Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PCAR | |
Entity Registrant Name | PACCAR INC | |
Entity Central Index Key | 75,362 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 350,462,850 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income € in Millions, shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2016USD ($)$ / sharesshares | Mar. 31, 2016EUR (€)shares | Mar. 31, 2015USD ($)$ / sharesshares | |
Investment income | $ 5.7 | $ 5.1 | |
Provision for losses on receivables | 3.4 | 2.7 | |
European Commission charge | 942.6 | 0 | |
Income before income taxes | (429.6) | 561.7 | |
Income taxes | 165 | 183.3 | |
Net (Loss) Income | $ (594.6) | $ 378.4 | |
Net (Loss) Income Per Share | |||
Basic | $ / shares | $ (1.69) | $ 1.07 | |
Diluted | $ / shares | $ (1.69) | $ 1.06 | |
Weighted Average Number of Common Shares Outstanding | |||
Basic | shares | 351.3 | 351.3 | 355.1 |
Diluted | shares | 351.3 | 351.3 | 356.1 |
Dividends declared per share | $ / shares | $ 0.24 | $ 0.22 | |
Comprehensive (Loss) Income | $ (466.8) | $ 40.9 | |
Truck, Parts and Other | |||
Net sales and revenues | 4,010.6 | 4,548 | |
Cost of sales and revenues | 3,413.6 | 3,910.2 | |
Research and development | 59.6 | 56.2 | |
Selling, general and administrative | 110.3 | 109.5 | |
European Commission charge | 942.6 | € 850 | 0 |
Interest and other expense, net | 0.1 | 4.5 | |
Costs and Expenses, Total | 4,526.2 | 4,080.4 | |
Income before income taxes | (515.6) | 467.6 | |
Financial Services | |||
Interest and fees | 107.4 | 110.9 | |
Operating lease, rental and other revenues | 182 | 173.8 | |
Revenues | 289.4 | 284.7 | |
Interest and other borrowing expenses | 30.3 | 29.1 | |
Depreciation and other expenses | 150.9 | 140.4 | |
Selling, general and administrative | 24.5 | 23.5 | |
Provision for losses on receivables | 3.4 | 2.7 | |
Costs and Expenses, Total | 209.1 | 195.7 | |
Income before income taxes | $ 80.3 | $ 89 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 | ||
ASSETS | ||||
Cash and cash equivalents | $ 1,847.3 | $ 2,016.4 | ||
Total Assets | 21,356.9 | 21,109.8 | [1] | |
STOCKHOLDERS' EQUITY: | ||||
Preferred stock, no par value - authorized 1.0 million shares, none issued | 0 | 0 | [1] | |
Common stock, $1 par value - authorized 1.2 billion shares, issued 351.5 million and 351.3 million shares | 351.5 | 351.3 | [1] | |
Additional paid-in capital | 79.5 | 69.3 | [1] | |
Treasury stock, at cost -1.1 million and nil shares | (56.3) | 0 | [1] | |
Retained earnings | 6,857.7 | 7,536.8 | [1] | |
Accumulated other comprehensive loss | (889.2) | (1,017) | [1] | |
Total Stockholders' Equity | 6,343.2 | 6,940.4 | [1] | |
Liabilities and Equity, Total | 21,356.9 | 21,109.8 | [1] | |
Truck, Parts and Other | ||||
ASSETS | ||||
Cash and cash equivalents | 1,765 | 1,929.9 | [1] | |
Trade and other receivables, net | 1,066.1 | 879 | [1] | |
Marketable debt securities | 1,466.1 | 1,448.1 | [1] | |
Inventories, net | 829.1 | 796.5 | [1] | |
Other current assets | 266.3 | 245.7 | [1] | |
Total Truck, Parts and Other Current Assets | 5,392.6 | 5,299.2 | [1] | |
Equipment on operating leases, net | 1,041.3 | 992.2 | [1] | |
Property, plant and equipment, net | 2,207.7 | 2,176.4 | [1] | |
Other noncurrent assets, net | 393.1 | 387.4 | [1] | |
Total Assets | 9,034.7 | 8,855.2 | [1] | |
Liabilities | ||||
Accounts payable, accrued expenses and other | 2,366.6 | 2,071.7 | [1] | |
European Commission liability | 967.3 | |||
Dividend payable | [1] | 492.6 | ||
Total Truck, Parts and Other Current Liabilities | 3,333.9 | 2,564.3 | [1] | |
Residual value guarantees and deferred revenues | 1,101.7 | 1,047.4 | [1] | |
Other liabilities | 747.7 | 720.2 | [1] | |
Total Liabilities | 5,183.3 | 4,331.9 | [1] | |
Financial Services | ||||
ASSETS | ||||
Cash and cash equivalents | 82.3 | 86.5 | [1] | |
Finance and other receivables, net | 9,279.8 | 9,303.6 | [1] | |
Equipment on operating leases, net | 2,458.7 | 2,380.8 | [1] | |
Other assets | 501.4 | 483.7 | [1] | |
Total Assets | 12,322.2 | 12,254.6 | [1] | |
Liabilities | ||||
Accounts payable, accrued expenses and other | 346 | 356.9 | [1] | |
Commercial paper and bank loans | 2,754.7 | 2,796.5 | [1] | |
Term notes | 5,822.6 | 5,795 | [1] | |
Deferred taxes and other liabilities | 907.1 | 889.1 | [1] | |
Total Liabilities | $ 9,830.4 | $ 9,837.5 | [1] | |
[1] | The December 31, 2015 consolidated balance sheet has been derived from audited financial statements. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 | [1] |
Statement of Financial Position [Abstract] | |||
Preferred stock, no par value | |||
Preferred stock, authorized | 1,000,000 | 1,000,000 | |
Preferred stock, issued | 0 | 0 | |
Common stock, par value | $ 1 | $ 1 | |
Common stock, authorized | 1,200,000,000 | 1,200,000,000 | |
Common stock, issued | 351,500,000 | 351,300,000 | |
Treasury stock, shares | 1,100,000 | 0 | |
[1] | The December 31, 2015 consolidated balance sheet has been derived from audited financial statements. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
OPERATING ACTIVITIES: | ||
Net (loss) income | $ (594.6) | $ 378.4 |
Adjustments to reconcile net (loss) income to cash provided by operations: | ||
Depreciation and amortization, Property, plant and equipment | 75.8 | 70.3 |
Depreciation and amortization, Equipment on operating leases and other | 166.7 | 150.8 |
Provision for losses on financial services receivables | 3.4 | 2.7 |
Other, net | (17.4) | (47.2) |
European Commission charge | 942.6 | 0 |
Change in operating assets and liabilities: | ||
Trade and other receivables | (215.4) | (285.7) |
Wholesale receivables on new trucks | 73.7 | (215.5) |
Sales-type finance leases and dealer direct loans on new trucks | 49.2 | 35.3 |
Inventories | (10.4) | 10 |
Accounts payable and accrued expenses | 210.5 | 313.5 |
Income taxes, warranty and other | 111.7 | 63.6 |
Net Cash Provided by Operating Activities | 795.8 | 476.2 |
INVESTING ACTIVITIES: | ||
Originations of retail loans and direct financing leases | (603.7) | (637.5) |
Collections on retail loans and direct financing leases | 592.3 | 625.4 |
Net decrease (increase) in wholesale receivables on used equipment | 6.5 | (1.6) |
Purchases of marketable debt securities | (304.1) | (322.7) |
Proceeds from sales and maturities of marketable debt securities | 318.1 | 276.9 |
Payments for property, plant and equipment | (77.3) | (54.8) |
Acquisitions of equipment for operating leases | (340.1) | (340.9) |
Proceeds from asset disposals | 116.1 | 123 |
Net Cash Used in Investing Activities | (292.2) | (332.2) |
FINANCING ACTIVITIES: | ||
Payments of cash dividends | (576.9) | (432.4) |
Purchases of treasury stock | (56.3) | 0 |
Proceeds from stock compensation transactions | 2.6 | 6.3 |
Net decrease in commercial paper and short-term bank loans | (117.9) | (347.9) |
Proceeds from term debt | 525.6 | 554.3 |
Payments on term debt | (500) | (20.2) |
Net Cash Used in Financing Activities | (722.9) | (239.9) |
Effect of exchange rate changes on cash | 50.2 | (77) |
Net Decrease in Cash and Cash Equivalents | (169.1) | (172.9) |
Cash and cash equivalents at beginning of period | 2,016.4 | 1,737.6 |
Cash and cash equivalents at end of period | $ 1,847.3 | $ 1,564.7 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | NOTE A - Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q 10-K Earnings (Loss) per Share Three Months Ended March 31, 2016 2015 Additional shares 1,030,900 Antidilutive options 2,878,700 1,178,900 New Accounting Pronouncements: Leases (Topic 842) In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers The FASB also issued the following standards, which are not expected to have a material impact on the Company’s consolidated financial statements. STANDARD DESCRIPTION EFFECTIVE DATE* 2016-09 Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. January 1, 2017 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory. January 1, 2017 * The Company expects to adopt on the effective date. The Company adopted the following standards effective January 1, 2016, none of which had a material impact on the Company’s consolidated financial statements. STANDARD DESCRIPTION 2015-07 Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). 2015-05 Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. 2015-03 Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. 2015-15 Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measure of Debt Issuance Costs Associated with Line-of-Credit Arrangements. 2014-12 Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period. |
Investments in Marketable Debt
Investments in Marketable Debt Securities | 3 Months Ended |
