Additional Balance Sheet and Cash Flow Information

Marketable Securities

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



	March 30, 2014		December 31, 2013		March 31, 2013
Available-for-sale: Corporate bonds	$	92,940	$	99,009	$	135,246
Trading securities: Mutual funds	33,182		30,172		22,473
	$	126,122	$	129,181	$	157,719

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 three months of 2014 and 2013, the Company recognized gross unrealized losses of approximately $67,000 and $388,000, respectively, or $42,000 and $244,000 net of taxes, respectively, to adjust amortized cost to fair value. The marketable securities have contractual maturities that generally come due over the next 2 to 26 months.

The Company's trading securities relate to investments held by the Company to fund certain deferred compensation obligations. The trading securities are carried at fair value with gains and losses recorded in net income and investments are included in other long-term assets on the consolidated balance sheets.

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):



	March 30, 2014			December 31, 2013			March 31, 2013
Components at the lower of FIFO cost or market
Raw materials and work in process	$	141,381		$	140,302		$	121,481
Motorcycle finished goods	222,649			205,416			203,275
Parts and accessories and general merchandise	133,740			127,515			137,184
Inventory at lower of FIFO cost or market	497,770			473,233			461,940
Excess of FIFO over LIFO cost	(48,726		)	(48,726		)	(45,890		)
	$	449,044		$	424,507		$	416,050

Operating Cash Flow

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



	Three months ended
	March 30, 2014			March 31, 2013
Cash flows from operating activities:
Net income	$	265,917		$	224,129
Adjustments to reconcile net income to net cash provided by (used by) operating activities:
Depreciation	43,398			42,850
Amortization of deferred loan origination costs	22,101			19,753
Amortization of financing origination fees	2,085			2,204
Provision for employee long-term benefits	8,425			16,684
Contributions to pension and postretirement plans	(6,879		)	(182,047		)
Stock compensation expense	9,239			11,096
Net change in wholesale finance receivables related to sales	(439,422		)	(336,927		)
Provision for credit losses	20,331			13,110
Deferred income taxes	(474		)	6,665
Foreign currency adjustments	(4,172		)	9,846
Other, net	3,055			(8,470		)
Changes in current assets and liabilities:
Accounts receivable, net	(61,217		)	(36,165		)
Finance receivables—accrued interest and other	793			1,246
Inventories	(20,317		)	(28,613		)
Accounts payable and accrued liabilities	356,430			79,861
Restructuring reserves	—			(12,388		)
Derivative instruments	1,222			(342		)
Other	3,071			69,019
Total adjustments	(62,331		)	(332,618		)
Net cash provided by (used by) operating activities	$	203,586		$	(108,489	)