<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the period ended March 31, 1995
Commission File No. 0-6394
PACCAR Inc
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(Exact name of registrant as specified in its charter)
Delaware 91-0351110
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
777 - 106th Ave. N.E., Bellevue, WA 98004
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(Address of principal executive offices) (Zip Code)
(206) 455-7400
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(Registrant's telephone number, including area code)
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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $12 par value--38,859,530 shares as of April 30, 1995
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<PAGE>
PACCAR Inc AND SUBSIDIARIES
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INDEX
Page
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PART I. FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS:
Consolidated Statements of Income --
Three Months Ended March 31, 1995 and 1994....................... 3
Condensed Consolidated Balance Sheets --
March 31, 1995, and December 31, 1994............................ 4
Condensed Consolidated Statements of Cash Flows --
Three Months Ended March 31, 1995 and 1994....................... 6
Notes to Consolidated Financial Statements......................... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION........................... 8
PART II. OTHER INFORMATION:
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......... 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................. 10
SIGNATURE............................................................... 11
INDEX TO EXHIBITS....................................................... 12
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<PAGE>
FORM 10-Q
PACCAR Inc AND SUBSIDIARIES
PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
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Consolidated Statements of Income (Unaudited)
(Millions except per share amounts)
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Three Months Ended March 31 1995 1994
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<S> <C> <C>
MANUFACTURING:
Revenues
Net sales $1,123.7 $986.3
Other 5.9 .4
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1,129.6 986.7
Costs and Expenses
Cost of sales 978.7 855.0
Selling, general and administrative 85.2 77.2
Interest .5 .5
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1,064.4 932.7
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Manufacturing Income Before Income Taxes 65.2 54.0
FINANCIAL SERVICES:
Revenues 59.9 46.7
Costs and Expenses
Interest and other 33.7 22.5
Selling, general and administrative 10.8 10.3
Provision for losses on receivables 4.8 1.5
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49.3 34.3
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Financial Services Income Before Income Taxes 10.6 12.4
OTHER:
Investment income 6.5 5.0
Minority interest and other .9 (3.4)
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Total Income Before Income Taxes 83.2 68.0
Income taxes 28.9 24.4
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Net Income $ 54.3 $ 43.6
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Weighted average number of common shares outstanding 38.9 38.9
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Per Share Data:
Net income $ 1.40 $1.12
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Dividends declared $ .25 $ .25
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</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
FORM 10-Q
PACCAR Inc AND SUBSIDIARIES
<TABLE>
<CAPTION>
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Condensed Consolidated Balance Sheets March 31 December 31
ASSETS (Millions of Dollars) 1995 1994*
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<S> <C> <C>
MANUFACTURING: (Unaudited)
Current Assets
Cash and equivalents $ 294.8 $ 289.9
Trade receivables - net 272.6 232.9
Marketable securities 246.3 241.7
Inventories 263.8 274.5
Deferred taxes and other current assets 63.9 65.1
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Total Manufacturing Current Assets 1,141.4 1,104.1
Investments and Other 86.3 88.7
Property, Plant and Equipment, Net 370.7 369.9
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Total Manufacturing Assets 1,598.4 1,562.7
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FINANCIAL SERVICES:
Cash and equivalents 12.5 21.4
Finance and other receivables,
net of allowance for losses 2,489.8 2,469.6
Less unearned interest (195.2) (194.7)
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2,294.6 2,274.9
Equipment on operating leases, net 53.4 53.8
Other assets 18.2 15.4
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Total Financial Services Assets 2,378.7 2,365.5
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$3,977.1 $3,928.2
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</TABLE>
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<PAGE>
FORM 10-Q
PACCAR Inc AND SUBSIDIARIES
<TABLE>
<CAPTION>
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March 31 December 31
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994*
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<S> <C> <C>
MANUFACTURING: (Unaudited)
Current Liabilities
Accounts payable and accrued expenses $ 617.1 $ 620.3
Income taxes 41.7 22.5
Dividend payable 77.7
Other .5 1.8
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Total Manufacturing Current Liabilities 659.3 722.3
Long-Term Debt 11.0 11.1
Other 104.7 85.7
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Total Manufacturing Liabilities 775.0 819.1
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FINANCIAL SERVICES:
Accounts payable and accrued expenses 36.4 70.6
Commercial paper and bank loans 797.8 687.7
Long-term debt 994.9 999.9
Deferred income taxes and other 140.6 143.5
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Total Financial Services Liabilities 1,969.7 1,901.7
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MINORITY INTEREST 24.9 32.9
STOCKHOLDERS' EQUITY
Preferred stock, no par value:
Authorized 1,000,000 shares, none issued
Common stock, $12.00 par value: Authorized 100,000,000
shares, issued 38,859,530 shares 466.3 466.3
Additional paid-in capital 218.2 218.2
Retained earnings 601.1 556.5
Cumulative translation and other adjustments (78.1) (66.5)
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Total Stockholders' Equity 1,207.5 1,174.5
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$3,977.1 $3,928.2
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<FN>
* The December 31, 1994, consolidated balance sheet has been derived from
audited financial statements.
