Additional Balance Sheet and Cash Flow Information

Marketable Securities

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



	June 28, 2015		December 31, 2014		June 29, 2014
Available-for-sale: Corporate bonds	$	52,516	$	57,325	$	57,814
Trading securities: Mutual funds	37,698		33,815		33,567
	$	90,214	$	91,140	$	91,381

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 half of 2015 and 2014, the Company recognized gross unrealized losses of approximately $310,000 and $184,000, respectively, or $195,000 and $116,000 net of taxes, respectively, to adjust amortized cost to fair value. The marketable securities have contractual maturities that generally come due over the next 3 to 22 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):



	June 28, 2015			December 31, 2014			June 29, 2014
Components at the lower of FIFO cost or market
Raw materials and work in process	$	137,151		$	151,254		$	118,720
Motorcycle finished goods	186,326			230,309			179,314
Parts and accessories and general merchandise	121,469			117,210			122,289
Inventory at lower of FIFO cost or market	444,946			498,773			420,323
Excess of FIFO over LIFO cost	(49,902		)	(49,902		)	(48,726		)
	$	395,044		$	448,871		$	371,597

Operating Cash Flow

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



	Six months ended
	June 28, 2015			June 29, 2014
Cash flows from operating activities:
Net income	$	569,664		$	620,070
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	93,640			87,123
Amortization of deferred loan origination costs	47,524			45,713
Amortization of financing origination fees	4,820			4,284
Provision for employee long-term benefits	24,635			16,854
Contributions to pension and postretirement plans	(12,725		)	(14,035		)
Stock compensation expense	16,734			20,768
Net change in wholesale finance receivables related to sales	(418,969		)	(510,200		)
Provision for credit losses	41,422			36,292
Loss on debt extinguishment	—			1,145
Deferred income taxes	(1,195		)	(3,894		)
Foreign currency adjustments	11,041			(5,084		)
Other, net	(1,964		)	9,332
Changes in current assets and liabilities:
Accounts receivable, net	(43,309		)	(25,643		)
Finance receivables—accrued interest and other	(270		)	(993		)
Inventories	38,012			58,741
Accounts payable and accrued liabilities	232,357			226,233
Derivative instruments	1,185			968
Other	11,342			2,918
Total adjustments	44,280			(49,478		)
Net cash provided by operating activities	$	613,944		$	570,592