Mar. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Marketable Debt Securities | NOTE B - Investments in Marketable Debt Securities The Company’s investments in marketable debt securities are classified as available-for-sale. These investments are stated at fair value with any unrealized gains or losses, net of tax, included as a component of accumulated other comprehensive income (loss) (AOCI). The Company utilizes third-party pricing services for all of its marketable debt security valuations. The Company reviews the pricing methodology used by the third-party third-party The Company evaluates its investment in marketable debt securities at the end of each reporting period to determine if a decline in fair value is other-than-temporary. Realized losses are recognized upon management’s determination that a decline in fair value is other-than-temporary. The determination of other-than-temporary impairment is a subjective process, requiring the use of judgments and assumptions regarding the amount and timing of recovery. The Company reviews and evaluates its investments at least quarterly to identify investments that have indications of other-than-temporary impairments. It is reasonably possible that a change in estimate could occur in the near term relating to other-than-temporary impairment. Accordingly, the Company considers several factors when evaluating debt securities for other-than-temporary impairment, including whether the decline in fair value of the security is due to increased default risk for the specific issuer or market interest-rate risk. In assessing default risk, the Company considers the collectability of principal and interest payments by monitoring changes to issuers’ credit ratings, specific credit events associated with individual issuers as well as the credit ratings of any financial guarantor, and the extent and duration to which amortized cost exceeds fair value. In assessing market interest rate risk, including benchmark interest rates and credit spreads, the Company considers its intent for selling the securities and whether it is more likely than not the Company will be able to hold these securities until the recovery of any unrealized losses. Marketable debt securities at March 31, 2016 and December 31, 2015 consisted of the following: At March 31, 2016 Amortized Unrealized Unrealized Fair U.S. tax-exempt securities $ 490.0 $ 1.7 $ .1 $ 491.6 U.S. corporate securities 79.8 .3 .1 80.0 U.S. government and agency securities 16.3 .3 16.6 Non-U.S. corporate securities 600.1 2.4 .2 602.3 Non-U.S. government securities 171.3 1.4 172.7 Other debt securities 102.6 .4 .1 102.9 $ 1,460.1 $ 6.5 $ .5 $ 1,466.1 At December 31, 2015 Amortized Unrealized Unrealized Fair U.S. tax-exempt securities $ 505.0 $ .7 $ .3 $ 505.4 U.S. corporate securities 76.7 .1 .1 76.7 U.S. government and agency securities 15.7 .1 .1 15.7 Non-U.S. corporate securities 585.6 1.8 .4 587.0 Non-U.S. government securities 192.7 1.1 .1 193.7 Other debt securities 69.6 .1 .1 69.6 $ 1,445.3 $ 3.9 $ 1.1 $ 1,448.1 The cost of marketable debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Amortization, accretion, interest and dividend income and realized gains and losses are included in investment income. The cost of securities sold is based on the specific identification method. Gross realized gains were $.8 and $.8 and gross realized losses were $.1 and nil for the three months ended March 31, 2016 and 2015, respectively. Marketable debt securities with continuous unrealized losses and their related fair values were as follows: March 31, 2016 December 31, 2015 Less than Twelve Months Less than Twelve Months Fair value $ 337.1 $ 579.0 Unrealized losses .5 1.1 For the investment securities in gross unrealized loss positions identified above, the Company does not intend to sell the investment securities. It is more likely than not that the Company will not be required to sell the investment securities before recovery of the unrealized losses, and the Company expects that the contractual principal and interest will be received on the investment securities. As a result, the Company recognized no other-than-temporary impairments during the periods presented. Contractual maturities on marketable debt securities at March 31, 2016 were as follows: Maturities: Amortized Fair Within one year $ 483.1 $ 483.6 One to five years 976.8 982.3 Six to ten years .2 .2 $ 1,460.1 $ 1,466.1 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE C - Inventories Inventories are stated at the lower of cost or market. Cost of inventories in the U.S. is determined principally by the last-in, Inventories include the following: March 31 December 31 Finished products $ 513.9 $ 443.6 Work in process and raw materials 491.1 528.9 1,005.0 972.5 Less LIFO reserve (175.9 ) (176.0 ) $ 829.1 $ 796.5 Under the LIFO method of accounting (used for approximately 49% of March 31, 2016 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. |
Finance and Other Receivables
Finance and Other Receivables | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Finance and Other Receivables | NOTE D - Finance and Other Receivables Finance and other receivables include the following: March 31 2016 December 31 Loans $ 3,982.6 $ 4,011.7 Direct financing leases 2,787.5 2,719.5 Sales-type finance leases 928.2 969.8 Dealer wholesale financing 1,912.0 1,950.1 Operating lease receivables and other 144.0 131.9 Unearned interest: Finance leases (359.6 ) (364.6 ) $ 9,394.7 $ 9,418.4 Less allowance for losses: Loans and leases (98.4 ) (99.2 ) Dealer wholesale financing (7.1 ) (7.3 ) Operating lease receivables and other (9.4 ) (8.3 ) $ 9,279.8 $ 9,303.6 Recognition of interest income and rental revenue is suspended (put on non-accrual status) when the receivable becomes more than 90 days past the contractual due date or earlier if some other event causes the Company to determine that collection is not probable. Accordingly, no finance receivables more than 90 days past due were accruing interest at March 31, 2016 or December 31, 2015. Recognition is resumed if the receivable becomes current by the payment of all amounts due under the terms of the existing contract and collection of remaining amounts is considered probable (if not contractually modified) or if the customer makes scheduled payments for three months and collection of remaining amounts is considered probable (if contractually modified). Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms. Allowance for Credit Losses The Company continuously monitors the payment performance of its finance receivables. For large retail finance customers and dealers with wholesale financing, the Company regularly reviews their financial statements and makes site visits and phone contact as appropriate. If the Company becomes aware of circumstances that could cause those customers or dealers to face financial difficulty, whether or not they are past due, the customers are placed on a watch list. The Company modifies loans and finance leases in the normal course of its Financial Services operations. The Company may modify loans and finance leases for commercial reasons or for credit reasons. Modifications for commercial reasons are changes to contract terms for customers that are not considered to be in financial difficulty. Insignificant delays are modifications extending terms up to three months for customers experiencing some short-term financial stress, but not considered to be in financial difficulty. Modifications for credit reasons are changes to contract terms for customers considered to be in financial difficulty. The Company’s modifications typically result in granting more time to pay the contractual amounts owed and charging a fee and interest for the term of the modification. When considering whether to modify customer accounts for credit reasons, the Company evaluates the creditworthiness of the customers and modifies those accounts that the Company considers likely to perform under the modified terms. When the Company modifies loans and finance leases for credit reasons and grants a concession, the modifications are classified as troubled debt restructurings (TDR). The Company does not typically grant credit modifications for customers that do not meet minimum underwriting standards since the Company normally repossesses the financed equipment in these circumstances. When such modifications do occur, they are considered TDRs. On average, modifications extended contractual terms by approximately three months in 2016 and seven months in 2015 and did not have a significant effect on the weighted average term or interest rate of the total portfolio at March 31, 2016 and December 31, 2015. The Company has developed a systematic methodology for determining the allowance for credit losses for its two portfolio segments, retail and wholesale. The retail segment consists of retail loans and direct and sales-type finance leases, net of unearned interest. The wholesale segment consists of truck inventory financing loans to dealers that are collateralized by trucks and other collateral. The wholesale segment generally has less risk than the retail segment. Wholesale receivables generally are shorter in duration than retail receivables, and the Company requires periodic reporting of the wholesale dealer’s financial condition, conducts periodic audits of the trucks being financed and in many cases, obtains guarantees or other security such as dealership assets. In determining the allowance for credit losses, retail loans and finance leases are evaluated together since they relate to a similar customer base, their contractual terms require regular payment of principal and interest, generally over 36 to 60 months, and they