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
FORM 10-Q
PACCAR Inc AND SUBSIDIARIES
<TABLE>
<CAPTION>
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Condensed Consolidated Statements of Cash Flows (Unaudited)
(Millions of Dollars)
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Three Months Ended March 31 1995 1994
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<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 34.4 $ 67.8
INVESTING ACTIVITIES:
Loans and financing leases originated (255.3) (295.5)
Collections on loans and financing leases 241.9 243.4
Net (increase) decrease in wholesale receivables (31.1) 3.0
Marketable securities purchased (487.3) (184.1)
Marketable securities sales and maturities 488.7 185.0
Acquisition of controlling interest in affiliate,
net of cash consolidated 44.3
Acquisition of property, plant, and equipment (18.7) (9.5)
Acquisition of equipment for operating leases (3.7) (5.5)
Proceeds from asset disposals 8.8 7.4
Other 3.9 (3.0)
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Net Cash Used in Investing Activities (52.8) (14.5)
FINANCING ACTIVITIES:
Net increase (decrease) in commercial paper and bank loans 97.9 (67.0)
Cash dividends (87.4) (45.3)
Proceeds from long-term debt 133.9 187.1
Payments of long-term debt (117.9) (76.9)
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Net Cash Provided by (Used in) Financing Activities 26.5 (2.1)
Effect of exchange rate changes on cash (12.1) (2.4)
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Net (Decrease) Increase in Cash and Equivalents (4.0) 48.8
Cash and equivalents at beginning of period 311.3 223.2
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Cash and equivalents at end of period $307.3 $272.0
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</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE>
FORM 10-Q
PACCAR Inc AND SUBSIDIARIES
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Notes to Consolidated Financial Statements (Millions of Dollars)
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NOTE A--Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. For further information, refer to the
consolidated financial statements and footnotes included in the Company's annual
report on Form 10-K for the year ended December 31, 1994.
RECLASSIFICATIONS: Certain prior year amounts have been reclassified to conform
to the 1995 presentation.
<TABLE>
<CAPTION>
NOTE B--Inventories
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March 31 December 31
1995 1994
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<S> <C> <C>
Inventories at FIFO cost: (Unaudited)
Finished products $203.0 $188.6
Work in process and raw materials 186.7 210.2
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389.7 398.8
Less excess of FIFO cost over LIFO (125.9) (124.3)
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$263.8 $274.5
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</TABLE>
Under the LIFO method of accounting (used for approximately 81% of March 31,
1995, inventories), an actual valuation can be made only at the end of each year
based on year-end inventory levels and costs. Accordingly, interim valuations
are based on management's estimates of those year-end amounts. Based on present
estimates of year-end inventory levels, no significant liquidations of LIFO
inventory quantities are expected. Because inventory levels and costs are
subject to many forces beyond management's control, the present estimates are
subject to the final year-end LIFO inventory valuation.
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<PAGE>
FORM 10-Q
PACCAR Inc AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS:
PACCAR set new first quarter records for sales and net income despite
limited production and sales in Mexico. Compared to last year, net
income increased over 24% to $54.3 million on a 14% gain in sales.
Kenworth and Peterbilt divisions and PACCAR Financial Corp., the
largest of the Company's financial services subsidiaries, all had
excellent results.
Manufacturing income before income taxes rose 21% compared to the year-
earlier quarter. All manufacturing divisions with the exception of
PACCAR's Mexican affiliate, VILPAC, S.A., reported improved sales. The
improvement in profits was principally attributable to the truck
segment.
Sustained demand for Kenworth and Peterbilt products has kept backlogs
high in the U.S. and Canada. Operations at plants producing for these
markets remained near capacity levels.
