| R. | SEGMENT AND RELATED INFORMATION |
PACCAR operates in three principal segments: Truck, Parts and Financial Services. The Company evaluates the performance of its Truck and Parts segments based on operating profits, which excludes investment income, other income and expense and income taxes. The Financial Services segment’s performance is evaluated based on income before income taxes. Geographic revenues from external customers are presented based on the country of the customer. The accounting policies of the reportable segments are the same as those applied in the consolidated financial statements as described in Note A.
Truck and Parts: The Truck segment includes the manufacture of trucks and the Parts segment includes the distribution of related aftermarket parts, both of which are sold through the same network of independent dealers. These segments derive a large proportion of their revenues and operating profits from operations in North America and Europe. The Truck segment incurs substantial costs to design, manufacture and sell trucks to its customers. The sale of new trucks provides the Parts segment with the basis for parts sales that may continue over the life of the truck, but are generally concentrated in the first five years after truck delivery. To reflect the benefit the Parts segment receives from costs incurred by the Truck segment, certain expenses are allocated from the Truck segment to the Parts segment. The expenses allocated are based on a percentage of the average annual expenses for factory overhead, engineering, research and development and SG&A expenses for the preceding five years. The allocation is based on the ratio of the average parts direct margin dollars (net sales less material and labor costs) to the total truck and parts direct margin dollars for the previous five years. The Company believes such expenses have been allocated on a reasonable basis. Truck segment assets related to the indirect expense allocation are not allocated to the Parts segment.
Financial Services: The Financial Services segment includes finance and leasing of primarily PACCAR products and services provided to truck customers and dealers. Revenues are primarily generated from operations in North America and Europe.
Other: Included in Other is the Company’s industrial winch manufacturing business. Also within this category are other sales, income and expense not attributable to a reportable segment, including a portion of corporate expense. Intercompany interest income on cash advances to the financial services companies is included in Other and was $.7, $.9 and $.6 for 2013, 2012 and 2011, respectively.
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Geographic Area Data |
2013 | 2012 | 2011 | |||||||||||||
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Revenues: |
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United States |
$ | 8,147.6 | $ | 8,234.8 | $ | 7,389.8 | ||||||||||
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Europe |
4,967.2 | 4,282.3 | 5,104.0 | |||||||||||||
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Other |
4,009.0 | 4,533.4 | 3,861.4 | |||||||||||||
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| $ | 17,123.8 | $ | 17,050.5 | $ | 16,355.2 | |||||||||||
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Property, plant and equipment, net: |
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United States |
$ | 1,183.1 | $ | 1,182.5 | $ | 1,059.1 | ||||||||||
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The Netherlands |
620.0 | 529.7 | 467.1 | |||||||||||||
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Other |
710.2 | 600.7 | 447.1 | |||||||||||||
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| $ | 2,513.3 | $ | 2,312.9 | $ | 1,973.3 | |||||||||||
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Equipment on operating leases, net: |
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United States |
$ | 1,153.8 | $ | 1,019.7 | $ | 871.2 | ||||||||||
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United Kingdom |
414.9 | 425.3 | 374.8 | |||||||||||||
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Germany |
404.1 | 390.8 | 350.6 | |||||||||||||
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Other |
1,355.6 | 1,052.9 | 793.2 | |||||||||||||
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| $ | 3,328.4 | $ | 2,888.7 | $ | 2,389.8 | |||||||||||
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Business Segment Data |
2013 | 2012 | 2011 | |||||||||||||
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Net sales and revenues: |
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Truck |
$ | 13,627.7 | $ | 13,797.1 | $ | 13,359.2 | ||||||||||
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Less intersegment |
(624.8 | ) | (665.6 | ) | (728.5 | ) | ||||||||||
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External customers |
13,002.9 | 13,131.5 | 12,630.7 | |||||||||||||
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Parts |
2,868.3 | 2,712.1 | 2,617.1 | |||||||||||||
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Less intersegment |
(46.1 | ) | (44.6 | ) | (40.1 | ) | ||||||||||
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External customers |
2,822.2 | 2,667.5 | 2,577.0 | |||||||||||||
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Other |
123.8 | 152.7 | 118.2 | |||||||||||||
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| 15,948.9 | 15,951.7 | 15,325.9 | ||||||||||||||
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Financial Services |
1,174.9 | 1,098.8 | 1,029.3 | |||||||||||||
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| $ | 17,123.8 | $ | 17,050.5 | $ | 16,355.2 | |||||||||||
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Income before income taxes: |
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Truck |
$ | 936.7 | $ | 920.4 | $ | 864.7 | ||||||||||
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Parts |
416.0 | 374.6 | 394.1 | |||||||||||||
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Other |
(26.5 | ) | (7.0 | ) | (26.5 | ) | ||||||||||
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| 1,326.2 | 1,288.0 | 1,232.3 | ||||||||||||||
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Financial Services |
340.2 | 307.8 | 236.4 | |||||||||||||
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Investment income |
28.6 | 33.1 | 38.2 | |||||||||||||
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| $ | 1,695.0 | $ | 1,628.9 | $ | 1,506.9 | |||||||||||
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Depreciation and amortization: |
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Truck |
$ | 352.9 | $ | 308.8 | $ | 311.8 | ||||||||||
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Parts |
5.3 | 5.9 | 6.8 | |||||||||||||
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Other |
10.2 | 10.6 | 9.2 | |||||||||||||
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| 368.4 | 325.3 | 327.8 | ||||||||||||||
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Financial Services |
442.3 | 375.6 | 346.0 | |||||||||||||
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| $ | 810.7 | $ | 700.9 | $ | 673.8 | |||||||||||
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Expenditures for long-lived assets: |
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Truck |
$ | 812.9 | $ | 816.0 | $ | 876.9 | ||||||||||
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Parts |
6.8 | 17.1 | 2.2 | |||||||||||||
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Other |
20.8 | 22.8 | 28.2 | |||||||||||||
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| 840.5 | 855.9 | 907.3 | ||||||||||||||
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Financial Services |
931.2 | 943.1 | 934.3 | |||||||||||||
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| $ | 1,771.7 | $ | 1,799.0 | $ | 1,841.6 | |||||||||||
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Segment assets: |
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Truck |
$ | 5,123.3 | $ | 4,530.2 | $ | 4,043.9 | ||||||||||
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Parts |
748.4 | 707.8 | 641.4 | |||||||||||||
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Other |
298.5 | 198.4 | 185.3 | |||||||||||||
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Cash and marketable securities |
2,925.2 | 2,395.9 | 2,900.7 | |||||||||||||
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| 9,095.4 | 7,832.3 | 7,771.3 | ||||||||||||||
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Financial Services |
11,630.1 | 10,795.5 | 9,401.4 | |||||||||||||
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| $ | 20,725.5 | $ | 18,627.8 | $ | 17,172.7 | |||||||||||
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