are secured by the same type of collateral. The allowance for credit losses consists of both specific and general reserves. The Company individually evaluates certain finance receivables for impairment. Finance receivables that are evaluated individually for impairment consist of all wholesale accounts and certain large retail accounts with past due balances or otherwise determined to be at a higher risk of loss. A finance receivable is impaired if it is considered probable the Company will be unable to collect all contractual interest and principal payments as scheduled. In addition, all retail loans and leases which have been classified as TDRs and all customer accounts over 90 days past due are considered impaired. Generally, impaired accounts are on non-accrual status. Impaired accounts classified as TDRs which have been performing for 90 consecutive days are placed on accrual status if it is deemed probable that the Company will collect all principal and interest payments. Impaired receivables are generally considered collateral dependent. Large balance retail and all wholesale impaired receivables are individually evaluated to determine the appropriate reserve for losses. The determination of reserves for large balance impaired receivables considers the fair value of the associated collateral. When the underlying collateral fair value exceeds the Company’s recorded investment, no reserve is recorded. Small balance impaired receivables with similar risk characteristics are evaluated as a separate pool to determine the appropriate reserve for losses using the historical loss information discussed below. The Company evaluates finance receivables that are not individually impaired on collective basis and determines the general allowance for credit losses for both retail and wholesale receivables based on historical loss information, using past due account data and current market conditions. Information used includes assumptions regarding the likelihood of collecting current and past due accounts, repossession rates, the recovery rate on the underlying collateral based on used truck values and other pledged collateral or recourse. The Company has developed a range of loss estimates for each of its country portfolios based on historical experience, taking into account loss frequency and severity in both strong and weak truck market conditions. A projection is made of the range of estimated credit losses inherent in the portfolio from which an amount is determined as probable based on current market conditions and other factors impacting the creditworthiness of the Company’s borrowers and their ability to repay. After determining the appropriate level of the allowance for credit losses, a provision for losses on finance receivables is charged to income as necessary to reflect management’s estimate of incurred credit losses, net of recoveries, inherent in the portfolio. In determining the fair value of the collateral, the Company uses a pricing matrix and categorizes the fair value as Level 2 in the hierarchy of fair value measurement. The pricing matrix is reviewed quarterly and updated as appropriate. The pricing matrix considers the make, model and year of the equipment as well as recent sales prices of comparable equipment through wholesale channels to the Company’s dealers (principal market). The fair value of the collateral also considers the overall condition of the equipment. Accounts are charged-off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible, which generally occurs upon repossession of the collateral. Typically the timing between the repossession and charge-off is not significant. In cases where repossession is delayed (e.g., for legal proceedings), the Company records a partial charge-off. The charge-off is determined by comparing the fair value of the collateral, less cost to sell, to the recorded investment. For the following credit quality disclosures, finance receivables are classified into two portfolio segments, wholesale and retail. The retail portfolio is further segmented into dealer retail and customer retail. The dealer wholesale segment consists of truck inventory financing to PACCAR dealers. The dealer retail segment consists of loans and leases to participating dealers and franchises that use the proceeds to fund customers’ acquisition of commercial vehicles and related equipment. The customer retail segment consists of loans and leases directly to customers for the acquisition of commercial vehicles and related equipment. Customer retail receivables are further segregated between fleet and owner/operator classes. The fleet class consists of customer retail accounts operating more than five trucks. All other customer retail accounts are considered owner/operator. These two classes have similar measurement attributes, risk characteristics and common methods to monitor and assess credit risk. The allowance for credit losses is summarized as follows: 2016 Dealer Customer Wholesale Retail Retail Other* Total Balance at January 1 $ 7.3 $ 10.3 $ 88.9 $ 8.3 $ 114.8 Provision for losses (.5 ) (.5 ) 3.2 1.2 3.4 Charge-offs (5.4 ) (.5 ) (5.9 ) Recoveries .1 .6 .7 Currency translation and other .2 .1 1.2 .4 1.9 Balance at March 31 $ 7.1 $ 9.9 $ 88.5 $ 9.4 $ 114.9 2015 Dealer Customer Wholesale Retail Retail Other* Total Balance at January 1 $ 9.0 $ 11.9 $ 93.6 $ 7.5 $ 122.0 Provision for losses .3 (.2 ) 1.9 .7 2.7 Charge-offs (2.5 ) (.5 ) (3.0 ) Recoveries .8 .1 .9 Currency translation and other (.5 ) (.2 ) (4.7 ) .6 (4.8 ) Balance at March 31 $ 8.8 $ 11.5 $ 89.1 $ 8.4 $ 117.8 * Operating leases and other trade receivables. Information regarding finance receivables evaluated and determined individually and collectively is as follows: Dealer Customer At March 31, 2016 Wholesale Retail Retail Total Recorded investment for impaired finance $ 4.6 $ 63.9 $ 68.5 Allowance for impaired finance receivables .3 4.7 5.0 Recorded investment for finance receivables 1,907.4 $ 1,493.2 5,781.6 9,182.2 Allowance for finance receivables determined 6.8 9.9 83.8 100.5 Dealer Customer At December 31, 2015 Wholesale Retail Retail Total Recorded investment for impaired finance $ 5.0 $ 64.0 $ 69.0 Allowance for impaired finance receivables .3 6.5 6.8 Recorded investment for finance receivables 1,945.1 $ 1,561.3 5,711.1 9,217.5 Allowance for finance receivables determined 7.0 10.3 82.4 99.7 The recorded investment for finance receivables that are on non-accrual status is as follows: March 31 December 31 Dealer: Wholesale $ 4.6 $ 5.0 Customer retail: Fleet 53.7 50.7 Owner/operator 10.2 10.0 $ 68.5 $ 65.7 Impaired Loans Impaired loans are summarized below. The impaired loans with specific reserve represent the unpaid principal balance. The recorded investment of impaired loans as of March 31, 2016 and December 31, 2015 was not significantly different than the unpaid principal balance. Dealer Customer Retail At March 31, 2016 Wholesale Retail Fleet Owner/ Total Impaired loans with a specific reserve $ 4.6 $ 21.9 $ 2.7 $ 29.2 Associated allowance (.3 ) (2.0 ) (.5 ) (2.8 ) $ 4.3 $ 19.9 $ 2.2 $ 26.4 Impaired loans with no specific reserve 5.8 .2 6.0 Net carrying amount of impaired loans $ 4.3 $ 25.7 $ 2.4 $ 32.4 Average recorded investment* $ 4.4 $ 27.2 $ 2.4 $ 34.0 * Represents the average during the 12 months ended March 31, 2016. Dealer Customer Retail At December 31, 2015 Wholesale Retail Fleet Owner/ Total Impaired loans with a specific reserve $ 5.0 $ 21.7 $ 2.4 $ 29.1 Associated allowance (.3 ) (3.5 ) (.5 ) (4.3 ) $ 4.7 $ 18.2 $ 1.9 $ 24.8 Impaired loans with no specific reserve 6.5 .3 6.8 Net carrying amount of impaired loans $ 4.7 $ 24.7 $ 2.2 $ 31.6 Average recorded investment* $ 7.7 $ 23.2 $ 2.6 $ 33.5 * Represents the average during the 12 months ended March 31, 2015. During the period the loans above were considered impaired, interest income recognized on a cash basis is as follows: Three Months Ended March 31, 2016 2015 Interest income recognized: Dealer wholesale Customer retail - fleet $ .3 $ .3 Customer retail - owner/operator .1 .1 $ .4 $ .4 Credit Quality The Company’s customers are principally concentrated in the transportation industry in North America, Europe and Australia. The Company’s portfolio assets are diversified over a large number of customers and dealers with no single customer or dealer balances representing over 5% of the total portfolio assets. 