Employee Benefit Plans

The Company has defined benefit pension plans and postretirement healthcare benefit plans that cover certain employees of the Motorcycles segment. The Company also has unfunded supplemental employee retirement plan agreements (SERPA) with certain employees which were instituted to replace benefits lost under the Tax Revenue Reconciliation Act of 1993. Net periodic benefit costs are allocated between selling, administrative and engineering expense, cost of goods sold and inventory. Amounts capitalized in inventory are not significant. Components of net periodic benefit costs were as follows (in thousands):



	Three months ended						Six months ended
	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012
Pension and SERPA Benefits
Service cost	$	8,997		$	8,420		$	17,994		$	16,840
Interest cost	19,752			20,816			39,564			41,632
Expected return on plan assets	(31,832		)	(29,277		)	(63,664		)	(58,555		)
Amortization of unrecognized:
Prior service cost	437			740			874			1,479
Net loss	14,652			10,969			29,304			21,937
Net periodic benefit cost	$	12,006		$	11,668		$	24,072		$	23,333
Postretirement Healthcare Benefits
Service cost	$	1,965		$	1,853		$	3,930		$	3,706
Interest cost	3,900			4,578			7,800			9,155
Expected return on plan assets	(2,384		)	(2,356		)	(4,768		)	(4,712		)
Amortization of unrecognized:
Prior service credit	(963		)	(963		)	(1,926		)	(1,927		)
Net loss	2,137			1,855			4,274			3,711
Net periodic benefit cost	$	4,655		$	4,967		$	9,310		$	9,933

During the first six months of 2013 and 2012, the Company voluntarily contributed $175 million and $200 million, respectively, in cash to further fund its pension plans. No additional pension contributions are required in 2013. The Company expects it will continue to make on-going contributions related to current benefit payments for SERPA and postretirement healthcare plans.