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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1993
Commission File No. 0-12553
PACCAR FINANCIAL CORP.
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(Exact name of Registrant as specified in its charter)
Washington 91-6029712
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(State of Incorporation) (I.R.S. Employer Identification No.)
777 - 106th Avenue N.E., Bellevue, Washington 98004
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (206) 462-4100
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Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for at least the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 1, 1994:
None
The number of shares outstanding of the registrant's classes of common stock as
of March 1, 1994:
Common Stock, $100 par value -- 145,000 shares
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THE REGISTRANT IS A WHOLLY OWNED SUBSIDIARY OF PACCAR INC AND MEETS THE
CONDITIONS SET FORTH IN GENERAL INSTRUCTION (J)(1)(a) AND (b) OF FORM 10-K AND
IS, THEREFORE, FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
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PART I
ITEM 1. BUSINESS
GENERAL
PACCAR Financial Corp.
PACCAR Financial Corp. (the "Company"), a wholly owned subsidiary of
PACCAR Inc ("PACCAR"), is a Washington corporation organized in 1961 to finance
the sale of PACCAR products. The Company provides retail financing and leasing
of trucks and related equipment manufactured primarily by PACCAR and sold
through PACCAR's independent dealers in the United States. The Company also
finances dealer inventories of transportation equipment.
PACCAR Inc
PACCAR is a multi-national company which designs and manufactures
various types of industrial equipment that are marketed primarily through its
dealers. Class 8 heavy-duty diesel trucks (gross vehicle weight in excess of
33,000 pounds) and related service parts are the principal products of PACCAR
and accounted for 88% of PACCAR's total revenues in 1993. PACCAR markets these
trucks under the "Kenworth," "Peterbilt" and "Foden" nameplates. They are
manufactured in five plants in the United States. Outside of the U.S., the
Company manufactures and sells through wholly owned subsidiary companies in
Canada and Australia, through a United Kingdom branch of a wholly owned U.S.
subsidiary and through an affiliate in Mexico. PACCAR also manufactures
medium-duty trucks in Canada which are distributed in the United States and
Canada. Other PACCAR products include industrial winches and oilfield
equipment. PACCAR competes in the truck parts aftermarket primarily through
its dealer network and also sells general automotive parts and accessories
through retail outlets.
In the United States, Kenworth and Peterbilt trucks are sold to an
independent dealer network, consisting of 310 outlets, for resale to retail
purchasers. Trucks manufactured in the United States for export are marketed
by a division of PACCAR through an international dealer network.
In addition to the Company, which provides financing and leasing in
the United States, four other subsidiaries of PACCAR offer similar financing
programs for PACCAR products in Canada, Australia and the United Kingdom.
As of December 31, 1993, PACCAR and its subsidiaries had total assets
of $3.3 billion and stockholders' equity of $1.1 billion. For the year ended
December 31, 1993, PACCAR's consolidated revenues and net income were $3.6
billion and $142.2 million respectively.
There were six principal competitors, including PACCAR, in the United
States Class 8 truck market in 1993. Based on 1993 industry registration
statistics, PACCAR's Kenworth and Peterbilt combined truck sales accounted for
approximately 22% of domestic Class 8 new truck registrations. The domestic
heavy-duty truck market is highly competitive in price, quality and service.
PACCAR is not dependent on any single customer for its sales.
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PACCAR's common stock, $12 par value, is traded in the over-the-
counter market under the NASDAQ symbol "PCAR." PACCAR is subject to the
informational requirements of the Securities Exchange Act of 1934 and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). All reports, proxy statements and
other information filed by PACCAR with the Commission may be inspected and
copied at the Public Reference Section of the Commission at 450 Fifth Street
NW, Washington, D.C. 20549.
BUSINESS OF THE COMPANY
The Company operates primarily in one industry segment, truck and
related equipment financing. The Company provides retail, inventory and lease
financing for dealers selling Kenworth and Peterbilt trucks in the United
States. In addition, the Company provides financing for dealers for new Class
6, 7 and 8 trucks and used trucks, regardless of make or model. Financing is
also provided for truck trailers and allied equipment such as mixer and dump
bodies attached to the truck.
The Company currently conducts business with most PACCAR dealers. The
volume of the Company's business is significantly affected by PACCAR's sales
and competition from other financing sources.
As of December 31, 1993, the Company employed 224 full-time employees,
none of whom are represented by a collective bargaining agent. The Company
considers relations with its employees to be good.
The Company's Products
The receivables acquired in the Company's retail financing activities
include retail installment obligations of purchasers of new and used trucks and
related equipment (the "Retail Contracts") and loan obligations of dealers
secured by retail installment contracts originated and owned by those dealers
(the "Pledge Line Contracts"). The Company provides financing of dealer
inventories for new and used trucks and related equipment (the "Wholesale
Contracts"). The Company's leases to customers are classified as direct
financing or operating leases (the "Leases").
Retail Receivables
Retail Contracts. The Company purchases contracts from dealers and
receives assignments of the contracts and a first lien security interest in
the vehicles financed. Collateral for vehicles sold to leasing companies may
also include an assignment of leases and rentals due thereunder. Retail
Contracts purchased by the Company have fixed or floating interest rates. At
December 31, 1993, approximately 80% in principal amount of the Retail
Contracts outstanding had fixed interest rates. At December 31, 1993,
approximately 82% of the Company's Retail Contracts outstanding were for sales
of new equipment.
Pledge Line Contracts
These contracts are an alternative form of retail financing offered to
selected dealers for new and used trucks. Retail installment contracts
originated by the dealer for new or used trucks and meeting the Company's
requirements as to form, terms and creditworthiness for Retail Contracts, are
pledged to the Company as collateral for direct, fixed or floating interest
rate, full recourse loans by the Company to the dealer.
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Wholesale Contracts
The Company currently provides wholesale financing for new and used
truck and trailer inventories for dealers. Wholesale Contracts are secured by
the inventories financed. The amount of credit extended by the Company for
each truck is generally limited to the invoice price of new equipment and to
the wholesale value of used equipment. At December 31, 1993, approximately 81%
of the Company's Wholesale Contracts were for the financing of new equipment.
Interest under Wholesale Contracts is based upon floating rates.