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 there is 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. Dealer Customer Retail At March 31, 2016 Wholesale Retail Fleet Owner/ Total Performing $ 1,892.0 $ 1,493.2 $ 4,774.7 $ 973.5 $ 9,133.4 Watch 15.4 25.1 8.3 48.8 At-risk 4.6 53.6 10.3 68.5 $ 1,912.0 $ 1,493.2 $ 4,853.4 $ 992.1 $ 9,250.7 Dealer Customer Retail At December 31, 2015 Wholesale Retail Fleet Owner/ Total Performing $ 1,922.4 $ 1,561.3 $ 4,680.6 $ 996.6 $ 9,160.9 Watch 22.7 27.0 6.9 56.6 At-risk 5.0 53.8 10.2 69.0 $ 1,950.1 $ 1,561.3 $ 4,761.4 $ 1,013.7 $ 9,286.5 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. Dealer Customer Retail At March 31, 2016 Wholesale Retail Fleet Owner/ Total Current and up to 30 days past due $ 1,911.3 $ 1,493.2 $ 4,827.1 $ 979.7 $ 9,211.3 31 – 60 days past due .4 10.8 5.8 17.0 Greater than 60 days past due .3 15.5 6.6 22.4 $ 1,912.0 $ 1,493.2 $ 4,853.4 $ 992.1 $ 9,250.7 Dealer Customer Retail At December 31, 2015 Wholesale Retail Fleet Owner/ Total Current and up to 30 days past due $ 1,949.8 $ 1,561.3 $ 4,733.6 $ 1,002.7 $ 9,247.4 31 – 60 days past due 8.3 5.4 13.7 Greater than 60 days past due .3 19.5 5.6 25.4 $ 1,950.1 $ 1,561.3 $ 4,761.4 $ 1,013.7 $ 9,286.5 Troubled Debt Restructurings The balance of TDRs was $50.1 and $52.3 at March 31, 2016 and December 31, 2015, respectively. At modification date, the pre-modification and post-modification recorded investment balances for finance receivables modified during the period by portfolio class are as follows: Three Months Ended March 31, 2016 2015 Recorded Investment Recorded Investment Pre-Modification Post-Modification Pre-Modification Post-Modification Fleet $ 7.6 $ 7.5 $ 3.9 $ 3.8 Owner/operator 1.9 1.9 .9 .9 $ 9.5 $ 9.4 $ 4.8 $ 4.7 The effect on the allowance for credit losses from such modifications was not significant at March 31, 2016 and 2015. TDRs modified during the previous twelve months that subsequently defaulted (i.e., became more than 30 days past due) during the period by portfolio class are as follows: Three Months Ended March 31, 2016 2015 Fleet $ 2.0 Owner/operator $ .2 .4 $ .2 $ 2.4 The TDRs that subsequently defaulted did not significantly impact the Company’s allowance for credit losses at March 31, 2016 and 2015. Repossessions When the Company determines a customer is not likely to meet its contractual commitments, the Company repossesses the vehicles which serve as collateral for the loans, finance leases and equipment under operating leases. The Company records the vehicles as used truck inventory included in Financial Services other assets on the Consolidated Balance Sheets. The balance of repossessed inventory at March 31, 2016 and December 31, 2015 was $21.3 and $14.6, respectively. Proceeds from the sales of repossessed assets were $12.4 and $17.3 for the three months ended March 31, 2016 and 2015, respectively. These amounts are included in proceeds from asset disposals in the Condensed Consolidated Statements of Cash Flows. Write-downs of repossessed equipment on operating leases are recorded as impairments and included in Financial Services depreciation and other expenses on the Consolidated Statements of Comprehensive (Loss) Income. |
Product Support Liabilities
Product Support Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |
Product Support Liabilities | NOTE E - Product Support Liabilities Product support liabilities are estimated future payments related to product warranties, optional extended warranties and repair and maintenance (R&M) contracts. The Company generally offers one year warranties covering most of its vehicles and related aftermarket parts. For vehicles equipped with engines manufactured by PACCAR, the Company generally offers two year warranties on the engine. Specific terms and conditions vary depending on the product and the country of sale. Optional extended warranty and R&M contracts can be purchased for periods which generally range up to five years. Warranty expenses and reserves are estimated and recorded at the time products or contracts are sold based on historical data regarding the source, frequency and cost of claims, net of any recoveries. The Company periodically assesses the adequacy of its recorded liabilities and adjusts them as appropriate to reflect actual experience. Revenue from extended warranty and R&M contracts is deferred and recognized to income generally on a straight-line basis over the contract period. Warranty and R&M costs on these contracts are recognized as incurred. Changes in product support liabilities are summarized as follows: Warranty Reserves 2016 2015 Balance at January 1 $ 346.2 $ 310.8 Cost accruals 52.3 74.7 Payments (61.5 ) (55.2 ) Change in estimates for pre-existing warranties 4.6 (2.1 ) Currency translation 2.1 (10.8 ) Balance at March 31 $ 343.7 $ 317.4 Deferred Revenues on Extended Warranties and R&M Contracts 2016 2015 Balance at January 1 $ 524.8 $ 462.0 Deferred revenues 94.3 90.5 Revenues recognized (65.9 ) (61.4 ) Currency translation 5.8 (22.3 ) Balance at March 31 $ 559.0 $ 468.8 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE F - Stockholders’ Equity Comprehensive (Loss) Income The components of comprehensive (loss) income are as follows: Three Months Ended March 31, 2016 2015 Net (loss) income $ (594.6 ) $ 378.4 Other comprehensive (loss) income (OCI): Unrealized losses on derivative contracts (6.6 ) (.2 ) Tax effect 2.1 .4 (4.5 ) .2 Unrealized gains on marketable debt securities 3.2 .5 Tax effect (1.0 ) (.2 ) 2.2 .3 Pension plans 7.0 21.7 Tax effect (2.4 ) (6.8 ) 4.6 14.9 Foreign currency translation gains (losses) 125.5 (352.9 ) Net other comprehensive income (loss) 127.8 (337.5 ) Comprehensive (loss) income $ (466.8 ) $ 40.9 Accumulated Other Comprehensive Income (Loss) The components of AOCI and the changes in AOCI, net of tax, included in the Consolidated Balance Sheets consisted of the following: Derivative Marketable Debt Pension Foreign Total Balance at January 1, 2016 $ (6.4 ) $ 2.1 $ (390.4 ) $ (622.3 ) $ (1,017.0 ) Recorded into AOCI (41.7 ) 2.7 .1 125.5 86.6 Reclassified out of AOCI 37.2 (.5 ) 4.5 41.2 Net other comprehensive (loss) income (4.5 ) 2.2 4.6 125.5 127.8 Balance at March 31, 2016 $ (10.9 ) $ 4.3 $ (385.8 ) $ (496.8 ) $ (889.2 ) Derivative Marketable Debt Pension Foreign Total Balance at January 1, 2015 $ (13.5 ) $ 5.3 $ (433.1 ) $ (138.5 ) $ (579.8 ) Recorded into AOCI 21.3 .9 8.1 (352.9 ) (322.6 ) Reclassified out of AOCI (21.1 ) (.6 ) 6.8 (14.9 ) Net other comprehensive income (loss) .2 .3 14.9 (352.9 ) (337.5 ) Balance at March 31, 2015 $ (13.3 ) $ 5.6 $ (418.2 ) $ (491.4 ) $ (917.3 ) Reclassifications out of AOCI during the three months ended March 31, 2016 and 2015 are as follows: AOCI Components Line Item in the Consolidated Statements of Comprehensive (Loss) Income Three Months Ended 2016 2015 Unrealized (gains) and losses on derivative contracts: Truck, Parts and Other Foreign-exchange contracts Net sales and revenues $ .5 Cost of sales and revenues (5.3 ) $ 3.2 Interest and other expense, net 1.7 (1.9 ) Financial Services Interest-rate contracts Interest and other borrowing expenses 57.9 (33.2 ) Pre-tax expense increase (reduction) 54.8 (31.9 ) Tax (benefit) expense (17.6 ) 10.8 After-tax expense increase (reduction) 37.2 (21.1 ) Unrealized (gains) and losses on marketable debt securities: Marketable debt securities Investment income (.7 ) (.8 ) Tax expense .2 .2 After-tax income increase (.5 ) (.6 ) Pension plans: Truck, Parts and Other Actuarial loss Cost of sales and revenues 3.4 5.4 Selling, general and administrative 2.9 4.3 6.3 9.7 Prior service costs Cost of sales and revenues .2 .2 Selling, general and administrative .1 .1 .3 .3 Financial Services Actuarial loss Selling, general and administrative .2 .4 Pre-tax expense increase 6.8 10.4 Tax benefit (2.3 ) (3.6 ) After-tax expense increase 4.5 6.8 Total reclassifications out of AOCI $ 41.2 $ (14.9) Stock Compensation Plans Stock-based compensation expense was $7.2 and $7.8 for the three months ended March 31, 2016 and 2015, respectively. Realized tax benefits related to the excess of deductible amounts over expense recognized amounted to $.1 and $1.2 for the three months ended March 31, 2016 and 2015, respectively, and have been classified as a financing cash flow. During the first quarter of 2016, the Company issued 213,814 common shares under deferred and stock compensation arrangements. Other Capital Stock Changes During the first quarter of 2016, the Company purchased 1.1 million of treasury shares. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE G - Income Taxes The effective tax rate for the first quarter of 2016 was a negative 38.4% compared to 32.6% for the first quarter of 2015. Substantially all of the difference in tax rates was due to the non-deductible European Commission charge of $942.6 in 2016. