PACCAR 2011 Annual Report Download - page 38

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 The major factors for the change in operating lease, rental and other income, depreciation and other expense and lease
margin for the year ended December 31, 2010 are outlined in the table below:
OPERATING LEASE, RENTAL DEPRECIATION LEASE
($ in millions) AND OTHER INCOME AND OTHER MARGIN
2009 $ 508.0 $ 456.1 $ 51.9
Increase (decrease)
Operating lease impairments (23.9) 23.9
Results on returned lease assets (16.3) 16.3
Used trucks taken on trade package 12.7 12.6 .1
Average operating lease assets 3.4 2.9 .5
Revenue and cost per asset 29.7 27.4 2.3
Currency translation (5.6) (4.6) (1.0)
Insurance and other (2.0) (2.6) .6
Total increase (decrease) 38.2 (4.5) 42.7
2010 $ 546.2 $ 451.6 $ 94.6
•฀ ฀Operating฀lease฀impairments฀decreased฀$23.9฀million฀in฀2010฀due฀to฀improving฀used฀truck฀prices฀($17.5฀million)฀
and fewer losses on repossessed operating lease equipment ($6.4 million).
•฀ ฀Results฀on฀sales฀of฀trucks฀returned฀from฀leases฀improved฀$16.3฀million฀in฀2010฀also฀reflecting฀higher฀used฀truck฀
prices as a result of the increased demand for used trucks in an improving global economy.
•฀ ฀The฀$12.7฀million฀increase฀in฀trucks฀taken฀on฀trade฀and฀associated฀cost฀of฀$12.6฀million฀are฀due฀to฀an฀increase฀in฀
the volume of trucks sold.
•฀ ฀Higher฀average฀operating฀lease฀assets฀in฀2010฀($21.3฀million)฀increased฀income฀by฀$3.4฀million฀and฀related฀
depreciation on operating leases by $2.9 million.
•฀ ฀Higher฀truck฀market฀demand฀resulted฀in฀an฀increase฀in฀revenues฀per฀asset฀in฀2010฀of฀$29.7฀million.฀The฀increase฀
in revenue consisted of higher asset utilization (the proportion of available operating lease units that are being
leased) of $13.5 million, higher lease rates of $10.7 million and higher fuel and service revenue of $5.5 million.
•฀ ฀The฀2010฀increase฀in฀costs฀per฀asset฀of฀$27.4฀million฀is฀due฀to฀higher฀vehicle฀operating฀expenses,฀including฀
higher fuel costs and variable costs from higher asset utilization levels.
The following table summarizes the provision for losses on receivables and net charge-offs.
($ in millions)
2010 2009
PROVISION FOR PROVISION FOR
NET LOSSES ON NET LOSSES ON
CHARGE-OFFS RECEIVABLES CHARGE-OFFS RECEIVABLES
U.S. and Canada $ 35.7 $ 21.0 $ 63.1 $ 49.0
Europe 27.2 20.9 30.8 28.8
Mexico and Australia 20.4 19.1 14.3 13.0
$ 83.3 $ 61.0 $ 108.2 $ 90.8