Leases
The Company offers lease contracts where it is treated as the owner of
the equipment for tax purposes and generally retains the tax depreciation. The
lessee is responsible for the payment of property and sales taxes, licenses,
maintenance and other operating items. The lessee is obligated to maintain the
equipment, to return it to the Company in good repair and to insure the
equipment against casualty losses.
Most of the Company's lease contracts contain a Terminal Rental
Adjustment Clause (TRAC) which requires the lessee to guarantee to the Company
a stated residual value upon disposition of the equipment at the end of the
lease term.
Insurance
In 1993, the Company initiated a property damage insurance program
offered through PACCAR dealers who are licensed insurance agents. The Company
retains the premium revenue and loss exposure for the policies which are issued
by an unrelated insurance carrier. In 1993, these activities were immaterial
to the Company's results.
CUSTOMER CONCENTRATION, PAST DUE ACCOUNTS AND LOSS EXPERIENCE
Customer Concentration
At December 31, 1993, the largest single retail or lease customer
represented 1.7% of the Company's net receivables, and the five largest such
accounts amounted to 6.4% of net receivables.
With respect to wholesale financing, at December 31, 1993, the largest
single dealer accounted for .8% of the Company's net receivables and the five
largest dealers collectively accounted for 2.2% of net receivables.
At December 31, 1993, the largest Pledge Line dealer borrowing
amounted to 6.5% of the Company's net receivables and the five largest dealer
notes under Pledge Line Contracts amounted to 11.1% of net receivables. Pledge
Line Contracts are secured by numerous retail installment contracts which
offset the amount of dealer concentration.
Past Due Retail Contract Receivables and Allowance for Losses
An account is considered past due by the Company if any portion of an
installment is due and unpaid for more than 30 days. In periods of adverse
economic conditions, past due levels, repossessions and losses generally
increase.
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The Company maintains an allowance for losses on receivables at a
level which it considers to be adequate based on management's estimates of
future losses. The following table summarizes the activity in the Company's
allowance for losses on receivables and presents related ratios:
Allowance for Losses
(Thousands of Dollars)
Year Ended December 31
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1993 1992 1991
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Balance at Beginning of Period $21,840 $21,840 $21,840
Add: Provision for Losses 6,079 8,611 21,237
Less: Losses Net of Recoveries (3,919) (8,611) (21,237)
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Balance at End of Period $24,000 $21,840 $21,840
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Ratios:
Net credit losses to average net receivables
and equipment on operating leases .30% .77% 1.92%
Allowance for losses to period end net
receivables and equipment on operating leases 1.59% 1.85% 1.97%
Period end gross retail contracts and leases
past due (over 60 days) to period end gross
retail contracts and lease receivables .40% 1.49% 2.39%
For discussion of the allowance for losses and past due receivables,
see "Management's Discussion and Analysis of Financial Condition and Results of
Operations, 1991-1993."
COMPETITION AND ECONOMIC FACTORS
The truck financing business is highly competitive among banks,
commercial finance companies, captive finance companies and leasing companies.
Many of these institutions have substantially greater financial resources than
the Company and may occasionally borrow funds at lower rates.
The dealers are the primary source of contracts acquired by the
Company. However, dealers are not required to obtain financing from the
Company, and they have a variety of other sources which may be used for
wholesale and customer retail financing of trucks. Retail purchasers also have
a variety of sources available to finance truck purchases.
The ability of the Company to compete in its market is principally
based on the rates and terms which the Company offers dealers and retail
purchasers, as well as the specialized services it provides. Rates and terms
are based on the Company's desire to provide flexible financing which meets
dealer and customer financing needs, the ability of the Company to borrow funds
at competitive rates and the Company's need to earn an adequate return on its
invested capital. The Company's business is also affected by changes in market
interest rates, which in turn are related to general economic conditions,
demand for credit, inflation and governmental policies. Seasonality is not a
significant factor in the Company's business.
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The volume of receivables available to be acquired by the Company from
dealers is largely dependent upon the number of Kenworth and Peterbilt trucks
sold. Domestic sales of heavy-duty trucks depend on the capital equipment
requirements of the transportation industry, which in turn is influenced by
economic growth and cyclical variations in the economy. Heavy-duty truck sales
are also sensitive to economic factors such as fuel costs, interest rates,
federal excise and highway use taxes and taxation of the acquisition and use of
capital goods.
REGULATIONS AND SIMILAR MATTERS
In certain states, the Company is subject to retail installment sales
or installment loan statutes and related regulations, the terms of which vary
from state to state. These laws may require the Company to be licensed as a
sales finance company and may regulate disclosure of finance charges and other
terms of retail installment contracts. The Company is also subject to some of
the provisions of federal law relating to discrimination in the granting of
credit.
SOURCES OF FUNDS
The operations of the Company have been financed by short-term
indebtedness (including commercial paper and bank loans), term indebtedness
(primarily publicly offered medium-term notes), retained earnings plus equity
investments from PACCAR. The Company's profitable acquisition of additional
receivables is dependent upon its ability to raise funds at competitive rates
in the private and public debt markets.
In order to minimize its exposure to fluctuations in interest rates,
the Company generally seeks to borrow funds with interest rate characteristics
similar to the characteristics of its receivables and leases. The Company also
reduces its interest rate risk and cost by entering into interest rate
contracts. See "Note E--Term Debt" in the Notes to Financial Statements for
information regarding interest rate contracts. Other considerations which
affect the Company's funding operations include the amount of fixed and
variable rate receivables, the maturity schedule of existing debt, the
availability of desired debt maturities and the level of interest rates.
As of December 31, 1993, PACCAR and the Company together had $265.0
million of unused, confirmed bank lines of credit that are reviewed annually
for renewal. These lines are maintained primarily to support the Company's
short-term borrowings. Neither PACCAR nor the Company is liable for the
borrowings of the other.
As of December 31, 1993, the Company had $624.1 million of term debt
outstanding, $220.8 million of which was due within 12 months. See "Note
E--Term Debt" in the Notes to Financial Statements for term debt maturities.
An indenture of the Company dated as of December 1, 1983 as amended by
a first supplemental indenture dated June 19, 1989 (Exhibit 4.1), with respect
to the Company's term debt which is publicly issued from time to time, contains
restrictions limiting secured debt which may be incurred by the Company and any
subsidiary.
