2. Additional Balance Sheet and Cash Flow Information

The following information represents additional detail for selected line items included in the consolidated balance sheets at December 31 and the statements of cash flows for the years ended December 31.

Balance Sheet Information:

Inventories, net (in thousands):


	2011			2010
Components at the lower of FIFO cost or market
Raw materials and work in process	$	113,932		$	100,082
Motorcycle finished goods		226,261			158,425
Parts and accessories and general merchandise		121,340			101,975

Inventory at lower of FIFO cost or market		461,533			360,482
Excess of FIFO over LIFO cost		(43,527	)		(34,036	)

	$	418,006		$	326,446

Inventory obsolescence reserves deducted from FIFO cost were $24.8 million and $34.2 million as of December 31, 2011 and 2010, respectively.

Property, plant and equipment, at cost (in thousands):


	2011			2010
Land and related improvements	$	59,995		$	59,613
Buildings and related improvements		466,652			477,935
Machinery and equipment		1,920,485			2,068,842
Construction in progress		158,237			165,548

		2,605,369			2,771,938
Accumulated depreciation		(1,795,910	)		(1,956,826	)

	$	809,459		$	815,112

Accrued liabilities (in thousands):


	2011		2010
Payroll, employee benefits and related expenses	$	226,381	$	199,408
Restructuring reserves		43,310		35,234
Warranty and recalls		54,994		54,134
Sales incentive programs		41,448		35,762
Tax-related accruals		57,706		63,115
Fair value of derivative financial instruments		5,136		20,083
Other		135,197		148,935

	$	564,172	$	556,671

Components of accumulated other comprehensive loss, net of tax (in thousands):


	2011			2010
Cumulative foreign currency translation adjustment	$	49,935		$	55,551
Unrealized net loss on derivative financial instruments		6,307			(11,912	)
Unrealized net loss on marketable securities		327			(133	)
Unrecognized pension and postretirement healthcare liabilities		(533,302	)		(409,728	)

	$	(476,733	)	$	(366,222	)

Cash Flow Information:

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


	2011			2010			2009
Cash flows from operating activities:
Net income (loss)	$	599,114		$	146,545		$	(55,116	)
Income (loss) from discontinued operations		51,036			(113,124	)		(125,757	)

Income from continuing operations		548,078			259,669			70,641
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		180,408			255,171			246,344
Amortization of deferred loan origination costs		78,695			87,223			66,779
Amortization of financing origination fees		10,790			19,618			27,145
Provision for employee long-term benefits		59,441			79,630			80,387
Contributions to pension and postretirement plans		(219,695	)		(39,391	)		(233,224	)
Stock compensation expense		38,192			30,431			17,576
Net change in wholesale finance receivables related to sales		(2,335	)		81,527			332,167
Origination of retail finance receivables held for sale		—			—			(1,180,467	)
Collections on retail finance receivables held for sale		—			—			919,201
Impairment of retained securitization interests		—			—			45,370
Lower of cost or fair market value adjustment on finance receivables held for sale		—			—			5,895
Provision for credit losses		17,031			93,118			169,206
Loss on debt extinguishment		9,608			85,247			—
Pension and postretirement healthcare plan curtailment and settlement expense		236			31,824			37,814
Goodwill and other impairments		—			—			46,411
Deferred income taxes		87,873			(17,591	)		6,931
Foreign currency adjustments		10,678			(21,480	)		(22,234	)
Other, net		(15,807	)		11,910			9,665
Changes in current assets and liabilities:
Accounts receivable, net		43,050			2,905			8,809
Finance receivables – accrued interest and other		5,027			10,083			(3,360	)
Inventories		(94,957	)		2,516			85,472
Accounts payable and accrued liabilities		120,291			215,013			(201,195	)
Restructuring reserves		8,072			(32,477	)		65,988
Derivative instruments		(2,488	)		5,339			4,711
Other		3,103			3,133			2,978

Total adjustments		337,213			903,749			538,369

Net cash provided by operating activities of continuing operations	$	885,291		$	1,163,418		$	609,010

Cash paid during the period for interest and income taxes (in thousands):


	2011		2010		2009
Interest	$	251,341	$	346,855	$	336,453
Income taxes	$	84,984	$	47,084	$	123,232

Interest paid represents interest payments of HDFS (included in financial services interest expense) and interest payments of the Company (included in interest expense).