Combined results for PACCAR's international truck operations in
Australia and the United Kingdom also improved compared to the first
quarter of 1994 with higher sales and profitability. In Mexico,
continued adverse economic conditions have kept VILPAC's production and
sales at minimal levels.
Sales and profits for winches and oilfield equipment compared favorably
to first quarter 1994 largely due to actions taken last year to
consolidate operations and diversify product offerings. The Auto Parts
segment also reported improved operating results.
For the Financial Services segment, net finance receivable portfolios
increased slightly from December 31, 1994 levels but were 18% above
year-earlier balances. Nearly all of PACCAR's finance and leasing
operations attained higher profitability in the first quarter of 1995
compared to the first quarter of 1994. However, because of higher loan
loss provisions and operating losses recorded in Mexico by VILPAC's
financial subsidiary, results for the segment were below those of last
year.
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<PAGE>
FORM 10-Q
PACCAR Inc AND SUBSIDIARIES
LIQUIDITY AND CAPITAL RESOURCES:
PACCAR's ratio of manufacturing current assets to current liabilities
at March 31, 1995 increased to 1.73 from 1.53 at December 31, 1994.
During the first quarter of 1995, the Company used cash from operations
and net proceeds from borrowings (principally commercial paper and bank
loans) to fund an increase in Financial Services receivables (comprised
mostly of wholesale receivables), pay the special year-end and regular
first quarter dividends and increase its net investment in fixed assets
and equipment for operating leases. The reduction in 1995 of cash from
operations is principally attributable to changes in components of
working capital.
Other information on liquidity and sources of capital as presented in
the 1994 Annual Report to Stockholders continues to be relevant.
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<PAGE>
FORM 10-Q
PACCAR Inc AND SUBSIDIARIES
PART II--OTHER INFORMATION
For Items 1, 2, 3 and 5, there was no reportable information for any of the
three months ended March 31, 1995.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of stockholders was held on April 25, 1995.
(b) The following persons were elected to serve as directors:
Class III - Term Expiring in 1998
---------------------------------
Charles M. Pigott
John W. Pitts
Dr. Carl H. Hahn
Other persons whose term of office as a director continued after the
meeting:
Class I - Term Expiring in 1996
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John M. Fluke, Jr.
David J. Hovind
Michael A. Tembreull
James H. Wiborg
Class II - Term Expiring in 1997
--------------------------------
Richard P. Cooley
Harold J. Haynes
James C. Pigott
Mark C. Pigott
(c) None
(d) None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The exhibits filed herewith are listed in the accompanying
index to exhibits.
(b) No reports on Form 8-K have been filed for the quarter ended March 31,
1995.
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<PAGE>
FORM 10-Q
PACCAR Inc AND SUBSIDIARIES
SIGNATURE
Pursuant to the requirements 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 Inc
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(Registrant)
Date May 10, 1995 By /s/ G. D. Hatchel
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G. D. Hatchel
Vice President and Controller
(Authorized Officer and
Chief Accounting Officer)
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<PAGE>
FORM 10-Q
PACCAR Inc AND SUBSIDIARIES
INDEX TO EXHIBITS
EXHIBIT (IN ORDER OF ASSIGNED INDEX NUMBERS)
3 Articles of incorporation and bylaws:
(a) PACCAR Inc Certificate of Incorporation, as amended to April 27, 1990
(incorporated by reference to the Quarterly Report on Form 10-Q for the
quarter ended March 31, 1990).
(b) PACCAR Inc Bylaws, as amended to April 26, 1994 (incorporated by
reference to the Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994).
4 Instruments defining the rights of security holders, including indentures:
(a) Rights agreement dated as of December 21, 1989 between PACCAR Inc and
First Chicago Trust Company of New York setting forth the terms of the
Series A Junior Participating Preferred Stock, no par value per share
(incorporated by reference to Exhibit 1 of the Current Report on Form
8-K of PACCAR Inc dated December 27, 1989).
(b) Indenture for Senior Debt Securities dated as of December 1, 1983
between PACCAR Financial Corp. and Citibank, N.A., Trustee
(incorporated by reference to Exhibit 4.1 of the Annual Report on Form
10-K of PACCAR Financial Corp. for the year ended December 31, 1983).
(c) First Supplemental Indenture dated as of June 19, 1989 between PACCAR
Financial Corp. and Citibank, N.A., Trustee (incorporated by reference
to Exhibit 4.2 to PACCAR Financial Corp.'s registration statement on
Form S-3, Registration No. 33-29434).