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RELATIONSHIP WITH PACCAR
General
The operations of the Company are fundamentally affected by its
relationship with PACCAR. Sales of PACCAR products are the Company's principal
source of financing business. The Company also receives administrative support
and may occasionally borrow funds from PACCAR. Since the majority of the
directors of the Company are executives of PACCAR and PACCAR is the sole owner
of the Company's outstanding voting common stock, PACCAR can determine the
course of the Company's business. See "Note D--Transactions with PACCAR" in
the Notes to Financial Statements.
Support Agreement
The Company and PACCAR are parties to a Support Agreement which
obligates PACCAR to provide, when required, financial assistance to the Company
to assure that the Company maintains a ratio of net earnings available for
fixed charges to fixed charges (as defined) of at least 1.25 to 1 for any
fiscal year. The Support Agreement also requires PACCAR to own, directly or
indirectly, all outstanding voting stock of the Company. The required ratio
for the years ended December 31, 1993, 1992, 1991 and 1989 was met without
assistance. In order to maintain the ratio of 1.25 to 1 in 1990, PACCAR
provided earnings support of $7.3 million by assuming $4.5 million of the
Company's interest expense and forgiving $2.8 million in administrative service
charges.
The Company and PACCAR may amend or terminate any or all of the
provisions of the Support Agreement upon 30 days notice, with copies of the
notice being sent to all nationally recognized statistical rating organizations
("NRSROs") which have issued ratings with respect to debt of the Company
("Rated Debt"). Such amendment or termination will be effective only if (i)
two NRSROs confirm in writing that their ratings with respect to any Rated Debt
would remain the same after such amendment or termination, or (ii) the notice
of amendment or termination provides that the Support Agreement will continue
in effect with respect to Rated Debt outstanding on the effective date of such
amendment or termination unless such debt has been paid or defeased pursuant to
the indenture or other agreement applicable to such debt, or (iii) the holders
of at least two-thirds of the aggregate principal amount of all outstanding
Rated Debt with an original maturity in excess of 270 days consent in writing
to such amendment or termination, provided that the holders of Rated Debt
having an original maturity of 270 days or less shall continue to have the
benefit of the Support Agreement until the maturity of such debt.
The Support Agreement expressly states that PACCAR's commitments to
the Company thereunder do not constitute a PACCAR guarantee of payment of any
indebtedness or liability of the Company to others and do not create rights
against PACCAR in favor of persons other than the Company. There are no
guarantees, direct or indirect, by PACCAR of payment of any indebtedness of the
Company.
ITEM 2. PROPERTIES
The Company's principal office is located in the corporate
headquarters building of PACCAR (owned by PACCAR) at 777 - 106th Avenue N.E.,
Bellevue, Washington 98004.
Other offices of the Company are located in leased premises. Annual
lease rentals for offices in the aggregate are not material in relation to
expenses as a whole.
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ITEM 3. LEGAL PROCEEDINGS
The Company is a party to various routine legal proceedings incidental
to its business involving the collection of accounts and other matters. The
Company does not consider such matters to be material with respect to the
business or financial condition of the Company as a whole.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
All outstanding common stock is owned by PACCAR; therefore, there is
no trading market in the common stock.
To date, the Company has never declared or paid cash dividends on its
common or preferred stock.
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ITEM 6. SELECTED FINANCIAL DATA
The following table summarizes selected financial data for the Company
and should be read in conjunction with the more detailed financial statements
included under "Financial Statements and Supplementary Data." The information
with respect to each of the five years in the period ended December 31, 1993
has been derived from the Company's audited financial statements.
Balance Sheet Data and Income Statement Data
(Thousands of Dollars)
As of December 31
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Balance Sheet Data 1993 1992 1991 1990 1989
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Total Assets $1,493,880 $1,169,139 $1,106,522 $1,201,298 $1,275,676
Short-Term Debt 524,211 455,533 436,559 420,100 458,951
Term Debt 624,100 384,500 349,700 459,503 473,392
Stockholder's Equity 226,750 208,437 196,740 181,852 177,780
Income Statement Data Year Ended December 31
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Gross Income $ 116,022 $ 109,490 $ 121,136 $ 141,754 $ 147,166
Interest Expense 45,815 48,914 62,520 79,505 84,870
Depreciation Expense 10,432 10,201 10,669 12,535 11,354
Operating and Other Expenses 23,247 23,119 21,056 22,337 19,470
Loss Provision Expense 6,079 8,611 21,237 28,579 8,919
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Income (Loss) Before Support 30,449 18,645 5,654 (1,202) 22,553
Earnings Support (1) - - - 7,290 -
---------- ---------- ---------- ---------- ----------
Income Before Taxes and
Cumulative Effect of
Change in Accounting
Method 30,449 18,645 5,654 6,088 22,553
Income Taxes 13,446 6,948 2,089 2,016 7,925
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Income Before Cumulative
Effect of Change in
Accounting Method 17,003 11,697 3,565 4,072 14,628
Cumulative Effect of
Change in Accounting
Method (2) - - 11,323 - -
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Net Income $ 17,003 $ 11,697 $ 14,888 $ 4,072 $ 14,628
========== ========== ========== ========== ==========
Ratio of Earnings to Fixed
Charges (3) 1.66x 1.38x 1.09x 1.08x 1.26x
(1) In 1990, PACCAR provided earnings support of $7.3 million through the
assumption of $4.5 million of the Company's interest expense and the
forgiveness of $2.8 million in administrative service charges. (See
"Relationship with PACCAR.")
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(2) Effective January 1, 1991, the Company adopted Financial Accounting
Standards Board Statement (FASB) No. 96, "Accounting for Income
Taxes." The most significant impact of this Statement was to change
the tax rate at which deferred taxes were recognized on the balance
sheet to the lower rate then specified by federal tax laws. The
change resulted in a one-time increase in net income of $11,323 in the
first quarter of 1991.
