3. Additional Balance Sheet and Cash Flow Information

Marketable Securities

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


	September 25, 2011		December 31, 2010		September 26, 2010
Available-for-sale:
Corporate bonds	$	179,285	$	50,231	$	55,229
U.S. Treasuries		—		89,887		—

	$	179,285	$	140,118	$	55,229

The Company's available-for-sale securities are carried at fair value with any unrealized gains or losses reported in other comprehensive income, and have maturities of less than one year. During the first nine months of 2011 and 2010, the Company recognized gross unrealized gains of $1.5 million and losses of $1.1 million, respectively, or $0.9 million and $0.7 million net of taxes, respectively, to adjust amortized cost to fair value.

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 consisted of the following (in thousands):


	September 25, 2011			December 31, 2010			September 26, 2010
Components at the lower of FIFO cost or market
Raw materials and work in process	$	95,957		$	100,082		$	103,916
Motorcycle finished goods		154,273			158,425			144,794
Parts and accessories and general merchandise		131,708			101,975			105,828

Inventory at lower of FIFO cost or market		381,938			360,482			354,538
Excess of FIFO over LIFO cost		(35,975	)		(34,036	)		(35,437	)

	$	345,963		$	326,446		$	319,101

Operating Cash Flow

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


	Nine months ended
	September 25, 2011			September 26, 2010
Cash flows from operating activities:
Net income	$	493,434		$	193,311
Loss from discontinued operations		—			(108,434	)

Income from continuing operations		493,434			301,745

Adjustments to reconcile income from continuing operations to net cash (used by) provided by operating activities:
Depreciation		131,938			199,629
Amortization of deferred loan origination costs		59,272			66,605
Amortization of financing origination fees		8,171			16,890
Provision for employee long-term benefits		50,983			64,331
Contributions to pension and postretirement plans		(207,829	)		(28,138	)
Stock compensation expense		28,316			21,486
Net change in wholesale finance receivables related to sales		77,519			148,646
Provision for credit losses		5,005			69,117
Loss on debt extinguishment		8,671			—
Pension and postretirement healthcare plan curtailment and settlement expense		236			30,206
Foreign currency adjustments		11,381			(18,481	)
Other, net		11,036			32,304
Changes in current assets and liabilities:
Accounts receivable, net		(19,473	)		(38,603	)
Finance receivables - accrued interest and other		7,069			9,825
Inventories		(19,451	)		5,941
Accounts payable and accrued liabilities		257,373			306,173
Restructuring reserves		2,664			(18,332	)
Derivative instruments		(2,279	)		3,978
Other		(2,435	)		(3,820	)

Total adjustments		408,167			867,757

Net cash provided by operating activities of continuing operations	$	901,601		$	1,169,502