Additional Balance Sheet and Cash Flow Information

Marketable Securities

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



	September 25, 2016		December 31, 2015		September 27, 2015
Available-for-sale: Corporate bonds	$	5,038	$	45,192	$	47,358
Trading securities: Mutual funds	39,063		36,256		35,258
	$	44,101	$	81,448	$	82,616

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 2016 and 2015, the Company recognized gross unrealized losses of approximately $140,000 and $467,000, respectively, or $88,000 and $294,000 net of taxes, respectively, to adjust amortized cost to fair value. The marketable securities have contractual maturities that come due over the next 7 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):



	September 25, 2016			December 31, 2015			September 27, 2015
Components at the lower of FIFO cost or market
Raw materials and work in process	$	159,209		$	161,704		$	153,779
Motorcycle finished goods	182,019			327,952			228,243
Parts and accessories and general merchandise	134,587			145,519			134,537
Inventory at lower of FIFO cost or market	475,815			635,175			516,559
Excess of FIFO over LIFO cost	(49,268		)	(49,268		)	(49,902		)
	$	426,547		$	585,907		$	466,657

Operating Cash Flow

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



	Nine months ended
	September 25, 2016			September 27, 2015
Cash flows from operating activities:
Net income	$	644,985		$	710,011
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangibles	154,565			142,024
Amortization of deferred loan origination costs	65,445			71,012
Amortization of financing origination fees	7,212			7,331
Provision for long-term employee benefits	27,608			36,954
Employee benefit plan contributions and payments	(47,658		)	(19,358		)
Stock compensation expense	24,909			23,732
Net change in wholesale finance receivables related to sales	(169,599		)	(157,532		)
Provision for credit losses	97,127			68,655
Gain on off-balance sheet asset-backed securitization	(9,269		)	—
Loss on debt extinguishment	118			—
Pension plan settlement expense	900			—
Deferred income taxes	(11,261		)	(9,272		)
Foreign currency adjustments	(11,741		)	22,010
Other, net	(11,529		)	5,000
Changes in current assets and liabilities:
Accounts receivable, net	(86,796		)	(60,687		)
Finance receivables—accrued interest and other	364			(98		)
Inventories	173,975			(36,109		)
Accounts payable and accrued liabilities	97,190			211,045
Derivative instruments	(1,992		)	(6,734		)
Other	(16,744		)	12,973
Total adjustments	282,824			310,946
Net cash provided by operating activities	$	927,809		$	1,020,957