warranty accruals for general and structural warranty claims, as well as reserves for known, unusual warranty-related expenditures. The Company's management estimates the warranty reserves based on the Company's trends in historical warranty payment levels and warranty payments for claims not considered to be normal and recurring. Warranty payments incurred for an individual house may differ from the related accrual established for the home at the time it was closed. The actual disbursements for warranty claims are evaluated in the aggregate. The table set forth below summarizes warranty accrual activity for the three months ended March 31, 2012 and 2011.


	Three Months Ended March 31,
	2012			2011
	(Dollars in thousands)
Balance at beginning of year	$	25,525		$	34,704
Expense provisions		765			841
Cash payments		(1,214	)		(1,499	)
Adjustments		—			(431	)

Balance at end of period	$	25,076		$	33,615

Cash payments for the 2012 first quarter includes an offset comprised of $1.3 million of cash received from a third party vendor for amounts that were originally paid from the Company's warranty reserves.