PACCAR 2012 Annual Report Download - page 44

In December 2011, PACCAR Inc filed a shelf registration under the Securities Act of 1933. The current registration
expires in the fourth quarter of 2014 and does not limit the principal amount of debt securities that may be issued
during the period. The total amount of medium-term notes outstanding for PACCAR Inc as of December 31, 2012
was $500.0 million.
In December 2011, PACCAR’s Board of Directors approved the repurchase of $300.0 million of the Company’s
common stock and as of December 31, 2012, $192.0 million of shares have been repurchased pursuant to the
authorization.
At December 31, 2012 and December 31, 2011, the Company had cash and cash equivalents and marketable debt
securities of $1.82 billion and $1.84 billion, respectively, which are considered indefinitely reinvested in foreign
subsidiaries. The Company periodically repatriates foreign earnings that are not indefinitely reinvested. Dividends
paid by foreign subsidiaries to the U.S. parent were $.23 billion, $.33 billion and $.03 billion in 2012, 2011 and
2010, respectively. The Company believes that its U.S. cash and cash equivalents and marketable debt securities,
future operating cash flow and access to the capital markets, along with periodic repatriation of foreign earnings,
will be sufficient to meet U.S. liquidity requirements.
Truck, Parts and Other
The Company provides funding for working capital, capital expenditures, R&D, dividends, stock repurchases and
other business initiatives and commitments primarily from cash provided by operations. Management expects this
method of funding to continue in the future. Long-term debt totaled $150.0 million as of December 31, 2012.
Expenditures for property, plant and equipment in 2012 totaled $513.9 million compared to $336.4 million in 2011
as the Company increased its spending for tooling and factory equipment for new products and building a new
DAF factory in Brasil. Over the last ten years, the Company’s combined investments in worldwide capital projects
and research and development totaled $5.25 billion which have significantly increased operating capacity and
efficiency and the quality of the Company’s premium products.
Capital spending in 2013 is expected to be approximately $400 to $500 million. The capital spending will primarily relate
to completing a new DAF factory in Brasil. Spending on R&D in 2013 is expected to be $225 to $275 million. PACCAR
will continue to focus on new product programs, engine development and manufacturing efficiency improvements.
The Company conducts business in Spain, Italy, Portugal, Ireland and Greece which have been experiencing
significant financial stress. As of December 31, 2012, the Company had finance and trade receivables in these
countries of approximately 1% of consolidated total assets. As of December 31, 2012, the Company did not have any
marketable debt security investments in corporate or sovereign government securities in these countries. In addition,
the Company had no derivative counterparty credit exposures in these countries as of December 31, 2012.
Financial Services
The Company funds its financial services activities primarily from collections on existing finance receivables and
borrowings in the capital markets. The primary sources of borrowings in the capital markets are commercial paper
and medium-term notes issued in the public markets and, to a lesser extent, bank loans. An additional source of
funds is loans from other PACCAR companies.
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