PACCAR 2009 Annual Report Download - page 36

PACCAR Inc and Subsidiaries
The change in cash and cash equivalents is summarized below.
For Years Ended December 31 2009 2008 2007
Operating Activities:
Net Income $ 111.9 $ 1,017.9 $ 1,227.3
Net income items not affecting cash 874.3 882.2 589.3
Changes in operating assets and liabilities 387.1 (595.2) 238.8
Net cash provided by operating activities 1,373.3 1,304.9 2,055.4
Net cash provided by (used in) investing activities 310.6 (251.9) (1,296.8)
Net cash used in financing activities (1,816.2) (868.1) (838.5)
Effect of exchange rate changes on cash 89.1 (87.8) 85.5
Net (decrease) increase in cash and cash equivalents (43.2) 97.1 5.6
Cash and cash equivalents at beginning of the year 1,955.2 1,858.1 1,852.5
Cash and cash equivalents at end of the year $ 1,912.0 $ 1,955.2 $ 1,858.1
2009 Compared to 2008:
Operating activities: The Company’s operating cash flow increased $68.4 million compared to 2008. A decrease in
net income of $906.0 million was more than offset by a reduction in receivables of $1,135.6 million primarily
related to $888.1 million of higher collections of wholesale receivables reflecting a reduction in funding of dealer
new truck inventory, predominately in Europe. In addition there was a reduction of trade receivables of $218.7
million as a result of lower sales levels.
Investing activities: Cash provided by investing activities increased by $562.5 million to $310.6 million in 2009
compared to 2008. Cash was provided by a larger decrease in the retail loan and lease portfolio of $539.8 million as
collections on outstanding balances exceeded net new loan and lease volume reflecting lower new truck sales.
Investments in capital equipment decreased $579.0 million, primarily due to reduced expenditures related to the
current economic environment offset by $614.9 million of lower cash provided by net purchases and sales of
marketable securities compared to 2008.
Financing activities: The cash used in financing activities increased $948.1 million to $1,816.2 million in 2009 due
to higher net debt repayments of $1,601.7 million related to lower funding needed to finance a smaller financial
services asset base. This was partially offset by no stock repurchases in 2009 compared to $230.6 million in 2008
and a lower dividend of $232.1 million compared to $629.2 million in 2008.
2008 Compared to 2007:
Operating activities: The Company’s operating cash flow of $1,304.9 million decreased $750.5 million compared to
2007. Net income in 2008 of $1,017.9 million decreased by $209.4 million compared to 2007. This was more than
offset by a $292.9 million increase relating to net income items not affecting cash to $882.2 million in 2008. This is
mainly from increased depreciation on higher depreciable assets and higher deferred taxes related to tax incentive
depreciation in the U.S. Changes in operating assets and liabilities were a net cash outflow in 2008 of $595.2 million
compared to an inflow of $238.8 million in 2007. The change of $834.0 million was due in part to purchasing
finished goods to secure inventory from a supplier exiting the business. In addition, $246.3 million of cash was used
for increased funding of dealer inventory by the Company’s Financial Services segment primarily in Europe due to
the abrupt market slowdown in the fourth quarter compared to a reduction of $81.3 million in 2007.
Investing activities: Cash used in investing activities decreased to $251.9 million in 2008 from $1,296.8 million in
2007. The Company liquidated $572.1 million of its marketable debt securities portfolio to improve liquidity due to
the more difficult credit markets. The Financial Services segment experienced lower new loan and lease originations
from lower demand for truck financing.
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