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE H - Segment 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, the European Commission charge and income taxes. The Financial Services segment’s performance is evaluated based on income before income taxes. The accounting policies of the reportable segments are the same as those applied in the consolidated financial statements as described in Note A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Truck and Parts The Truck segment includes the design and manufacture of high-quality, light-, medium- and heavy-duty commercial trucks and the Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles, 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 selling, general and administrative (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 derives its earnings primarily from financing or leasing of 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 the European Commission charge and a portion of corporate expenses. Three Months Ended March 31, 2016 2015 Net sales and revenues: Truck $ 3,472.4 $ 3,980.8 Less intersegment (201.9 ) (211.7 ) External customers 3,270.5 3,769.1 Parts 729.3 764.4 Less intersegment (9.8 ) (11.7 ) External customers 719.5 752.7 Other 20.6 26.2 4,010.6 4,548.0 Financial Services 289.4 284.7 $ 4,300.0 $ 4,832.7 Income (loss) before income taxes: Truck $ 304.1 $ 339.1 Parts 134.6 138.9 Other (includes European Commission charge of $942.6 in 2016) (954.3 ) (10.4 ) (515.6 ) 467.6 Financial Services 80.3 89.0 Investment income 5.7 5.1 $ (429.6 ) $ 561.7 Depreciation and amortization: Truck $ 109.6 $ 97.0 Parts 1.6 1.5 Other 3.9 3.6 115.1 102.1 Financial Services 127.4 119.0 $ 242.5 $ 221.1 |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | NOTE I - Derivative Financial Instruments As part of its risk management strategy, the Company enters into derivative contracts to hedge against interest rates and foreign currency risk. Certain derivative instruments designated as either cash flow hedges or fair value hedges are subject to hedge accounting. Derivative instruments that are not subject to hedge accounting are held as economic hedges. The Company’s policies prohibit the use of derivatives for speculation or trading. At the inception of each hedge relationship, the Company documents its risk management objectives, procedures and accounting treatment. All of the Company’s interest-rate and certain foreign-exchange contracts are transacted under International Swaps and Derivatives Association (ISDA) master agreements. Each agreement permits the net settlement of amounts owed in the event of default and certain other termination events. For derivative financial instruments, the Company has elected not to offset derivative positions in the balance sheet with the same counterparty under the same agreements and is not required to post or receive collateral. Exposure limits and minimum credit ratings are used to minimize the risks of counterparty default. The Company’s maximum exposure to potential default of its swap counterparties is limited to the asset position of its swap portfolio. The asset position of the Company’s swap portfolio is $90.3 at March 31, 2016. The Company uses regression analysis to assess effectiveness of interest-rate contracts on a quarterly basis. For foreign-exchange contracts, the Company performs quarterly assessments to ensure that critical terms continue to match. All components of the derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. Gains or losses on the ineffective portion of cash flow hedges are recognized currently in earnings. Hedge accounting is discontinued prospectively when the Company determines that a derivative financial instrument has ceased to be a highly effective hedge. Interest-Rate Contracts: At March 31, 2016, the notional amount of the Company’s interest-rate contracts was $3,481.6. Notional maturities for all interest-rate Foreign-Exchange Contracts: The following table presents the balance sheet classification, fair value, gross and pro forma net amounts of derivative financial instruments: March 31, 2016 December 31, 2015 Assets Liabilities Assets Liabilities Derivatives designated under hedge accounting: Interest-rate contracts: Financial Services: Other assets $ 90.3 $ 132.2 Deferred taxes and other liabilities $ 54.8 $ 46.7 Foreign-exchange contracts: Truck, Parts and Other: Other current assets 3.5 3.9 Accounts payable, accrued expenses and other 3.7 .2 Total $ 93.8 $ 58.5 $ 136.1 $ 46.9 Economic hedges: Foreign-exchange contracts: Truck, Parts and Other: Other current assets $ .3 $ .9 Accounts payable, accrued expenses and other $ 1.3 $ .3 Financial Services: Other assets .2 .3 Deferred taxes and other liabilities 2.9 1.0 Total $ .5 $ 4.2 $ 1.2 $ 1.3 Gross amounts recognized in Balance Sheets $ 94.3 $ 62.7 $ 137.3 $ 48.2 Less amounts not offset in financial instruments: Truck, Parts and Other: Foreign-exchange contracts (.8 ) (.8 ) (.4 ) (.4 ) Financial Services: Interest-rate contracts (7.8 ) (7.8 ) (3.3 ) (3.3 ) Foreign-exchange contracts (.1 ) (.1 ) (.2 ) (.2 ) Pro forma net amount $ 85.6 $ 54.0 $ 133.4 $ 44.3 Fair Value Hedges Changes in the fair value of derivatives designated as fair value hedges are recorded in earnings together with the changes in fair value of the hedged item attributable to the risk being hedged. The (income) or expense recognized in earnings related to fair value hedges was included in interest and other borrowing expenses in the Financial Services segment of the Consolidated Statements of Comprehensive (Loss) Income as follows: Three Months Ended March 31, 2016 2015 Interest-rate swaps $ (2.0 ) $ (1.4 ) Term notes 1.6 1.1 Cash Flow Hedges Substantially all of the Company’s interest-rate contracts and some foreign-exchange contracts have been designated as cash flow hedges. Changes in the fair value of derivatives designated as cash flow hedges are recorded in AOCI to the extent such hedges are considered effective. Amounts in AOCI are reclassified into net income in the same period in which the hedged transaction affects earnings. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows is 5.2 years. The Company recognized no gains or losses on the ineffective portions for both of the three months ended March 31, 2016 and 2015. The following table presents the pre-tax effects of derivative instruments recognized in other comprehensive (loss) income (OCI): 2016 2015 Interest- Foreign- Interest- Foreign- Rate Exchange Rate Exchange Three Months Ended March 31, Contracts Contracts Contracts Contracts Gain (loss) recognized in OCI: Truck, Parts and Other $ .3 Financial Services $ (61.7 ) $ 31.7 Total $ (61.7 ) $ .3 $ 31.7 Expense (income) reclassified out of AOCI into income was as follows: 2016 2015 Interest- Foreign- Interest- Foreign- Rate Exchange Rate Exchange Three Months Ended March 31, Contracts Contracts Contracts Contracts Truck, Parts and Other: Net sales and revenues $ .5 Cost of sales and revenues (5.3 ) $ 3.2 Interest and other expense, net 1.7 (1.9 ) Financial Services: Interest and other borrowing expenses $ 57.9 $ (33.2 ) Total $ 57.9 $ (3.1 ) $ (33.2 ) $ 1.3 The amount of loss recorded in AOCI at March 31, 2016 that is estimated to be reclassified into earnings in the following 12 months if interest rates and exchange rates remain unchanged is approximately $6.2, net of taxes. The fixed interest earned on finance receivables will offset the amount recognized in interest expense, resulting in a stable interest margin consistent with the Company’s risk management strategy. The amount of losses reclassified out of AOCI into net income based on the probability that the original forecasted transactions would not occur was $.6 and nil for the quarters ended March 31, 2016 and 2015, respectively. Economic Hedges For other risk management purposes, the Company enters into derivative instruments that do not qualify for hedge accounting. These derivative instruments are used to mitigate the risk of market volatility arising from borrowings and foreign currency denominated transactions. Changes in the fair value of economic hedges are recorded in earnings in the period in which the change occurs. For the quarters ended March 31, 2016 and 2015, expense (income) recognized in earnings related to interest-rate contracts was nil for both periods. The expense (income) recognized in earnings related to foreign-exchange contracts was as follows: Three Months Ended March 31, 2016 Truck, Parts and Other: Cost of sales and revenues $ 1.0 $ (1.7 ) Interest and other expense, net (.1 ) 2.1 Financial Services: Interest and other borrowing expenses 2.4 (14.5 ) Selling, general and administrative (2.1 ) (.2 ) Total $ 1.2 $ (14.3 ) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE J - Fair Value Measurements Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the Level 1 – Valuations are based on quoted prices that the Company has the ability to obtain in actively traded markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market or exchange traded market, valuation of these instruments does not require a significant degree of judgment. Level 2 – Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3 – Valuations are based on model-based techniques for which some or all of the assumptions are obtained from indirect market information that is significant to the overall fair value measurement and which require a significant degree of management judgment. There were no transfers of assets or liabilities between Level 1 and Level 2 of the fair value hierarchy during the three months ended March 31, 2016. The Company’s policy is to recognize transfers between levels at the end of the reporting period. The Company uses the following methods and assumptions to measure fair value for assets and liabilities subject to recurring fair value measurements. Marketable Securities: The fair value of U.S. government agency obligations, non-U.S. government bonds, municipal bonds, corporate bonds, asset-backed securities, commercial paper and term deposits is determined using the market approach and is primarily based on matrix pricing as a practical expedient which does not rely exclusively on quoted prices for a specific security. Significant inputs used to determine fair value include interest rates, yield