(3) For purposes of this ratio, earnings consist of income from operations
plus fixed charges. Fixed charges consist of interest expense plus
one-third of rent expense (which is deemed representative of an
interest factor). The method of computing the ratio of earnings to
fixed charges shown above complies with SEC reporting requirements but
differs from the method called for in the Support Agreement between
the Company and PACCAR. The ratios computed pursuant to the Support
Agreement were 1.89x, 1.59x, 1.26x, 1.25x and 1.40x for the years
1993-1989, respectively. See Exhibits 12.1 and 12.2.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, 1991-1993
Results of Operations
1993 Compared to 1992:
Pre-tax earnings increased to $30.4 million from $18.6 million in 1992
primarily as a result of higher income attributable to the growth in
receivables as well as a lower provision for losses. Average receivables
increased $185 million (16%) to $1.3 billion from $1.1 billion in 1992. The
growth resulted from record high new business volume of $850 million in 1993
related to increased heavy-duty truck sales by PACCAR. While total debt
increased to fund the growth in assets, interest expense decreased due to the
general decline in interest rates during 1993. Operating and other expenses
remained relatively stable.
The 1993 loss provision of $6.1 million, compared to $8.6 million in
1992, reflected significantly lower net credit losses and an improvement in
past due balances. The lower credit losses resulted from an improving economy,
the Company's implementation of procedural and organizational changes to
achieve stronger credit controls, and a greater emphasis on portfolio quality.
The number and magnitude of problem accounts continued to decline from the
levels in earlier years. At year end 1993, contracts over 60 days past due
declined to 0.40% of period end gross retail and lease receivables compared to
1.49% and 2.39% at year ends 1992 and 1991, respectively. The reserve for
credit losses was increased to $24.0 million to reflect the growth in the
portfolio and risks inherent in the financing of heavy-duty trucks.
The August 1993 tax law, which increased corporate income tax rates
from 34% to 35% effective January 1, 1993, had a $2.6 million adverse impact on
net income. The Company recorded a one-time increase to the income tax
provision of $2.3 million to adjust deferred tax liabilities to the higher
rate; in addition, income taxes on current year earnings increased by $.3
million.
As the result of these foregoing factors, net income for 1993 improved
to $17.0 million from $11.7 million in 1992.
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1992 Compared to 1991:
Income before taxes for 1992 improved to $18.6 millon from $5.7
million in 1991 due primarily to a lower provision for credit losses. Net
income for 1992 was $11.7 million compared to $14.9 million in 1991. Included
in the 1991 net income was a one-time adjustment of $11.3 million for the
Company's adoption of FASB 96, "Accounting for Income Taxes." Net income for
1991 would have been $3.6 million without the adjustment. Gross income and
interest expense in 1992 declined from 1991 as a result of lower market
interest rates.
Funding and Liquidity
The Company manages its capital structure consistent with industry
standards. Since 1983, the Company has made available registered senior debt
securities for offering to the public. In 1993, the Company registered $1
billion of senior debt securities for offering to the public under the
Securities Act of 1933. At the end of 1993, $980 million of such securities
had not been issued.
The Company believes that it has sufficient financial capabilities,
including internally generated funds, access to public and private debt
markets, lines of credit and other financial resources, to fund current
business needs and service debt maturities.
Impact of New Accounting Rules
FASB No. 114, "Accounting by Creditors for Impairment of a Loan," was issued in
May 1993 and is effective for fiscal years beginning December 15, 1994. The
Company does not expect the adoption of FASB No. 114 to have a material impact
on the Company.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Company and related schedules
described under Item 14, "Exhibits, Financial Statement Schedules, and Reports
on Form 8-K," are included following this page.
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Report of Independent Auditors
Board of Directors
PACCAR Inc and PACCAR Financial Corp.
We have audited the accompanying balance sheets of PACCAR Financial Corp. as of
December 31, 1993 and 1992, and the related statements of income and retained
earnings and cash flows for each of the three years in the period ended
December 31, 1993. Our audits also included the financial statement schedule
listed in the Index at Item 14a. These financial statements and schedule are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and schedule based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of PACCAR Financial Corp. at
December 31, 1993 and 1992, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1993, in
conformity with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
As discussed in Note A to the Financial Statements, in 1991 the Company changed
its method of accounting for income taxes.
/S/ Ernst & Young
Seattle, Washington
February 4, 1994
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BALANCE SHEETS
PACCAR Financial Corp.
December 31
1993 1992
---------- ----------
(Thousands of Dollars)
ASSETS
Cash $ 5,554 $ 5,664
Net receivables and direct
financing leases 1,466,049 1,138,507
Allowance for losses (24,000) (21,840)
---------- ----------
1,442,049 1,116,667
Equipment on operating leases, net of
allowance for depreciation of $15,246
(1992--$16,781) 39,823 40,718
Other assets 6,454 6,090
---------- ----------
TOTAL ASSETS $1,493,880 $1,169,139
========== ==========
LIABILITIES
Accounts payable and accrued expenses $ 29,733 $ 18,247
Payable for loans and leases originated 20,905 22,648
Commercial paper 475,210 425,533
Bank loans 49,000 30,000
Term debt 624,100 384,500
Deferred income taxes 68,182 79,774
---------- ----------
TOTAL LIABILITIES 1,267,130 960,702
STOCKHOLDER'S EQUITY
Preferred stock, par value $100 per share
6% noncumulative and nonvoting
450,000 shares authorized,
310,000 shares issued and outstanding 31,000 31,000
Common stock, par value $100 per share
200,000 shares authorized,
145,000 shares issued and outstanding 14,500 14,500
Paid in capital 1,310 -
Retained earnings 179,940 162,937
---------- ----------
TOTAL STOCKHOLDER'S EQUITY 226,750 208,437
------------ ----------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $1,493,880 $1,169,139
========== ==========
See notes to financial statements.
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STATEMENTS OF INCOME AND RETAINED EARNINGS
PACCAR Financial Corp.
Year Ended December 31
1993 1992 1991
-------- -------- --------
(Thousands of Dollars)
Interest and finance charges $102,983 $ 96,384 $107,216
Rentals on operating leases 13,039 13,106 13,920
-------- -------- --------
GROSS INCOME 116,022 109,490 121,136
Interest expense 45,815 48,914 62,520
Other borrowing expense 1,257 1,151 1,193
Depreciation expense related
to operating leases 10,432 10,201 10,669
Selling, general &
administrative expenses 21,990 21,968 19,863
Provision for losses on receivables 6,079 8,611 21,237
-------- -------- --------
INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING METHOD 30,449 18,645 5,654
Income taxes 13,446 6,948 2,089
-------- -------- --------
INCOME BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING METHOD 17,003 11,697 3,565
Cumulative effect of change in
accounting method - - 11,323
-------- -------- --------
NET INCOME 17,003 11,697 14,888
Retained earnings at beginning of year 162,937 151,240 136,352
-------- -------- --------
RETAINED EARNINGS AT END OF YEAR $179,940 $162,937 $151,240
======== ======== ========
See notes to financial statements.
