Additional Balance Sheet and Cash Flow Information

Marketable Securities

The Company’s marketable securities consisted of the following (in thousands):



	September 29, 2013		December 31, 2012		September 30, 2012
Available-for-sale:
Corporate bonds	$	122,234	$	135,634	$	136,376
	$	122,234	$	135,634	$	136,376

The Company’s available-for-sale securities are carried at fair value with any unrealized gains or losses reported in other comprehensive income. During the first nine months of 2013 and 2012, the Company recognized gross unrealized (losses) and gains in other comprehensive income of $(1.3) million and $1.1 million, respectively, or $(0.8) million and $0.7 million net of taxes, respectively, to adjust amortized cost to fair value. The marketable securities have contractual maturities that generally come due over the next 1 to 32 months.

Inventories

Inventories are valued at the lower of cost or market. Substantially all inventories located in the United States are valued using the last-in, first-out (LIFO) method. Other inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. Inventories consist of the following (in thousands):



	September 29, 2013			December 31, 2012			September 30, 2012
Components at the lower of FIFO cost or market
Raw materials and work in process	$	130,510		$	111,335		$	121,184
Motorcycle finished goods	181,239			205,660			169,515
Parts and accessories and general merchandise	135,339			122,418			132,789
Inventory at lower of FIFO cost or market	447,088			439,413			423,488
Excess of FIFO over LIFO cost	(45,889		)	(45,889		)	(44,359		)
	$	401,199		$	393,524		$	379,129

Operating Cash Flow

The reconciliation of net income to net cash provided by operating activities is as follows (in thousands):



	Nine months ended
	September 29, 2013			September 30, 2012
Cash flows from operating activities:
Net income	$	658,584		$	553,286
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	122,658			127,443
Amortization of deferred loan origination costs	63,548			58,438
Amortization of financing origination fees	6,994			7,462
Provision for employee long-term benefits	50,158			50,348
Contributions to pension and postretirement plans	(197,243		)	(220,733		)
Stock compensation expense	31,030			30,287
Net change in wholesale finance receivables related to sales	(71,869		)	5,570
Provision for credit losses	39,011			12,823
Loss on debt extinguishment	4,947			—
Foreign currency adjustments	12,874			8,692
Other, net	(63		)	9,411
Changes in current assets and liabilities:
Accounts receivable, net	(65,835		)	(37,904		)
Finance receivables—accrued interest and other	937			1,597
Inventories	(19,233		)	36,463
Accounts payable and accrued liabilities	142,277			99,642
Restructuring reserves	(24,521		)	(9,177		)
Derivative instruments	(1,818		)	611
Other	72,667			(21,761		)
Total adjustments	166,519			159,212
Net cash provided by operating activities	$	825,103		$	712,498