curves, credit rating of the security and other observable market information and are categorized as Level 2. Derivative Financial Instruments: Assets and Liabilities Subject to Recurring Fair Value Measurement The Company’s assets and liabilities subject to recurring fair value measurements are either Level 1 or Level 2 as follows: At March 31, 2016 Level 1 Level 2 Total Assets: Marketable debt securities U.S. tax-exempt securities $ 491.6 $ 491.6 U.S. corporate securities 80.0 80.0 U.S. government and agency securities $ 15.8 .8 16.6 Non-U.S. corporate securities 602.3 602.3 Non-U.S. government securities 172.7 172.7 Other debt securities 102.9 102.9 Total marketable debt securities $ 15.8 $ 1,450.3 $ 1,466.1 Derivatives Cross currency swaps $ 87.4 $ 87.4 Interest-rate swaps 2.9 2.9 Foreign-exchange contracts 4.0 4.0 Total derivative assets $ 94.3 $ 94.3 Liabilities: Derivatives Cross currency swaps $ 39.2 $ 39.2 Interest-rate swaps 15.6 15.6 Foreign-exchange contracts 7.9 7.9 Total derivative liabilities $ 62.7 $ 62.7 At December 31, 2015 Level 1 Level 2 Total Assets: Marketable debt securities U.S. tax-exempt securities $ 505.4 $ 505.4 U.S. corporate securities 76.7 76.7 U.S. government and agency securities $ 15.1 .6 15.7 Non-U.S. corporate securities 587.0 587.0 Non-U.S. government securities 193.7 193.7 Other debt securities 69.6 69.6 Total marketable debt securities $ 15.1 $ 1,433.0 $ 1,448.1 Derivatives Cross currency swaps $ 130.5 $ 130.5 Interest-rate swaps 1.7 1.7 Foreign-exchange contracts 5.1 5.1 Total derivative assets $ 137.3 $ 137.3 Liabilities: Derivatives Cross currency swaps $ 37.2 $ 37.2 Interest-rate swaps 9.5 9.5 Foreign-exchange contracts 1.5 1.5 Total derivative liabilities $ 48.2 $ 48.2 Fair Value Disclosure of Other Financial Instruments For financial instruments that are not recognized at fair value, the Company uses the following methods and assumptions to determine the fair value. These instruments are categorized as Level 2, except cash which is categorized as Level 1 and fixed rate loans which are categorized as Level 3. Cash and Cash Equivalents: Financial Services Net Receivables: Debt: The Company’s estimate of fair value for fixed rate loans and debt that are not carried at fair value was as follows: March 31, 2016 December 31, 2015 Carrying Fair Value Carrying Fair Assets: Financial Services fixed rate loans $ 3,633.3 $ 3,727.8 $ 3,660.6 $ 3,729.0 Liabilities: Financial Services fixed rate debt 4,413.0 4,459.5 4,167.9 4,192.2 |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | NOTE K - Employee Benefit Plans The Company has several defined benefit pension plans, which cover a majority of its employees. The following information details the components of net pension expense for the Company’s defined benefit plans: Three Months Ended March 31, 2016 2015 Service cost $ 21.9 $ 21.6 Interest on projected benefit obligation 23.6 22.9 Expected return on assets (35.6 ) (34.8 ) Amortization of prior service costs .3 .3 Recognized actuarial loss 6.5 10.1 Net pension expense $ 16.7 $ 20.1 During the three months ended March 31, 2016 and 2015, the Company contributed $5.1 and $2.7 to its pension plans, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE L - Commitments and Contingencies In January 2011, the European Commission (EC) commenced an investigation of all major European commercial vehicle manufacturers, including subsidiaries of the Company. In November 2014, the EC issued a Statement of Objections to the manufacturers, including DAF Trucks N.V., its subsidiary DAF Trucks Deutschland GmbH and the Company as their parent. The Statement of Objections is a procedural step in which the EC expressed its preliminary view that the manufacturers participated in anticompetitive practices in the European Union. The EC indicated it will seek to impose significant fines on the manufacturers. DAF is cooperating with the EC. Based on recent developments, the Company recorded a charge of €850 ($942.6) in the first quarter of 2016. The Company will continue to evaluate the amount of the charge pending final resolution of the proceeding. The charge is not tax deductible. The Company’s subsidiary, DAF Trucks N.V., has sufficient liquidity to fund payment of the charge. The Company and its subsidiaries are parties to various lawsuits incidental to the ordinary course of business. Except for the EC matter noted above, management believes that the disposition of such lawsuits will not materially affect the Company’s business or financial condition. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Investment in Marketable Debt Securities | The Company’s investments in marketable debt securities are classified as available-for-sale. These investments are stated at fair value with any unrealized gains or losses, net of tax, included as a component of accumulated other comprehensive income (loss) (AOCI). The Company utilizes third-party pricing services for all of its marketable debt security valuations. The Company reviews the pricing methodology used by the third-party third-party The Company evaluates its investment in marketable debt securities at the end of each reporting period to determine if a decline in fair value is other-than-temporary. Realized losses are recognized upon management’s determination that a decline in fair value is other-than-temporary. The determination of other-than-temporary impairment is a subjective process, requiring the use of judgments and assumptions regarding the amount and timing of recovery. The Company reviews and evaluates its investments at least quarterly to identify investments that have indications of other-than-temporary impairments. It is reasonably possible that a change in estimate could occur in the near term relating to other-than-temporary impairment. Accordingly, the Company considers several factors when evaluating debt securities for other-than-temporary impairment, including whether the decline in fair value of the security is due to increased default risk for the specific issuer or market interest-rate risk. In assessing default risk, the Company considers the collectability of principal and interest payments by monitoring changes to issuers’ credit ratings, specific credit events associated with individual issuers as well as the credit ratings of any financial guarantor, and the extent and duration to which amortized cost exceeds fair value. In assessing market interest rate risk, including benchmark interest rates and credit spreads, the Company considers its intent for selling the securities and whether it is more likely than not the Company will be able to hold these securities until the recovery of any unrealized losses. |
Inventories | Inventories are stated at the lower of cost or market. Cost of inventories in the U.S. is determined principally by the last-in, |
Allowance for Credit Losses | Allowance for Credit Losses The Company continuously monitors the payment performance of its finance receivables. For large retail finance customers and dealers with wholesale financing, the Company regularly reviews their financial statements and makes site visits and phone contact as appropriate. If the Company becomes aware of circumstances that could cause those customers or dealers to face financial difficulty, whether or not they are past due, the customers are placed on a watch list. The Company modifies loans and finance leases in the normal course of its Financial Services operations. The Company may modify loans and finance leases for commercial reasons or for credit reasons. Modifications for commercial reasons are changes to contract terms for customers that are not considered to be in financial difficulty. Insignificant delays are modifications extending terms up to three months for customers experiencing some short-term financial stress, but not considered to be in financial difficulty. Modifications for credit reasons are changes to contract terms for customers considered to be in financial difficulty. The Company’s modifications typically result in granting more time to pay the contractual amounts owed and charging a fee and interest for the term of the modification. When considering whether to modify customer accounts for credit reasons, the Company evaluates the creditworthiness of the customers and modifies those accounts that the Company considers likely to perform under the modified terms. When the Company modifies loans and finance leases for credit reasons and grants a concession, the modifications are classified as troubled debt restructurings (TDR). The Company does not typically grant credit modifications for customers that do not meet minimum underwriting standards since the Company normally repossesses the financed equipment in these circumstances. When such modifications do occur, they are considered TDRs. On average, modifications extended contractual terms by approximately three months in 2016 and seven months in 2015 and did not have a significant effect on the weighted average term or interest rate of the total portfolio at March 31, 2016 and December 31, 2015. The Company has developed a systematic methodology for determining the allowance for credit losses for