Additional Balance Sheet and Cash Flow Information

Marketable Securities

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



	March 26, 2017		December 31, 2016		March 27, 2016
Available-for-sale securities: corporate bonds	$	5,004	$	5,519	$	45,122
Trading securities: mutual funds	41,674		38,119		38,567
Total marketable securities	$	46,678	$	43,638	$	83,689

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 2017 and 2016, the Company recognized gross unrealized losses of approximately $16,000 and $71,000, respectively, or losses of approximately $10,000 and $45,000, net of tax, respectively, to adjust amortized cost to fair value. The marketable securities have contractual maturities that come due in the second quarter of 2017.

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 net realizable value. 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 net realizable value using the first-in, first-out (FIFO) method. Inventories consisted of the following (in thousands):



	March 26, 2017			December 31, 2016			March 27, 2016
Components at the lower of FIFO cost or net realizable value
Raw materials and work in process	$	153,195		$	140,639		$	158,632
Motorcycle finished goods	263,408			285,281			291,834
Parts and accessories and general merchandise	117,140			122,264			152,552
Inventory at lower of FIFO cost or net realizable value	533,743			548,184			603,018
Excess of FIFO over LIFO cost	(48,267		)	(48,267		)	(49,268		)
Total inventories, net	$	485,476		$	499,917		$	553,750

Operating Cash Flow

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



	Three months ended
	March 26, 2017			March 27, 2016
Cash flows from operating activities:
Net income	$	186,369		$	250,489
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangibles	54,900			50,027
Amortization of deferred loan origination costs	20,078			21,546
Amortization of financing origination fees	2,076			2,802
Provision for long-term employee benefits	7,475			9,503
Employee benefit plan contributions and payments	(29,957		)	(29,641		)
Stock compensation expense	6,992			7,053
Net change in wholesale finance receivables related to sales	(317,087		)	(507,731		)
Provision for credit losses	43,589			37,123
Deferred income taxes	3,989			3,636
Other, net	(5,334		)	(7,302		)
Changes in current assets and liabilities:
Accounts receivable, net	(39,230		)	(57,885		)
Finance receivables - accrued interest and other	5,142			685
Inventories	23,476			40,539
Accounts payable and accrued liabilities	182,928			222,800
Derivative instruments	3,120			1,196
Other	11,413			(3,709		)
Total adjustments	(26,430		)	(209,358		)
Net cash provided by operating activities	$	159,939		$	41,131