-14-
15
STATEMENTS OF CASH FLOWS
PACCAR Financial Corp.
Year Ended December 31
1993 1992 1991
--------- --------- ---------
(Thousands of Dollars)
OPERATING ACTIVITIES:
Net income $ 17,003 $ 11,697 $ 14,888
Items included in net income not
affecting cash:
Cumulative effect of change in
accounting method - - (11,323)
Provision for losses on receivables 6,079 8,611 21,237
Deferred taxes (11,592) (7,087) (2,998)
Depreciation and amortization 11,253 11,290 11,747
Increase in accounts payable,
accrued expenses and income taxes 8,804 2,566 2,527
--------- --------- ---------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 31,547 27,077 36,078
INVESTING ACTIVITIES:
Loans and financing leases originated (839,887) (563,474) (421,123)
Collections on loans and financing
leases 563,597 472,743 439,599
Net decrease (increase) in wholesale (49,747) 24,647 40,457
receivables
Acquisition of equipment for
operating leases (20,462) (17,950) (7,674)
Disposal of operating lease equipment 5,255 1,361 1,313
--------- --------- ---------
NET CASH PROVIDED BY (USED
IN) INVESTING ACTIVITIES (341,244) (82,673) 52,572
FINANCING ACTIVITIES:
Net increase (decrease) in
commercial paper 49,677 33,074 (27,641)
Net increase (decrease)
in bank loans 19,000 (14,100) 44,100
Proceeds from term debt 359,500 267,800 160,300
Payments of term debt (119,900) (233,000) (270,100)
Additions to paid in capital 1,310 - -
--------- --------- ---------
NET CASH PROVIDED BY (USED
IN) FINANCING ACTIVITIES 309,587 53,774 (93,341)
--------- --------- ---------
NET DECREASE IN CASH (110) (1,822) (4,691)
BEGINNING CASH BALANCE 5,664 7,486 12,177
--------- --------- ---------
ENDING CASH BALANCE $ 5,554 $ 5,664 $ 7,486
========= ========= =========
See notes to financial statements.
-15-
16
NOTES TO FINANCIAL STATEMENTS
PACCAR Financial Corp.
December 31, 1993
(Thousands of Dollars)
NOTE A--SUMMARY OF ACCOUNTING POLICIES
Industry: PACCAR Financial Corp. (the "Company"), a wholly owned subsidiary of
PACCAR Inc ("PACCAR"), provides retail financing and leasing of trucks and
related equipment manufactured primarily by PACCAR and sold by authorized
dealers. The Company also finances dealer inventories of transportation
equipment.
Due to the nature of the Company's business, customers are concentrated in the
transportation industry throughout the United States. The Company's
receivables and direct financing lease portfolio are not concentrated in any
geographic region. Generally, all receivables are collateralized by the
equipment being financed. The risk of bad debt losses related to this
concentration has been considered in establishing the allowance for losses.
Revenue Recognition: Revenue from net receivables and direct financing leases
is recognized using the interest method. Certain loan origination costs are
deferred and amortized to interest income.
Equipment: Equipment on operating leases is recorded at cost and depreciated
on a straight-line basis over the term of each operating lease based upon its
estimated useful life of five years to an estimated residual value.
Income Taxes: The Company is included in the consolidated federal income tax
return of PACCAR. Any related tax liability is paid by the Company to PACCAR
and any current related tax benefit is paid by PACCAR to the Company exclusive
of the effect of Alternative Minimum Tax.
Effective January 1, 1991, the Company adopted Financial Accounting Standards
Board Statement No. 96, "Accounting for Income Taxes." The most significant
impact of FASB Statement No. 96 was to change the tax rate at which deferred
taxes were recognized on the balance sheet to the lower rate then specified by
federal tax laws. The change resulted in a one-time increase in net income of
$11,323 in the first quarter of 1991. There was no material effect on the
Company from the 1993 adoption of FASB No. 109 (an amendment to FASB No. 96),
"Accounting for Taxes."
During 1993, the federal income tax rate was increased effective January 1,
1993. The effect on operations was a one-time increase in income tax expense of
$2,302 recorded in the third quarter of 1993.
Credit Losses: The provision for losses on receivables is charged to income in
an amount sufficient to maintain the allowance for losses at a level considered
adequate to cover anticipated losses. Receivables are charged to this
allowance when, in the judgement of management, they are deemed uncollectible.
Interest Rate Contracts: The Company enters into interest rate contracts which
generally involve the exchange of fixed or floating rate interest payment
obligations without the exchange of the underlying principal amounts. These
contracts are used to effectively change the terms of debt to better match the
interest rate characteristics of the Company's receivables and thereby reduce
the effect of interest rate fluctuation on the Company's income.
-16-
17
NOTES TO FINANCIAL STATEMENTS (Continued)
PACCAR Financial Corp.
(Thousands of Dollars)
NOTE B--RECEIVABLES
Terms for retail notes, contracts and direct financing leases range up to 84
months. Wholesale financing terms are generally for less than one year.
Experience of the Company has shown that some receivables will be paid prior to
contractual maturity and others will be extended or renewed. Accordingly, the
maturities of receivables presented here should not be regarded as a forecast
of future collections.