its two portfolio segments, retail and wholesale. The retail segment consists of retail loans and direct and sales-type finance leases, net of unearned interest. The wholesale segment consists of truck inventory financing loans to dealers that are collateralized by trucks and other collateral. The wholesale segment generally has less risk than the retail segment. Wholesale receivables generally are shorter in duration than retail receivables, and the Company requires periodic reporting of the wholesale dealer’s financial condition, conducts periodic audits of the trucks being financed and in many cases, obtains guarantees or other security such as dealership assets. In determining the allowance for credit losses, retail loans and finance leases are evaluated together since they relate to a similar customer base, their contractual terms require regular payment of principal and interest, generally over 36 to 60 months, and they are secured by the same type of collateral. The allowance for credit losses consists of both specific and general reserves. The Company individually evaluates certain finance receivables for impairment. Finance receivables that are evaluated individually for impairment consist of all wholesale accounts and certain large retail accounts with past due balances or otherwise determined to be at a higher risk of loss. A finance receivable is impaired if it is considered probable the Company will be unable to collect all contractual interest and principal payments as scheduled. In addition, all retail loans and leases which have been classified as TDRs and all customer accounts over 90 days past due are considered impaired. Generally, impaired accounts are on non-accrual status. Impaired accounts classified as TDRs which have been performing for 90 consecutive days are placed on accrual status if it is deemed probable that the Company will collect all principal and interest payments. Impaired receivables are generally considered collateral dependent. Large balance retail and all wholesale impaired receivables are individually evaluated to determine the appropriate reserve for losses. The determination of reserves for large balance impaired receivables considers the fair value of the associated collateral. When the underlying collateral fair value exceeds the Company’s recorded investment, no reserve is recorded. Small balance impaired receivables with similar risk characteristics are evaluated as a separate pool to determine the appropriate reserve for losses using the historical loss information discussed below. The Company evaluates finance receivables that are not individually impaired on collective basis and determines the general allowance for credit losses for both retail and wholesale receivables based on historical loss information, using past due account data and current market conditions. Information used includes assumptions regarding the likelihood of collecting current and past due accounts, repossession rates, the recovery rate on the underlying collateral based on used truck values and other pledged collateral or recourse. The Company has developed a range of loss estimates for each of its country portfolios based on historical experience, taking into account loss frequency and severity in both strong and weak truck market conditions. A projection is made of the range of estimated credit losses inherent in the portfolio from which an amount is determined as probable based on current market conditions and other factors impacting the creditworthiness of the Company’s borrowers and their ability to repay. After determining the appropriate level of the allowance for credit losses, a provision for losses on finance receivables is charged to income as necessary to reflect management’s estimate of incurred credit losses, net of recoveries, inherent in the portfolio. In determining the fair value of the collateral, the Company uses a pricing matrix and categorizes the fair value as Level 2 in the hierarchy of fair value measurement. The pricing matrix is reviewed quarterly and updated as appropriate. The pricing matrix considers the make, model and year of the equipment as well as recent sales prices of comparable equipment through wholesale channels to the Company’s dealers (principal market). The fair value of the collateral also considers the overall condition of the equipment. Accounts are charged-off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible, which generally occurs upon repossession of the collateral. Typically the timing between the repossession and charge-off is not significant. In cases where repossession is delayed (e.g., for legal proceedings), the Company records a partial charge-off. The charge-off is determined by comparing the fair value of the collateral, less cost to sell, to the recorded investment. |
Product Support Liabilities | Product support liabilities are estimated future payments related to product warranties, optional extended warranties and repair and maintenance (R&M) contracts. The Company generally offers one year warranties covering most of its vehicles and related aftermarket parts. For vehicles equipped with engines manufactured by PACCAR, the Company generally offers two year warranties on the engine. Specific terms and conditions vary depending on the product and the country of sale. Optional extended warranty and R&M contracts can be purchased for periods which generally range up to five years. Warranty expenses and reserves are estimated and recorded at the time products or contracts are sold based on historical data regarding the source, frequency and cost of claims, net of any recoveries. The Company periodically assesses the adequacy of its recorded liabilities and adjusts them as appropriate to reflect actual experience. Revenue from extended warranty and R&M contracts is deferred and recognized to income generally on a straight-line basis over the contract period. Warranty and R&M costs on these contracts are recognized as incurred. |
Derivative Financial Instruments | As part of its risk management strategy, the Company enters into derivative contracts to hedge against interest rates and foreign currency risk. Certain derivative instruments designated as either cash flow hedges or fair value hedges are subject to hedge accounting. Derivative instruments that are not subject to hedge accounting are held as economic hedges. The Company’s policies prohibit the use of derivatives for speculation or trading. At the inception of each hedge relationship, the Company documents its risk management objectives, procedures and accounting treatment. All of the Company’s interest-rate and certain foreign-exchange contracts are transacted under International Swaps and Derivatives Association (ISDA) master agreements. Each agreement permits the net settlement of amounts owed in the event of default and certain other termination events. For derivative financial instruments, the Company has elected not to offset derivative positions in the balance sheet with the same counterparty under the same agreements and is not required to post or receive collateral. Exposure limits and minimum credit ratings are used to minimize the risks of counterparty default. The Company’s maximum exposure to potential default of its swap counterparties is limited to the asset position of its swap portfolio. The asset position of the Company’s swap portfolio is $90.3 at March 31, 2016. The Company uses regression analysis to assess effectiveness of interest-rate contracts on a quarterly basis. For foreign-exchange contracts, the Company performs quarterly assessments to ensure that critical terms continue to match. All components of the derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. Gains or losses on the ineffective portion of cash flow hedges are recognized currently in earnings. Hedge accounting is discontinued prospectively when the Company determines that a derivative financial instrument has ceased to be a highly effective hedge. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Dilutive and Antidilutive Options | The dilutive and antidilutive options are shown separately in the table below. Three Months Ended March 31, 2016 2015 Additional shares 1,030,900 Antidilutive options 2,878,700 1,178,900 |
Investments in Marketable Deb20
Investments in Marketable Debt Securities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Debt Securities | Marketable debt securities at March 31, 2016 and December 31, 2015 consisted of the following: At March 31, 2016 Amortized Unrealized Unrealized Fair U.S. tax-exempt securities $ 490.0 $ 1.7 $ .1 $ 491.6 U.S. corporate securities 79.8 .3 .1 80.0 U.S. government and agency securities 16.3 .3 16.6 Non-U.S. corporate securities 600.1 2.4 .2 602.3 Non-U.S. government securities 171.3 1.4 172.7 Other debt securities 102.6 .4 .1 102.9 $ 1,460.1 $ 6.5 $ .5 $ 1,466.1 At December 31, 2015 Amortized Unrealized Unrealized Fair U.S. tax-exempt securities $ 505.0 $ .7 $ .3 $ 505.4 U.S. corporate securities 76.7 .1 .1 76.7 U.S. government and agency securities 15.7 .1 .1 15.7 Non-U.S. corporate securities 585.6 1.8 .4 587.0 Non-U.S. government securities 192.7 1.1 .1 193.7 Other debt securities 69.6 .1 .1 69.6 $ 1,445.3 $ 3.9 $ 1.1 $ 1,448.1 |
