PACCAR 2011 Annual Report Download - page 59

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
C. INVENTORIES
Inventories include the following:
At December 31, 2011 2010
Finished products $ 436.2 $ 370.1
Work in process and raw materials 439.6 322.2
875.8 692.3
Less LIFO reserve (165.4) (158.3)
$ 710.4 $ 534.0
Inventories valued using the LIFO method comprised 45% and 38% of consolidated inventories before deducting
the LIFO reserve at December 31, 2011 and 2010, respectively. During 2010, inventory quantities declined which
provided a pretax favorable income effect from the liquidation of LIFO inventory of $15.0.
D. FINANCE AND OTHER RECEIVABLES
Finance and other receivables include the following:
At December 31, 2011 2010
Loans $ 3,114.8 $ 2,713.9
Retail direct financing leases 2,187.8 2,005.0
Sales-type finance leases 795.8 703.6
Dealer wholesale financing 1,517.1 983.4
Interest and other receivables 111.0 109.3
Unearned interest: Finance leases (327.8) (299.3)
$7,398.7 $6,215.9
Less allowance for losses:
Loans, leases and other (127.3) (137.5)
Dealer wholesale financing (11.7) (7.5)
$ 7,259.7 $ 6,070.9
The net activity of sales-type finance leases, dealer direct loans and dealer wholesale financing on new trucks is
shown in the operating section of the Consolidated Statements of Cash Flows since those receivables finance the
sale of Company inventory.
Annual minimum payments due on finance receivables are as follows:
FINANCE
LOANS LEASES
2012 $ 1,108.9 $ 908.7
2013 800.1 685.4
2014 574.5 511.5
2015 394.8 352.6
2016 208.8 219.3
Thereafter 27.7 96.7
$ 3,114.8 $ 2,774.2
Estimated residual values included with finance leases amounted to $209.4 in 2011 and $165.3 in 2010. Experience
indicates the majority of dealer wholesale financing will be repaid within one year. In addition, repayment
experience indicates that some loans, leases and other finance receivables will be paid prior to contract maturity,
while others may be extended or modified.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011, 2010 and 2009 (currencies in millions)