PACCAR 2012 Annual Report Download - page 65

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N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2012, 2011 and 2010 (currencies in millions)
During the period the loans above were considered impaired, interest income recognized on a cash basis is as
follows:
2012 2011 2010
Interest income recognized:
Wholesale $ .1 $ .4 $ .1
Fleet 1.2 2.7 1.7
Owner/Operator .8 2.0 .2
$ 2.1 $ 5.1 $ 2.0
Credit Quality: The Company’s customers are principally concentrated in the transportation industry in North
America, Europe and Australia. The Company’s portfolio is diversified over a large number of customers and dealers
with no single customer or dealer balances representing over 4% of the total portfolio. The Company retains as
collateral a security interest in the related equipment.
At the inception of each contract, the Company considers the credit risk based on a variety of credit quality factors
including prior payment experience, customer financial information, credit-rating agency ratings, loan-to-value
ratios and other internal metrics. On an ongoing basis, the Company monitors credit quality based on past-due
status and collection experience as the Company has found a meaningful correlation between the past due status of
customers and the risk of loss.
The Company has three credit quality indicators: performing, watch and at-risk. Performing accounts pay in accordance
with the contractual terms and are not considered high risk. Watch accounts include accounts 31 to 90 days past due
and large accounts that are performing but are considered to be high-risk. Watch accounts are not impaired. At-risk
accounts are accounts that are impaired, including TDRs, accounts over 90 days past-due and other accounts on
non-accrual status. The Company uses historical data and known trends to categorize each credit quality indicator.
The tables below summarize the Company’s finance receivables by credit quality indicator and portfolio class.
RETAIL CUSTOMER
OWNER/ RETAIL
At December 31, 2012 WHOLESALE FLEET OPERATOR DEALER TOTAL
Performing $ 1,479.1 $ 3,878.4 $ 1,365.6 $ 1,423.3 $ 8,146.4
Watch 58.3 23.5 10.7 6.3 98.8
At-risk 3.6 54.7 12.7 .1 71.1
$ 1,541.0 $ 3,956.6 $ 1,389.0 $ 1,429.7 $ 8,316.3
retail customer
owner/ retail
At December 31, 2011 wholesale fleet operator dealer total
Performing $ 1,460.6 $ 3,051.7 $ 1,361.0 $ 1,211.1 $ 7,084.4
Watch 38.0 28.5 13.7 8.7 88.9
At-risk 18.4 76.1 19.5 .4 114.4
$ 1,517.0 $ 3,156.3 $ 1,394.2 $ 1,220.2 $ 7,287.7
The tables below summarize the Company’s finance receivables by aging category. In determining past due status,
the Company considers the entire contractual account balance past due when any installment is over 30 days past
due. Substantially all customer accounts that were greater than 30 days past due prior to credit modification became
current upon modification for aging purposes.