Product Warranties

6 Months Ended

Jun. 30, 2015

9.	Product Warranties

The Company establishes warranty and product liability reserves (“warranty reserve”) to provide for estimated future expenses as a result of construction and product defects, product recalls and litigation incidental to NVR’s homebuilding business. Liability estimates are determined based on management’s judgment, considering such factors as historical experience, the likely current cost of corrective action, manufacturers’ and subcontractors’ participation in sharing the cost of corrective action, consultations with third party experts such as engineers, and discussions with the Company’s general counsel and outside counsel retained to handle specific product liability cases. The following table reflects the changes in the Company’s warranty reserve during the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Warranty reserve, beginning of period	$	89,743		$	98,765		$	94,060		$	101,507
Provision		11,144			13,193			20,226			23,453
Payments		(15,013	)		(14,768	)		(28,412	)		(27,770	)
Warranty reserve, end of period	$	85,874		$	97,190		$	85,874		$	97,190

The warranty reserve provision for the three and six months ended June 30, 2014 included an additional charge of $3,000 and $3,975, respectively, related to the estimated cost of ongoing remediation of a previously disclosed water infiltration issue in a single community. During the three month period ended June 30, 2015, approximately $1,300 of the estimated accrued remediation costs related to this issue were reversed as the repairs neared completion and actual expected costs became known.