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PACCAR Inc and Subsidiaries
47
C. INVENTORIES
Inventories include the following:
At December 31, 2009 2008
Finished products $ 312.5 $ 394.3
Work in process and raw materials 487.5 421.7
800.0 816.0
Less LIFO reserve (167.9) (157.9)
$ 632.1 $ 658.1
Inventories are stated at the lower of cost or market. Cost of inventories in the United States is determined principally
by the last-in, first-out (LIFO) method. Cost of all other inventories is determined principally by the first-in, first-out
(FIFO) method. Inventories valued using the LIFO method comprised 58% and 52% of consolidated inventories
before deducting the LIFO reserve at December 31, 2009 and 2008.
D. FINANCE AND O THER RECEIVABLES
Finance and other receivables include the following:
At December 31, 2009 2008
Loans $ 2,875.2 $ 3,506.7
Retail direct financing leases 2,260.0 2,558.4
Sales-type finance leases 764.9 817.9
Dealer wholesale financing 1,015.2 1,635.0
Interest and other receivables 109.6 127.3
Unearned interest: Finance leases (359.6) (430.6)
6,665.3 8,214.7
Less allowance for losses (see Note E)
Loans, leases and other (157.1) (167.1)
Dealer wholesale (10.5) (11.2)
$ 6,497.7 $ 8,036.4
Loans represent fixed- or floating-rate loans to customers collateralized by the vehicles purchased. Retail direct
financing and sales-type finance leases are contracts that lease equipment to retail customers and dealers, respectively.
These leases are reported as the sum of minimum lease payments receivable and estimated residual value of the
property subject to the contracts, reduced by unearned interest on finance leases which is shown separately. Dealer
wholesale financing represents floating-rate wholesale loans to PACCAR dealers for new and used trucks. The loans
are collateralized by the trucks being financed. Interest and other receivables are interest due on loans and leases
and other amounts due in the normal course of business.
NOTES TO CONSOLIDATED F INANCIAL STATEMENTS
December 31, 2009, 2008 and 2007 (currencies in millions)