XML 26 R14.htm IDEA: XBRL DOCUMENT
v3.4.0.3

Fair Value of Financial Instruments | 3 Months Ended
--- | ---
Mar. 27, 2016
Fair Value Disclosures [Abstract] |
Fair Value of Financial Instruments | Fair Value Measurements Certain assets and liabilities are recorded at fair value in the financial statements; some of these are measured on a recurring basis while others are measured on a non-recurring basis. Assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when required by particular events or circumstances. In determining the fair value of assets and liabilities, the Company uses various valuation techniques. The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. The Company assesses the inputs used to measure fair value using a three-tier hierarchy. The hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates and commodity prices. The Company uses the market approach to derive the fair value for its level 2 fair value measurements. Forward contracts for foreign currency, commodities and interest rates are valued using current quoted forward rates and prices; and investments in marketable securities and cash equivalents are valued using publicly quoted prices. Level 3 inputs are not observable in the market and include management’s judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the following tables. Recurring Fair Value Measurements The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis (in thousands):
| March 27, 2016
| Balance |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 531,823 |  |  | $ | 426,700 |  |  | $ | 105,123 |  |  | $ | — |
Marketable securities | 83,689 |  |  | 38,567 |  |  | 45,122 |  |  | — |
Derivatives | 3,651 |  |  | — |  |  | 3,651 |  |  | — |
| $ | 619,163 |  |  | $ | 465,267 |  |  | $ | 153,896 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Derivatives | $ | 3,176 |  |  | $ | — |  |  | $ | 3,176 |  |  | $ | — |
| December 31, 2015
| Balance |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 555,910 |  |  | $ | 390,706 |  |  | $ | 165,204 |  |  | $ | — |
Marketable securities | 81,448 |  |  | 36,256 |  |  | 45,192 |  |  | — |
Derivatives | 16,235 |  |  | — |  |  | 16,235 |  |  | — |
| $ | 653,593 |  |  | $ | 426,962 |  |  | $ | 226,631 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Derivatives | $ | 1,300 |  |  | $ | — |  |  | $ | 1,300 |  |  | $ | — |
| March 29, 2015
| Balance |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 975,411 |  |  | $ | 510,090 |  |  | $ | 465,321 |  |  | $ | — |
Marketable securities | 94,886 |  |  | 37,667 |  |  | 57,219 |  |  | — |
Derivatives | 49,290 |  |  | — |  |  | 49,290 |  |  | — |
| $ | 1,119,587 |  |  | $ | 547,757 |  |  | $ | 571,830 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Derivatives | $ | 1,886 |  |  | $ | — |  |  | $ | 1,886 |  |  | $ | — |
Nonrecurring Fair Value Measurements Repossessed inventory is recorded at the lower of cost or net realizable value through a nonrecurring fair value measurement. Repossessed inventory was $18.6 million, $17.7 million and $14.5 million at March 27, 2016, December 31, 2015 and March 29, 2015, for which the fair value adjustment was $6.5 million, $8.6 million and $3.5 million, respectively. Fair value is estimated using Level 2 inputs based on the recent market values of repossessed inventory. Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash and cash equivalents, marketable securities, trade receivables, finance receivables, net, trade payables, debt, and foreign currency exchange and commodity contracts (derivative instruments are discussed further in Note 10). The following table summarizes the fair value and carrying value of the Company’s financial instruments (in thousands):
| March 27, 2016 |  | December 31, 2015 |  | March 29, 2015
| Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value
Assets: |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 694,013 |  |  | $ | 694,013 |  |  | $ | 722,209 |  |  | $ | 722,209 |  |  | $ | 1,168,724 |  |  | $ | 1,168,724 |
Marketable securities | $ | 83,689 |  |  | $ | 83,689 |  |  | $ | 81,448 |  |  | $ | 81,448 |  |  | $ | 94,886 |  |  | $ | 94,886 |
Derivatives | $ | 3,651 |  |  | $ | 3,651 |  |  | $ | 16,235 |  |  | $ | 16,235 |  |  | $ | 49,290 |  |  | $ | 49,290 |
Finance receivables, net | $ | 7,462,125 |  |  | $ | 7,376,566 |  |  | $ | 6,937,053 |  |  | $ | 6,868,153 |  |  | $ | 6,927,898 |  |  | $ | 6,848,592 |
