PACCAR 2012 Annual Report Download - page 32

Download and view the complete annual report

Please find page 32 of the 2012 PACCAR annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 94

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94

 The increase in PFS revenues to $1.10 billion in 2012 from $1.03 billion in 2011 primarily resulted from higher
average earning asset balances, partially offset by lower yields. PFS income before income taxes increased to
$307.8 million in 2012 compared to $236.4 million in 2011 primarily due to higher finance margin as noted
below and a lower provision for losses on receivables.
The major factors for the change in interest and fees, interest and other borrowing expenses and finance margin for
the year ended December 31, 2012 are outlined in the table below:
INTEREST AND
INTEREST OTHER BORROWING FINANCE
($ in millions) AND FEES EXPENSES MARGIN
2011 $ 423.1 $ 181.3 $ 241.8
Increase (decrease)
Average finance receivables 87.5 87.5
Average debt balances 37.6 (37.6)
Yields (51.7) (51.7)
Borrowing rates (57.8) 57.8
Currency translation (5.2) (2.7) (2.5)
Total increase (decrease) 30.6 (22.9) 53.5
2012 $ 453.7 $ 158.4 $ 295.3
• Average finance receivables increased $1.43 billion (excluding foreign currency effects of $150.1 million) from an
increase in retail portfolio new business volume exceeding repayments and an increase in dealer wholesale
financing, primarily in the U.S. and Canada.
• Average debt balances increased $1.64 billion (excluding foreign currency effects of $139.1 million) in 2012 and
included increased medium-term note funding. The higher average debt balances reflect funding for a higher
average finance receivable portfolio.
• Lower market rates resulted in lower portfolio yields (5.7% in 2012 and 6.5% in 2011) and lower borrowing
rates (2.2% in 2012 and 3.1% in 2011).
• Currency translation variances primarily reflect a decrease in the value of the euro compared to the U.S. dollar.
The following table summarizes operating lease, rental and other income and depreciation and other expense:
($ in millions)
Year Ended December 31, 2012 2011
Operating lease revenues $ 585.9 $ 567.0
Used truck sales and other 59.2 39.2
Operating lease, rental and other income $ 645.1 $ 606.2
Depreciation on operating lease $ 369.9 $ 346.6
Vehicle operating expenses 97.0 103.2
Cost of used truck sales and other 50.5 26.4
Depreciation and other $ 517.4 $ 476.2