Additional Balance Sheet and Cash Flow Information

Marketable Securities

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



	March 31, 2013		December 31, 2012		April 1, 2012
Available-for-sale:
Corporate bonds	$	135,246	$	135,634	$	134,946
	$	135,246	$	135,634	$	134,946

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 2013 and 2012, the Company recognized gross unrealized losses and gains in other comprehensive income of $0.4 million and $1.6 million, respectively, or $0.2 million and $1.0 million net of taxes, respectively, to adjust amortized cost to fair value. The marketable securities have contractual maturities that generally come due over the next 1 to 38 months.

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):



	March 31, 2013			December 31, 2012			April 1, 2012
Components at the lower of FIFO cost or market
Raw materials and work in process	$	121,481		$	111,335		$	113,127
Motorcycle finished goods	203,275			205,660			252,979
Parts and accessories and general merchandise	137,184			122,418			145,362
Inventory at lower of FIFO cost or market	461,940			439,413			511,468
Excess of FIFO over LIFO cost	(45,890		)	(45,889		)	(43,527		)
	$	416,050		$	393,524		$	467,941

Operating Cash Flow

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



	Three months ended
	March 31, 2013			April 1, 2012
Cash flows from operating activities:
Net income	$	224,129		$	172,035
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	42,850			43,203
Amortization of deferred loan origination costs	19,753			18,547
Amortization of financing origination fees	2,204			2,743
Provision for employee long-term benefits	16,684			17,293
Contributions to pension and postretirement plans	(182,047		)	(206,832		)
Stock compensation expense	11,096			11,744
Net change in wholesale finance receivables related to sales	(336,927		)	(151,046		)
Provision for credit losses	13,110			9,014
Foreign currency adjustments	9,846			(2,911		)
Other, net	(1,805		)	1,505
Changes in current assets and liabilities:
Accounts receivable, net	(36,165		)	(43,745		)
Finance receivables—accrued interest and other	1,246			3,299
Inventories	(28,613		)	(47,168		)
Accounts payable and accrued liabilities	79,861			117,460
Restructuring reserves	(12,388		)	1,296
Derivative instruments	(342		)	(486		)
Other	69,019			(19,567		)
Total adjustments	(332,618		)	(245,651		)
Net cash provided by operating activities	$	(108,489	)	$	(73,616	)