Warranty Accrual

12 Months Ended

Dec. 31, 2012

Warranty Accrual

10. Warranty Accrual

The following table summarizes the warranty reserve activity for the years ended December 31, 2012, 2011 and 2010.

	Year Ended December 31,
	2012			2011			2010
	(Dollars in thousands)
Balance at beginning of period	$	25,525		$	34,704		$	59,022
Expense provisions		4,216			4,224			5,320
Cash payments		(6,590	)		(7,925	)		(8,793	)
Adjustments		-			(5,478	)		(20,845	)
Balance at end of period	$	23,151		$	25,525		$	34,704

During the years ended December 31, 2012, 2011 and 2010, we continued to experience lower than anticipated warranty payments on previously closed homes. We believe the lower warranty payment experience rate in the 2011 and 2010 periods were driven by, among other things, tighter focus and controls over our warranty expenditures, a significant drop in sales volumes over the last several years, which resulted in fewer homes under warranty, and better quality controls and construction practices. As a result of favorable warranty payment experience relative to our estimates at the time of home closing, partially offset by increases in specific warranty reserves established for warranty-related issues in a limited number of subdivisions, we recorded adjustments to reduce our warranty reserve by $5.5 million and $20.8 million for the years ended December 31, 2011 and 2010, respectively.