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Additional Balance Sheet and Cash Flow Information
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Additional Balance Sheet and Cash Flow Information Additional Balance Sheet and Cash Flow Information
The Company's investments in marketable securities consisted of the following at December 31, (in thousands): 
 
2019
 
2018
Debt securities
$

 
$
10,007

Mutual funds
52,575

 
44,243

 
$
52,575

 
$
54,250


Debt securities, included in Marketable securities on the Consolidated balance sheets, were carried at fair value with unrealized gains or losses reported in other comprehensive income. Mutual funds, which are included in Other long-term assets on the Consolidated balance sheets, are carried at fair value with gains and losses recorded in net income. The mutual funds are held to support certain deferred compensation obligations.
Inventories, net consisted of the following as of December 31, (in thousands):
 
2019
 
2018
Raw materials and work in process
$
235,433

 
$
177,110

Motorcycle finished goods
280,306

 
301,630

Parts & accessories and general merchandise
144,258

 
136,027

Inventory at lower of FIFO cost or net realizable value
659,997

 
614,767

Excess of FIFO over LIFO cost
(56,426
)
 
(58,639
)
 
$
603,571

 
$
556,128


Inventory obsolescence reserves deducted from FIFO cost were $49.3 million and $39.0 million as of December 31, 2019 and 2018, respectively.
Property, plant and equipment, net consisted of the following as of December 31, (in thousands):
 
2019
 
2018
Land and related improvements
$
75,798

 
$
73,025

Buildings and related improvements
507,178

 
483,965

Machinery and equipment
1,609,582

 
1,740,405

Software
750,978

 
733,180

Construction in progress
148,805

 
205,786

 
3,092,341

 
3,236,361

Accumulated depreciation
(2,244,959
)
 
(2,332,229
)
 
$
847,382

 
$
904,132


Software, net of accumulated amortization, included in Property, plant and equipment, net, was $138.9 million and $159.0 million as of December 31, 2019 and 2018, respectively.
Accrued liabilities consisted of the following as of December 31, (in thousands):
 
2019
 
2018
Payroll, employee benefits and related expenses
$
113,621

 
$
125,056

Sales incentive programs
73,354

 
57,525

Warranty and recalls
57,068

 
103,074

Accrued interest
49,213

 
47,977

Tax-related accruals
29,871

 
43,083

Leases
19,013

 

Fair value of derivative financial instruments
13,934

 
5,316

Restructuring
867

 
28,498

Other
225,347

 
190,601

 
$
582,288

 
$
601,130

 

Operating Cash Flow – The reconciliation of Net income to Net cash provided by operating activities for the years ended December 31, is as follows (in thousands):
 
2019
 
2018
 
2017
Cash flows from operating activities:
 
 
 
 
 
Net income
$
423,635

 
$
531,451

 
$
521,759

Adjustments to reconcile Net income to Net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
232,537

 
264,863

 
222,188

Amortization of deferred loan origination costs
76,326

 
81,315

 
82,911

Amortization of financing origination fees
9,823

 
8,367

 
8,045

Provision for long-term employee benefits
13,344

 
36,481

 
29,900

Employee benefit plan contributions and payments
(13,256
)
 
(10,544
)
 
(63,277
)
Stock compensation expense
33,733

 
35,539

 
32,491

Net change in wholesale finance receivables related to sales
(5,822
)
 
(56,538
)
 
35,172

Provision for credit losses
134,536

 
106,870

 
132,444

Deferred income taxes
21,547

 
(33,981
)
 
50,855

Other, net
298

 
37,554

 
8,559

Changes in current assets and liabilities:
 
 
 
 
 
Accounts receivable, net
44,902

 
9,143

 
(18,149
)
Finance receivables – accrued interest and other
(11,119
)
 
773

 
(1,313
)
Inventories, net
(47,576
)
 
(31,059
)
 
(20,584
)
Accounts payable and accrued liabilities
(18,462
)
 
196,192

 
10,128

Derivative financial instruments
1,936

 
473

 
1,866

Other
(28,110
)
 
29,022

 
(27,934
)
 
444,637

 
674,470

 
483,302

Net cash provided by operating activities
$
868,272

 
$
1,205,921

 
$
1,005,061

Cash paid during the years ended December 31, for interest and income taxes was as follows (in thousands):
 
2019
 
2018
 
2017
Interest
$
229,678

 
$
207,484

 
$
204,866

Income taxes
$
149,828

 
$
149,436

 
$
300,133


Interest paid represents interest payments of HDFS and interest payments of the Company, included in Financial Services interest expense and Interest expense on the Consolidated statements of income.