Restricted cash | $ | 114,924 |  |  | $ | 114,924 |  |  | $ | 110,642 |  |  | $ | 110,642 |  |  | $ | 150,631 |  |  | $ | 150,631 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Derivatives | $ | 3,176 |  |  | $ | 3,176 |  |  | $ | 1,300 |  |  | $ | 1,300 |  |  | $ | 1,886 |  |  | $ | 1,886 |
Unsecured commercial paper | $ | 869,972 |  |  | $ | 869,972 |  |  | $ | 1,201,380 |  |  | $ | 1,201,380 |  |  | $ | 70,329 |  |  | $ | 70,329 |
Global credit facilities | $ | 101 |  |  | $ | 101 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Asset-backed Canadian commercial paper conduit facility | $ | 153,311 |  |  | $ | 153,311 |  |  | $ | 153,839 |  |  | $ | 153,839 |  |  | $ | 154,035 |  |  | $ | 154,035 |
Medium-term notes | $ | 4,217,449 |  |  | $ | 4,061,832 |  |  | $ | 3,410,966 |  |  | $ | 3,316,949 |  |  | $ | 4,176,254 |  |  | $ | 3,922,136 |
Senior unsecured notes | $ | 777,336 |  |  | $ | 740,821 |  |  | $ | 737,435 |  |  | $ | 746,934 |  |  | $ | — |  |  | $ | — |
Term asset-backed securitization debt | $ | 1,288,292 |  |  | $ | 1,286,729 |  |  | $ | 1,455,776 |  |  | $ | 1,459,377 |  |  | $ | 1,771,363 |  |  | $ | 1,766,014 |
Cash and Cash Equivalents and Restricted Cash – With the exception of certain cash equivalents, the carrying values of these items in the financial statements are based on historical cost. The historical cost basis for these amounts is estimated to approximate their respective fair values due to the short maturity of these instruments. Fair value is based on Level 1 or Level 2 inputs. Marketable Securities – The carrying value of marketable securities in the financial statements is based on fair value. The fair value of marketable securities is determined primarily based on quoted prices for identical instruments or on quoted market prices of similar financial assets. Fair value is based on Level 1 or Level 2 inputs. Finance Receivables, Net – The carrying value of retail and wholesale finance receivables in the financial statements is amortized cost less an allowance for credit losses. The fair value of retail finance receivables is generally calculated by discounting future cash flows using an estimated discount rate that reflects current credit, interest rate and prepayment risks associated with similar types of instruments. Fair value is determined based on Level 3 inputs. The amortized cost basis of wholesale finance receivables approximates fair value because they either are short-term or have interest rates that adjust with changes in market interest rates. Derivatives – Forward contracts for foreign currency exchange and commodities are derivative financial instruments and are carried at fair value on the balance sheet. The fair value of these contracts is determined using quoted forward rates and prices. Fair value is calculated using Level 2 inputs. Debt – The carrying value of debt in the financial statements is generally amortized cost, net of discounts and debt issuance costs. The carrying value of unsecured commercial paper approximates fair value due to its short maturity. Fair value is calculated using Level 2 inputs. The carrying value of debt provided under the global credit facilities approximates fair value because the interest rates charged under this facility are tied directly to market rates and fluctuate as market rates change. The carrying value of debt provided under the Canadian Conduit approximates fair value since the interest rates charged under the facility are tied directly to market rates and fluctuate as market rates change. Fair value is calculated using Level 2 inputs. The fair values of the medium-term notes are estimated based upon rates available at the end of the period for debt with similar terms and remaining maturities. Fair value is calculated using Level 2 inputs. The fair value of the senior unsecured notes was estimated based upon rates available at the end of the period for debt with similar terms and remaining maturities. Fair value was calculated using Level 2 inputs. The fair value of the debt related to term asset-backed securitization transactions is estimated based on pricing available at the end of the period for transactions with similar terms and maturities. Fair value is calculated using Level 2 inputs.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration