PACCAR 2009 Annual Report Download - page 51

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48 Annual minimum payments due on loans and leases are as follows:
finance dealer
Beginning January 1, 2010 loans leases wholesale
2010 $ 1,123.3 $ 984.7 $ 815.3
2011 817.1 792.0 199.9
2012 525.4 527.4
2013 283.3 309.8
2014 108.0 141.3
Thereafter 18.1 82.9
$ 2,875.2 $ 2,838.1 $ 1,015.2
Included in Loans are dealer direct loans on the sale of new trucks of $143.7 and $171.6 as of December 31, 2009
and 2008. Estimated residual values included with finance leases amounted to $186.8 in 2009 and $190.6 in 2008.
Repayment experience indicates that some loan and lease receivables will be paid prior to contract maturity, while
others may be extended or revised. Experience also indicates that the majority of dealer wholesale financing will be
repaid within one year. Items included in Interest and other receivables are all due within one year. The effects of
sales-type leases, dealer direct loans and wholesale financing of new trucks are shown in the consolidated statements
of cash flows as operating activities since they finance the sale of company inventory.
E. ALLOWANCE FOR LOSSES
Allowance for losses for loans, leases and other are evaluated together as a group since they relate to a similar
customer base and their contractual terms require regular payment of principal and interest principally over 36 to
60 months and they are secured by the same type of collateral. The allowance for credit losses consists of both a
specific reserve and a general reserve.
Receivables are charged to the allowance for losses when, in the judgment of management, they are considered
uncollectible (generally upon repossession of the collateral). The provision for losses on finance, trade and other
receivables is charged to income based on management’s estimate of incurred credit losses, net of recoveries,
inherent in the portfolio.
The allowance for losses is summarized as follows:
truck financial
and other services
Balance, December 31, 2006 $ 5.7 $ 169.0
Provision for losses .2 41.0
Net charge-offs (.5) (25.8)
Acquisitions .2 1.8
Currency translation 1.9 7.4
Balance, December 31, 2007 7.5 193.4
Provision for losses (.3) 102.9
Net charge-offs (2.0) (104.8)
Currency translation (.3) (13.2)
Balance, December 31, 2008 4.9 178.3
Provision for losses 1.1 104.4
Net charge-offs (1.8) (121.8)
Currency translation .1 6.7
Balance, December 31, 2009 $ 4.3 $ 167.6
The Company’s customers are principally concentrated in the transportation industry in North America and
Europe. There are no significant concentrations of credit risk in terms of a single customer. Generally, receivables
are collateralized by the related equipment and parts.
NOTES TO CONSOLIDA T ED FINANCIAL STA T E M E NTS
December 31, 2009, 2008 and 2007 (currencies in millions)