The Company's receivables are as follows:
1993 1992
---------- ----------
Retail notes and contracts due within:
One year $ 392,504 $ 283,401
Two years 309,267 211,084
Three years 218,960 137,672
Four years 108,562 68,582
Five years and beyond 28,766 19,220
---------- ----------
1,058,059 719,959
Wholesale financing 134,874 85,298
Direct financing leases 355,067 407,218
Interest and other receivables 12,072 11,869
---------- ----------
1,560,072 1,224,344
Unearned interest:
Retail notes and contracts (53,536) (36,649)
Direct financing leases (40,487) (49,188)
---------- ----------
(94,023) (85,837)
---------- ----------
Net receivables and direct financing leases $1,466,049 $1,138,507
========== ==========
The Company's net investment in direct financing leases is as follows:
1993 1992
---------- ----------
Minimum lease payments receivable $ 332,375 $ 388,497
Estimated residual values of leased equipment 22,691 18,721
---------- ----------
355,066 407,218
Less unearned interest (40,487) (49,188)
---------- ----------
Net investment in direct financing leases $ 314,579 $ 358,030
========== ==========
-17-
18
NOTES TO FINANCIAL STATEMENTS (Continued)
PACCAR Financial Corp.
(Thousands of Dollars)
Future minimum lease payments on direct financing leases at December 31, 1993
are due as follows:
1994 $118,582
1995 95,176
1996 67,828
1997 35,163
1998 and beyond 15,626
--------
$332,375
========
The allowance for losses on receivables is summarized as follows:
1993 1992 1991
------- ------- -------
Balance at beginning of year $21,840 $21,840 $21,840
Provision for losses 6,079 8,611 21,237
Losses net of recoveries (3,919) (8,611) (21,237)
------- ------- -------
Balance at end of year $24,000 $21,840 $21,840
======= ======= =======
NOTE C--OPERATING LEASES
Terms of operating leases range up to 44 months. Future minimum rental
payments for transportation equipment on operating leases at December 31, 1993
are due as follows:
1994 $10,091
1995 7,560
1996 4,809
1997 976
-------
$23,436
=======
NOTE D--TRANSACTIONS WITH PACCAR INC
The Company has a Support Agreement with PACCAR that requires, among other
provisions, that PACCAR maintain a ratio of earnings to fixed charges, as
defined, for the Company of at least 1.25 to 1 for any fiscal year, and that
PACCAR own all outstanding voting stock of the Company.
The required ratio of 1.25 to 1 for the years ended December 31, 1993 - 1991
was met without assistance.
-18-
19
NOTES TO FINANCIAL STATEMENTS (Continued)
PACCAR Financial Corp.
(Thousands of Dollars)
PACCAR charges the Company for certain administrative services it provides.
These costs are charged to the Company based upon the Company's specific use of
the services and PACCAR's cost. Management considers these charges reasonable
and not significantly different from the costs that would be incurred if the
Company were on a stand-alone basis. Fees for services of $3,628, $3,093 and
$3,824 for 1993, 1992 and 1991, respectively, were charged to the Company.
Beginning July 1993, in lieu of payment, PACCAR Inc began recognizing certain
of these administrative services as an additional investment in the Company.
The Company records the investment as paid-in capital.
The Company's employees are covered by a defined benefit pension plan, an
unfunded postretirement medical and life insurance plan and a defined
contribution plan sponsored by PACCAR. Separate allocations of plan assets,
defined benefit accumulated plan benefits and defined contribution plan
benefits relating to the Company have not been made. Expenses charged to the
Company by PACCAR for these plans were $482, $326 and $255 for years 1993, 1992
and 1991, respectively.
The Company's Articles of Incorporation provide that the 6% noncumulative,
nonvoting preferred stock (100% owned by PACCAR) is redeemable only at the
option of the Company's Board of Directors.
NOTE E--TERM DEBT
Term debt is summarized as follows:
December 31
----------------------------
1993 1992
-------- --------
4.18% to 9.30% medium-term notes
due through 1998 $364,100 $230,500
Floating interest rate medium-term
notes due through 1995 260,000 154,000
-------- --------
$624,100 $384,500
======== ========
Interest rates on the floating interest rate medium-term notes are based on
various indices such as LIBOR and the prime rate.
Principal amounts due over the next five years at December 31, 1993 are
$220,800 in 1994, $203,800 in 1995, $130,500 in 1996, $59,000 in 1997 and
$10,000 in 1998.
At December 31, 1993, the Company had outstanding 40 interest rate contracts
with various financial institutions, having a total notional principal amount
of $599.5 million. These agreements expire as follows: $300.0 million in
1994, $195.5 million in 1995, $104.0 million in 1996. The notional amount is
used to measure the volume of these contracts and does not represent exposure
to credit loss. The Company's risk in these transactions is the cost of
replacing, at current market rates, these contracts in the event of default by
the counterparty. Management believes the risk of incurring such losses is
remote, and any losses would be immaterial.
-19-
20
NOTES TO FINANCIAL STATEMENTS (Continued)
PACCAR Financial Corp.
(Thousands of Dollars)
NOTE F-- CREDIT ARRANGEMENTS
The Company and PACCAR together have lines of credit arrangements with various
commercial banks that are reviewed annually for renewal. These lines are
maintained primarily to support the Company's short-term borrowings. At
December 31, 1993, the unused portion of these credit lines was $265 million.
The Company compensates banks with fees which are immaterial in amount.
The Company has entered into loan participation programs with various lending
institutions under which notes, between the Company and the lending
institutions, are sold by the lending institutions to investors on the open
market. These notes generally mature within 30 days. At December 31, 1993,
there was $49 million borrowed under these terms.
NOTE G--INTEREST EXPENSE
The following is a summary of interest expense:
Year Ended December 31
-----------------------------------------------
1993 1992 1991
------- ------- -------
Bank loans and commercial paper $14,814 $16,491 $24,309
Term debt 31,001 32,423 38,211
------- ------- -------
$45,815 $48,914 $62,520
======= ======= =======
Cash paid for interest was $45,734 in 1993, $49,667 in 1992 and $65,835 in
1991.
NOTE H--INCOME TAXES
The provision for income taxes consists of the following:
Year Ended December 31
-----------------------------------------------
1993 1992 1991
------- ------- -------
Current provision
Federal $23,516 $13,103 $ 4,804
State 1,522 932 283
------- ------- -------
25,038 14,035 5,087
Deferred benefit (11,592) (7,087) (2,998)
------- ------- -------
$13,446 $ 6,948 $ 2,089
======= ======= =======
-20-
21
NOTES TO FINANCIAL STATEMENTS (Continued)
PACCAR Financial Corp.
