PACCAR 2011 Annual Report Download - page 32

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 The major factors for the changes in operating lease, rental and other income, depreciation and other expense and lease
margin for the year ended December 31, 2011 are outlined in the table below:
OPERATING LEASE, RENTAL DEPRECIATION LEASE
($ in millions) AND OTHER INCOME AND OTHER MARGIN
2010 $ 546.2 $ 451.6 $ 94.6
Increase (decrease)
Operating lease impairments (3.8) 3.8
Results on returned lease assets (19.5) 19.5
Average operating lease assets 34.3 27.8 6.5
Revenue and cost per asset 21.8 17.6 4.2
Currency translation and other 3.9 2.5 1.4
Total increase 60.0 24.6 35.4
2011 $ 606.2 $ 476.2 $ 130.0
•฀ ฀The฀decrease฀in฀operating฀lease฀impairments฀and฀improved฀results฀on฀trucks฀returned฀from฀leases฀in฀2011฀reflect฀
higher฀used฀truck฀prices.฀
•฀ ฀Average฀operating฀lease฀assets฀increased฀$214.3฀million฀in฀2011,฀which฀increased฀income฀by฀$34.3฀million฀and฀
related depreciation on operating leases by $27.8 million, as a result of higher volume of equipment placed in
service reflecting higher demand for leased vehicles.
•฀ ฀Higher฀truck฀transportation฀demand฀also฀resulted฀in฀an฀increase฀in฀revenues฀per฀asset฀in฀2011.฀The฀increase฀in฀
revenue consisted of higher asset utilization (the proportion of available operating lease units that are being leased)
of $4.4 million, higher lease rates of $13.5 million and higher fuel and service revenue of $3.9 million. The 2011
increase in costs per asset of $17.6 million is due to higher vehicle operating expenses, including higher fuel costs
and variable costs from higher asset utilization levels.
The following table summarizes the provision for losses on receivables and net charge-offs:
($ in millions) 2011 2010
PROVISION FOR PROVISION FOR
NET LOSSES ON NET LOSSES ON
CHARGE-OFFS RECEIVABLES CHARGE-OFFS RECEIVABLES
U.S. and Canada $ 6.7 $ 3.8 $ 35.7 $ 21.0
Europe 15.3 17.9 27.2 20.9
Mexico and Australia 23.0 19.7 20.4 19.1
$ 45.0 $ 41.4 $ 83.3 $ 61.0
The provision for losses on receivables for 2011 declined $19.6 million compared to 2010 due to generally improving
economic conditions which have improved the profitability and cash flow for many of the Company’s customers in
the transportation industry, particularly in the U.S. and Canada.
At December 31, 2011 2010
Percentage of retail loan and lease accounts 30+ days past-due:
U.S. and Canada 1.1% 2.1%
Europe 1.0% 2.5%
Mexico and Australia 3.4% 5.8%
Total 1.5% 3.0%