(d) Forms of Medium-Term Note, Series E (incorporated by reference to
Exhibits 4.3A, 4.3B and 4.3C to PACCAR Financial Corp.'s Registration
Statement on 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 PACCAR Financial Corp.'s Current Report
on Form 8-K, dated December 19, 1991, under Commission File Number 0-
12553).
Letter of Representation among PACCAR Financial Corp., Citibank, N.A.
and the Depository Trust Company, Series E, dated July 6, 1989
(incorporated by reference to Exhibit 4.3 of PACCAR Financial Corp.'s
Annual Report on Form 10-K, dated March 29, 1990, File Number 0-12553).
(e) Forms of Medium-Term Note, Series F (incorporated by reference to
Exhibits 4.3A, 4.3B and 4.3C to PACCAR Financial Corp.'s Registration
Statement on Form S-3 dated May 26, 1992, Registration Number 33-
48118).
Form of Letter of Representation among PACCAR Financial Corp.,
Citibank, N.A. and the Depository Trust Company, Series F (incorporated
by reference to Exhibit 4.4 to PACCAR Financial Corp.'s Registration
Statement on Form S-3 dated May 26, 1992, Registration Number 33-
48118).
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<PAGE>
FORM 10-Q
PACCAR Inc AND SUBSIDIARIES
INDEX TO EXHIBITS
EXHIBIT (IN ORDER OF ASSIGNED INDEX NUMBERS)
(f) Forms of Medium-Term Note, Series G (incorporated by reference to
Exhibits 4.3A and 4.3B to PACCAR Financial Corp.'s Registration
Statement on Form S-3 dated December 8, 1993, Registration Number
33-51335).
Form of Letter of Representation among PACCAR Financial Corp.,
Citibank, N.A. and the Depository Trust Company, Series G (incorporated
by reference to Exhibit 4.4 to PACCAR Financial Corp.'s Registration
Statement on Form S-3 dated December 8, 1993, Registration Number
33-51335).
10 Material contracts
(a) PACCAR Inc Incentive Compensation Plan (incorporated by reference to
Exhibit (10)(a) of the Annual Report on Form 10-K for the year ended
December 31, 1980).
(b) PACCAR Inc Deferred Compensation Plan for Directors (incorporated by
reference to Exhibit (10)(b) of the Annual Report on Form 10-K for the
year ended December 31, 1980).
(c) Supplemental Retirement Plan (incorporated by reference to Exhibit
(10)(c) of the Annual Report on Form 10-K for the year ended December
31, 1980).
(d) 1981 Long Term Incentive Plan (incorporated by reference to Exhibit A
of the 1982 Proxy Statement, dated March 25, 1982).
(e) Amendment to 1981 Long Term Incentive Plan (incorporated by reference
to Exhibit (10)(a) of the Quarterly Report on Form 10-Q for the quarter
ended March 31, 1991).
(f) PACCAR Inc 1991 Long-Term Incentive Plan (incorporated by reference to
Exhibit (10)(h) of the Quarterly Report on Form 10-Q for the quarter
ended June 30, 1992).
(g) Amended and Restated Deferred Incentive Compensation Plan (incorporated
by reference to Exhibit (10)(g) of the Annual Report on Form 10-K for
the year ended December 31, 1993).
27 Financial Data Schedule
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated statements of income for the three months ended March 31, 1995 and
1994, and the condensed consolidated balance sheets, March 31, 1995 and December
31, 1994 of PACCAR Inc and Subsidiaries and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 307,300
<SECURITIES> 246,300
<RECEIVABLES> 2,567,200
<ALLOWANCES> 0
<INVENTORY> 263,800
<CURRENT-ASSETS> 0
<PP&E> 370,700
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,977,100
<CURRENT-LIABILITIES> 0
<BONDS> 1,005,900
<COMMON> 466,300
0
0
<OTHER-SE> 741,200
<TOTAL-LIABILITY-AND-EQUITY> 3,977,100
<SALES> 1,123,700
<TOTAL-REVENUES> 1,189,500
<CGS> 978,700
<TOTAL-COSTS> 1,012,400
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 4,800
<INTEREST-EXPENSE> 500
<INCOME-PRETAX> 83,200
<INCOME-TAX> 28,900
<INCOME-CONTINUING> 54,300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,300
<EPS-PRIMARY> 1.40
<EPS-DILUTED> 1.40
</TABLE>