(Thousands of Dollars)
Deferred income tax assets and liabilities consisted of the following:
As of December 31
--------------------------
1993 1992
------- -------
Deferred tax liabilities
Depreciation $78,899 $88,316
Deferred tax (assets)
Allowance for doubtful accounts (9,180) (8,238)
Other (1,537) (304)
------- ------
(10,717) (8,542)
Net deferred tax liability $68,182 $79,774
======= =======
A reconciliation between the statutory federal income tax rate and the actual
provision for income taxes is shown below:
Year Ended December 31
-----------------------------------------------
1993 1992 1991
------- ------ ------
35% 34% 34%
--- --- ---
Tax at the statutory rate $10,657 $6,339 $1,922
Effect of:
Rate increases on deferred taxes 2,302 - -
State income taxes and other 487 609 167
------- ------ ------
$13,446 $6,948 $2,089
======= ====== ======
The change in the federal income tax rate from 34% to 35%, effective January 1,
1993, increased the 1993 provision for income tax by $2,302.
Cash paid for income taxes was $20,960 in 1993, $11,173 in 1992 and $2,715 in
1991.
NOTE I--FAIR VALUES OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments:
Cash and equivalents: The carrying amount reported in the balance sheets
approximates fair value.
Net Receivables: For floating rate loans including wholesale financings that
reprice frequently with no significant change in credit risk, fair values are
based on carrying values. For fixed rate loans, fair values are estimated
using discounted cash flow analyses using interest rates currently being
offered for loans with similar terms to borrowers of similar credit quality.
The carrying amount of accrued interest and other receivables approximates
their fair value. Direct financing leases and the related loss provision are
not included in net receivables.
-21-
22
NOTES TO FINANCIAL STATEMENTS (Continued)
PACCAR Financial Corp.
(Thousands of Dollars)
Off-Balance-Sheet Instruments: Fair values for the Company's interest rate
contracts are based on costs which would be incurred to terminate existing
agreements and enter into new agreements with similar notional amounts,
maturity dates and counterparties' credit standing, but at current market
interest rates.
Bank Loans and Term Debt: The carrying amount of the Company's commercial
paper and bank loans and floating rate term debt approximates their fair value.
The fair value of the Company's fixed rate term debt is estimated using
discounted cash flow analyses, based on the Company's current incremental
borrowing rates for similar types of borrowing arrangements.
The carrying amount of trade payables and receivables approximate their fair
value and have been excluded from the accompanying table.
The carrying amounts and fair values of the Company's financial instruments at
December 31, 1993 are as follows:
Carrying Fair
Amount Value
---------- ----------
Cash and equivalents $ 5,554 $ 5,554
Net receivables 1,133,117 1,143,743
Commercial paper and bank loans 524,211 524,211
Term debt 624,100 626,293
The Company's off-balance-sheet financial instruments (interest rate contracts)
represented an additional liability of $2,000 if recorded at fair value as of
December 31, 1993.
NOTE J--QUARTERLY RESULTS (Unaudited)
QUARTER
--------------------------------------------------------------
First Second Third Fourth
------- ------- ------- -------
1993
- ----
Gross income $27,836 $28,142 $29,386 $30,658
Income before income taxes 7,114 7,384 7,507 8,444
Net income 4,463 4,630 2,695 5,215
1992
- ----
Gross income $27,570 $27,702 $27,181 $27,037
Income before income taxes 2,819 4,340 5,501 5,985
Net income 1,767 2,727 3,449 3,754
-22-
23
NOTES TO FINANCIAL STATEMENTS (Continued)
PACCAR Financial Corp.
(Thousands of Dollars)
PACCAR Financial Corp.
SCHEDULE IX--SHORT-TERM BORROWINGS
----------------------------------
(Thousands of Dollars)
End of Period Weighted
-------------------- Average
Weighted Amount Outstanding Interest
Average During the Period Rate
Interest -------------------- During the
Description(1) Balance Rate Maximum Average(2) Period (3)
- ---------------------- ---------- -------- -------- ---------- ----------
December 31, 1993
Commercial Paper $475,211 3.28% $483,724 $415,161 3.20%
Bank Loans 49,000 3.29% 102,000 49,311 3.18%
December 31, 1992
Commercial Paper $425,533 3.50% $424,647 $352,416 3.82%
Bank Loans 30,000 3.34% 122,000 62,865 3.68%
December 31, 1991:
Commercial Paper $392,459 5.15% $469,465 $340,495 6.31%
Bank Loans 44,100 5.19% 129,000 42,276 5.70%
(1) Commercial paper maturities can range from 1-270 days, and bank loans
can range from 1-364 days. There are no provisions for the extension
of maturities.
(2) Average amount outstanding for commercial paper and bank loans is the
average daily balance for the year.
(3) The weighted average interest rate during the period was computed by
dividing the actual interest expense by average short-term debt
outstanding.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
-23-
24
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company at February 1, 1994,
their ages, current positions with the Company and principal occupations during
the past five years are set forth in the following table. The table also shows
directorships held by a director in public corporations.
Directors and Executive Officers
Present Position and Other Position(s)
Name and Age Held During Last Five Years
- ---------------------- -------------------------------------------------------
Charles M. Pigott (64) Chairman and Director; Chairman, Chief Executive
Officer and Director of PACCAR. Also a director of
The Boeing Company, Chevron Corporation and Seattle
Times Company.
William E. Boisvert (51) Vice Chairman and Director; Executive Vice President
of PACCAR since April 1989. Senior Vice President
and Chief Financial Officer of PACCAR from August 1988
to April 1989.
G. Don Hatchel (49) Vice President and Director; Vice President-
Controller of PACCAR since January 1991. Various
management positions with PACCAR prior thereto.
David J. Hovind (53) Director; President and Director of PACCAR since
January 1992; Executive Vice President of PACCAR
from July 1987 to January 1992.
T. Ronald Morton (47) President and Director; President of PACCAR Financial
Corp. since August 1988.
Michael A. Tembreull (47) Director; Executive Vice President of PACCAR since
January 1992; Senior Vice President of PACCAR from
September 1990 to January 1992; General Manager of
Peterbilt Division from September 1985 to August 1990.
James L. Shiplet (55) Director; President of PACCAR Leasing Corporation
since September 1987.
John J. Waggoner (45) Director; Treasurer of PACCAR Inc since May 1991;
Director of Strategic Analysis of PACCAR Inc from
July 1989 to May 1991. Various financial management
positions with PACCAR prior thereto.
