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Fair Value
6 Months Ended
Jun. 27, 2021
Fair Value Disclosures [Abstract]  
Fair Value Fair Value
The Company assesses the inputs used to measure fair value using a three-tier hierarchy.
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, commodity prices, and yield curves. The Company uses the market approach to derive the fair value for its Level 2 fair value measurements. Foreign currency contracts, commodity contracts, cross-currency swaps and treasury rate lock contracts are valued using quoted forward rates and prices; interest rate swaps and caps are valued using quoted interest rates and yield curves; investments in marketable securities and cash equivalents are valued using quoted prices.
Level 3 inputs are not observable in the market and include the Company's judgments about the assumptions market participants would use in pricing the asset or liability.
Recurring Fair Value Measurements – The Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):
 June 27, 2021
BalanceLevel 1Level 2
Assets:
Cash equivalents$1,439,400 $1,274,400 $165,000 
Marketable securities52,434 52,434 — 
Derivative financial instruments97,464 — 97,464 
$1,589,298 $1,326,834 $262,464 
Liabilities:
Derivative financial instruments$3,836 $— $3,836 
 December 31, 2020
Balance Level 1Level 2
Assets:
Cash equivalents$3,019,884 $2,819,884 $200,000 
Marketable securities52,061 52,061 — 
Derivative financial instruments140,266 — 140,266 
$3,212,211 $2,871,945 $340,266 
Liabilities:
Derivative financial instruments$25,521 $— $25,521 
 June 28, 2020
Balance Level 1Level 2
Assets:
Cash equivalents$3,572,900 $3,522,900 $50,000 
Marketable securities48,725 48,725 — 
Derivative financial instruments29,057 — 29,057 
$3,650,682 $3,571,625 $79,057 
Liabilities:
Derivative financial instruments$41,419 $— $41,419 
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 $16.6 million, $17.7 million and $15.8 million at June 27, 2021, December 31, 2020 and June 28, 2020, respectively, for which the fair value adjustment was an increase of $0.6 million at June 27, 2021, and a decrease of $4.2 million and $2.6 million at December 31, 2020 and June 28, 2020, respectively. Fair value is estimated using Level 2 inputs based on the recent market values of repossessed inventory.
Fair Value of Financial Instruments Measured at Cost – The carrying value of the Company's Cash and cash equivalents and Restricted cash approximates their fair values. The fair value and carrying value of the Company’s remaining financial instruments that are measured at cost or amortized cost were as follows (in thousands):
 June 27, 2021December 31, 2020June 28, 2020
 Fair ValueCarrying ValueFair ValueCarrying ValueFair ValueCarrying Value
Assets:
Finance receivables, net$7,141,608 $6,888,954 $6,586,348 $6,443,008 $7,143,575 $6,979,991 
Liabilities:
Deposits, net$260,338 $259,373 $79,965 $79,965 $17,996 $17,996 
Debt:
Unsecured commercial paper$749,037 $749,037 $1,014,274 $1,014,274 $1,397,388 $1,397,388 
Global credit facility borrowings$— $— $— $— $150,000 $150,000 
Asset-backed U.S. commercial paper conduit facilities$291,511 $291,511 $402,205 $402,205 $540,840 $540,840 
Asset-backed Canadian commercial paper conduit facility$87,439 $87,439 $116,678 $116,678 $144,661 $144,661 
Asset-backed securitization debt$1,744,841 $1,727,522 $1,817,892 $1,791,956 $2,484,956 $2,461,107 
Medium-term notes$3,651,957 $3,476,057 $5,118,928 $4,917,714 $4,805,766 $4,784,293 
Senior notes$804,187 $744,321 $828,141 $743,977 $790,355 $743,635 
Finance Receivables, net – The carrying value of retail and wholesale finance receivables 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 are generally either short-term or have interest rates that adjust with changes in market interest rates.
Deposits, net – The carrying value of deposits is amortized cost. The fair value of deposits is estimated based upon rates currently available for deposits with similar terms and maturities. Fair value is calculated using Level 3 inputs.
Debt – The carrying value of debt is generally amortized cost, net of discounts and debt issuance costs. The fair value of unsecured commercial paper and credit facility borrowings are calculated using Level 2 inputs and approximates carrying value due to its short maturity. The fair value of debt provided under the U.S. Conduit Facilities and Canadian Conduit Facility is calculated using Level 2 inputs and approximates carrying value since the interest rates charged under the facilities are tied directly to market rates and fluctuate as market rates change. The fair values of the medium-term notes and senior notes are estimated based upon rates currently available for debt with similar terms and remaining maturities (Level 2 inputs). The fair value of the fixed-rate debt related to on-balance sheet asset-backed securitization transactions is estimated based on pricing currently available for transactions with similar terms and maturities (Level 2 inputs). The fair value of the floating-rate debt related to on-balance sheet asset-backed securitization transactions is calculated using Level 2 inputs and approximates carrying value since the interest rates charged are tied directly to market rates and fluctuate as market rates change.