The directors of the Company are elected annually by PACCAR. All
officers are elected annually by the Board of Directors or appointed by the
Board of Directors or Chairman to serve at the pleasure of the Board or until
their successors are elected or appointed. There is no family relationship
between any of the directors or officers.
ITEM 11. EXECUTIVE COMPENSATION
This item is omitted pursuant to Form 10-K General Instruction J(1)
and (2)(c).
-24-
25
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Securities of the Company
PACCAR owns beneficially and of record 100% of the outstanding
preferred stock (310,000 shares, $100 par value) and common stock (145,000
shares, $100 par value) of the Company.
Securities of PACCAR
This item is omitted pursuant to Form 10-K General Instruction J(1)
and (2)(c).
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See generally "Relationship with PACCAR," "Selected Financial Data"
and "NOTE D--Transactions with PACCAR Inc" in the Notes to Financial
Statements.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
a. LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following financial statements of the Company are included
in Item 8:
At December 31, 1993 and 1992 and for the Years Ended December
31, 1993, 1992, and 1991
Balance Sheets -- December 31, 1993 and 1992
Statements of Income and Retained Earnings -- Years
Ended December 31, 1993, 1992 and 1991
Statements of Cash Flows -- Years Ended December 31,
1993, 1992 and 1991
Notes to Financial Statements -- December 31, 1993
The following financial statement schedule of the Company is also
included in Item 8.
Schedule IX -- Short-Term Borrowings
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions, are inapplicable or have been
otherwise disclosed and, therefore, have been omitted.
Listing of Exhibits
The exhibits required by Item 601 of Regulation S-K are listed in the
accompanying Exhibit Index.
b. REPORTS ON FORM 8-K FILED IN THE FOURTH QUARTER OF 1993
There were no reports on Form 8-K for the quarter ended December 31, 1993.
-25-
26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
PACCAR Financial Corp.
By /S/ T. Ronald Morton
----------------------------------
T. Ronald Morton
President
Date: March 28, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant as of the above date and in the capacities indicated.
(1) Principal Executive Officer
/S/ T. Ronald Morton President
-------------------------------------
T. Ronald Morton
(2) Principal Financial Officer
/S/ Ron E. Ranheim Treasurer
-------------------------------------
Ron E. Ranheim
(3) Principal Accounting Officer
/S/ Brian J. Kimble Controller
-------------------------------------
Brian J. Kimble
(4) A Majority of the Board of Directors:
/S/ T. Ronald Morton
-------------------------------------
T. Ronald Morton
William E. Boisvert*
G. Don Hatchel*
David J. Hovind*
Charles M. Pigott*
Michael A. Tembreull*
James L. Shiplet*
John J. Waggoner*
*By /S/ T. Ronald Morton
-------------------------------------
T. Ronald Morton
Attorney-in-Fact
-26-
27
EXHIBIT INDEX
Exhibit
No.
- -------
3.1 Restated Articles of Incorporation of the Company, as amended. Incorporated
by reference to Exhibit 3.1 to the Company's Form 10-K dated March 26,
1985. Amendment incorporated by reference to Exhibit 19.1 to the
Company's Form 10-Q dated August 13, 1985, File Number 0-12553.
3.2 By-Laws of the Company, as amended. Incorporated by reference to
Exhibit 3.2 to the Company's Form 10 dated October 20, 1983, File
Number 0-12553.
4.1 Indenture for Senior Debt Securities dated as of December 1, 1983
and first Supplemental Indenture dated as of June 19, 1989, as
executed between the Company and Citibank, N.A. Incorporated by
reference to Exhibit 4.1 to the Company's Form 10-K dated March 26,
1984, File Number 0-12553 and Exhibit 4.2 to the Company's Form S-3
dated June 23, 1989, Registration Number 33-29434.
4.2 Forms of Medium-Term Note, Series E, incorporated by reference to
Exhibits 4.3A, 4.3B and 4.3C to the Company's Form S-3 dated June
23, 1989, Registration Number 33-29434, and Forms of Medium-Term
Note, Series E, incorporated by reference to Exhibit 4.3B.1 to the
Company's Form 8-K dated December 19, 1991, under Commission File
Number 0-12553.
Letter of Representation among the Company, Citibank, N.A. and the
Depository Trust Company, Series E, dated July 6, 1989, incorporated
by reference to Exhibit 4.3 of the Company's Form 10-K dated March
29, 1990, File Number 0-12553.
4.3 Forms of Medium-Term Note, Series F, incorporated by reference to
Exhibits 4.3A, 4.3B and 4.3C to the Company's Form S-3 dated May 26,
1992, Registration Number 33-48118.
Form of Letter of Representation among the Company, Citibank, N.A.
and the Depository Trust Company, Series F, incorporated by
reference to Exhibit 4.4 to the Company's Form S-3 dated May 26, 1992,
Registration Number 33-48118.
4.4 Forms of Medium-Term Note, Series G, incorporated by reference to
Exhibits 4.3A and 4.3B to the Company's Form S-3 dated December 8,
1993, Registration Number 33-51335.
Form of Letter of Representation among the Company, Citibank, N.A.
and the Depository Trust Company, Series G, incorporated by
reference to Exhibit 4.4 to the Company's Form S-3 dated December 8,
1993, Registration Number 33-51335.
10.1 Support Agreement between the Company and PACCAR dated as of June 19,
1989. Incorporated by reference to Exhibit 28.1 to the Company's
Form S-3 dated June 23, 1989, Registration Number 33-29434.
12.1 Statement re computation of ratio of earnings to fixed charges
pursuant to SEC reporting requirements.
12.2 Statement re computation of ratio of earnings to fixed charges
pursuant to the Support Agreement with PACCAR Inc.
-27-
28
EXHIBIT INDEX (Cont.)
Exhibit
No.
- -------
12.3 Statement re computation of ratio of earnings to fixed charges of
PACCAR Inc and subsidiaries.
12.4 Statement re computation of ratios for allowances for losses on
receivables and past due levels.
24.1 Consent of Independent Auditors.
25.1 Power of attorney of certain officers and directors.
__________________
Other exhibits listed in Item 601 of Regulation S-K are not applicable.
-28-