Marketable Debt Securities Continuous Unrealized Losses | Marketable debt securities with continuous unrealized losses and their related fair values were as follows: March 31, 2016 December 31, 2015 Less than Twelve Months Less than Twelve Months Fair value $ 337.1 $ 579.0 Unrealized losses .5 1.1 |
Contractual Maturities of Debt Securities | Contractual maturities on marketable debt securities at March 31, 2016 were as follows: Maturities: Amortized Fair Within one year $ 483.1 $ 483.6 One to five years 976.8 982.3 Six to ten years .2 .2 $ 1,460.1 $ 1,466.1 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories Table | Inventories include the following: March 31 December 31 Finished products $ 513.9 $ 443.6 Work in process and raw materials 491.1 528.9 1,005.0 972.5 Less LIFO reserve (175.9 ) (176.0 ) $ 829.1 $ 796.5 |
Finance and Other Receivables (
Finance and Other Receivables (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Finance and Other Receivables | Finance and other receivables include the following: March 31 2016 December 31 Loans $ 3,982.6 $ 4,011.7 Direct financing leases 2,787.5 2,719.5 Sales-type finance leases 928.2 969.8 Dealer wholesale financing 1,912.0 1,950.1 Operating lease receivables and other 144.0 131.9 Unearned interest: Finance leases (359.6 ) (364.6 ) $ 9,394.7 $ 9,418.4 Less allowance for losses: Loans and leases (98.4 ) (99.2 ) Dealer wholesale financing (7.1 ) (7.3 ) Operating lease receivables and other (9.4 ) (8.3 ) $ 9,279.8 $ 9,303.6 |
Allowance for Credit Losses | The allowance for credit losses is summarized as follows: 2016 Dealer Customer Wholesale Retail Retail Other* Total Balance at January 1 $ 7.3 $ 10.3 $ 88.9 $ 8.3 $ 114.8 Provision for losses (.5 ) (.5 ) 3.2 1.2 3.4 Charge-offs (5.4 ) (.5 ) (5.9 ) Recoveries .1 .6 .7 Currency translation and other .2 .1 1.2 .4 1.9 Balance at March 31 $ 7.1 $ 9.9 $ 88.5 $ 9.4 $ 114.9 2015 Dealer Customer Wholesale Retail Retail Other* Total Balance at January 1 $ 9.0 $ 11.9 $ 93.6 $ 7.5 $ 122.0 Provision for losses .3 (.2 ) 1.9 .7 2.7 Charge-offs (2.5 ) (.5 ) (3.0 ) Recoveries .8 .1 .9 Currency translation and other (.5 ) (.2 ) (4.7 ) .6 (4.8 ) Balance at March 31 $ 8.8 $ 11.5 $ 89.1 $ 8.4 $ 117.8 * Operating leases and other trade receivables. |
Finance Receivable Evaluated and Determined Individually and Collectively | Information regarding finance receivables evaluated and determined individually and collectively is as follows: Dealer Customer At March 31, 2016 Wholesale Retail Retail Total Recorded investment for impaired finance $ 4.6 $ 63.9 $ 68.5 Allowance for impaired finance receivables .3 4.7 5.0 Recorded investment for finance receivables 1,907.4 $ 1,493.2 5,781.6 9,182.2 Allowance for finance receivables determined 6.8 9.9 83.8 100.5 Dealer Customer At December 31, 2015 Wholesale Retail Retail Total Recorded investment for impaired finance $ 5.0 $ 64.0 $ 69.0 Allowance for impaired finance receivables .3 6.5 6.8 Recorded investment for finance receivables 1,945.1 $ 1,561.3 5,711.1 9,217.5 Allowance for finance receivables determined 7.0 10.3 82.4 99.7 |
Recorded Investment for Finance Receivables that are on Non-Accrual Status | The recorded investment for finance receivables that are on non-accrual status is as follows: March 31 December 31 Dealer: Wholesale $ 4.6 $ 5.0 Customer retail: Fleet 53.7 50.7 Owner/operator 10.2 10.0 $ 68.5 $ 65.7 |
Impaired Loans and Specific Reserve | The recorded investment of impaired loans as of March 31, 2016 and December 31, 2015 was not significantly different than the unpaid principal balance. Dealer Customer Retail At March 31, 2016 Wholesale Retail Fleet Owner/ Total Impaired loans with a specific reserve $ 4.6 $ 21.9 $ 2.7 $ 29.2 Associated allowance (.3 ) (2.0 ) (.5 ) (2.8 ) $ 4.3 $ 19.9 $ 2.2 $ 26.4 Impaired loans with no specific reserve 5.8 .2 6.0 Net carrying amount of impaired loans $ 4.3 $ 25.7 $ 2.4 $ 32.4 Average recorded investment* $ 4.4 $ 27.2 $ 2.4 $ 34.0 * Represents the average during the 12 months ended March 31, 2016. Dealer Customer Retail At December 31, 2015 Wholesale Retail Fleet Owner/ Total Impaired loans with a specific reserve $ 5.0 $ 21.7 $ 2.4 $ 29.1 Associated allowance (.3 ) (3.5 ) (.5 ) (4.3 ) $ 4.7 $ 18.2 $ 1.9 $ 24.8 Impaired loans with no specific reserve 6.5 .3 6.8 Net carrying amount of impaired loans $ 4.7 $ 24.7 $ 2.2 $ 31.6 Average recorded investment* $ 7.7 $ 23.2 $ 2.6 $ 33.5 * Represents the average during the 12 months ended March 31, 2015. |
Interest Income Recognized on Cash Basis | During the period the loans above were considered impaired, interest income recognized on a cash basis is as follows: Three Months Ended March 31, 2016 2015 Interest income recognized: Dealer wholesale Customer retail - fleet $ .3 $ .3 Customer retail - owner/operator .1 .1 $ .4 $ .4 |
Finance Receivables by Credit Quality Indicator and Portfolio Class | The tables below summarize the Company’s finance receivables by credit quality indicator and portfolio class. Dealer Customer Retail At March 31, 2016 Wholesale Retail Fleet Owner/ Total Performing $ 1,892.0 $ 1,493.2 $ 4,774.7 $ 973.5 $ 9,133.4 Watch 15.4 25.1 8.3 48.8 At-risk 4.6 53.6 10.3 68.5 $ 1,912.0 $ 1,493.2 $ 4,853.4 $ 992.1 $ 9,250.7 Dealer Customer Retail At December 31, 2015 Wholesale Retail Fleet Owner/ Total Performing $ 1,922.4 $ 1,561.3 $ 4,680.6 $ 996.6 $ 9,160.9 Watch 22.7 27.0 6.9 56.6 At-risk 5.0 53.8 10.2 69.0 $ 1,950.1 $ 1,561.3 $ 4,761.4 $ 1,013.7 $ 9,286.5 |
Financing Receivables by Aging Category | 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. Dealer Customer Retail At March 31, 2016 Wholesale Retail Fleet Owner/ Total Current and up to 30 days past due $ 1,911.3 $ 1,493.2 $ 4,827.1 $ 979.7 $ 9,211.3 31 – 60 days past due .4 10.8 5.8 17.0 Greater than 60 days past due .3 15.5 6.6 22.4 $ 1,912.0 $ 1,493.2 $ 4,853.4 $ 992.1 $ 9,250.7 Dealer Customer Retail At December 31, 2015 Wholesale Retail Fleet Owner/ Total Current and up to 30 days past due $ 1,949.8 $ 1,561.3 $ 4,733.6 $ 1,002.7 $ 9,247.4 31 – 60 days past due 8.3 5.4 13.7 Greater than 60 days past due .3 19.5 5.6 25.4 $ 1,950.1 $ 1,561.3 $ 4,761.4 $ 1,013.7 $ 9,286.5 |
Pre- and Post-Modification Recorded Investment Balances by Portfolio Class | At modification date, the pre-modification and post-modification recorded investment balances for finance receivables modified during the period by portfolio class are as follows: Three Months Ended March 31, 2016 2015 Recorded Investment Recorded Investment Pre-Modification Post-Modification Pre-Modification Post-Modification Fleet $ 7.6 $ 7.5 $ 3.9 $ 3.8 Owner/operator 1.9 1.9 .9 .9 $ 9.5 $ 9.4 $ 4.8 $ 4.7 |
TDRs Modified that Subsequently Defaulted (i.e., Became More than 30 Days Past-Due) by Portfolio Class | TDRs modified during the previous twelve months that subsequently defaulted (i.e., became more than 30 days past due) during the period by portfolio class are as follows: Three Months Ended March 31, 2016 2015 Fleet $ 2.0 Owner/operator $ .2 .4 $ .2 $ 2.4 |
Product Support Liabilities (Ta
Product Support Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |
Changes in Product Support Liabilities | Changes in product support liabilities are summarized as follows: Warranty Reserves 2016 2015 Balance at January 1 $ 346.2 $ 310.8 Cost accruals 52.3 74.7 Payments (61.5 ) (55.2 ) Change in estimates for pre-existing warranties 4.6 (2.1 ) Currency translation 2.1 (10.8 ) Balance at March 31 $ 343.7 $ 317.4 Deferred Revenues on Extended Warranties and R&M Contracts 2016 2015 Balance at January 1 $ 524.8 $ 462.0 Deferred revenues 94.3 90.5 Revenues recognized (65.9 ) (61.4 ) Currency translation 5.8 (22.3 ) Balance at March 31 $ 559.0 $ 468.8 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Components of Comprehensive (Loss) Income, Net of Related Tax | The components of comprehensive (loss) income are as follows: Three Months Ended March 31, 2016 2015 Net (loss) income $ (594.6 ) $ 378.4 Other comprehensive (loss) income (OCI): Unrealized losses on derivative contracts (6.6 ) (.2 ) Tax effect 2.1 .4 (4.5 ) .2 Unrealized gains on marketable debt securities 3.2 .5 Tax effect (1.0 ) (.2 ) 2.2 .3 Pension plans 7.0 21.7 Tax effect (2.4 ) (6.8 ) 4.6 14.9 Foreign currency translation gains (losses) 125.5 (352.9 ) Net other comprehensive income (loss) 127.8 (337.5 ) Comprehensive (loss) income $ (466.8 ) $ 40.9 |
Changes in Accumulated Other Comprehensive Income (loss) by Component | The components of AOCI and the changes in AOCI, net of tax, included in the Consolidated Balance Sheets consisted of the following: Derivative Marketable Debt Pension Foreign Total Balance at January 1, 2016 $ (6.4 ) $ 2.1 $ (390.4 ) $ (622.3 ) $ (1,017.0 ) Recorded into AOCI (41.7 ) 2.7 .1 125.5 86.6 Reclassified out of AOCI 37.2 (.5 ) 4.5 41.2 Net other comprehensive (loss) income (4.5 ) 2.2 4.6 125.5 127.8 Balance at March 31, 2016 $ (10.9 ) $ 4.3 $ (385.8 ) $ (496.8 ) $ (889.2 ) Derivative Marketable Debt Pension Foreign Total Balance at January 1, 2015 $ (13.5 ) $ 5.3 $ (433.1 ) $ (138.5 ) $ (579.8 ) Recorded into AOCI 21.3 .9 8.1 (352.9 ) (322.6 ) Reclassified out of AOCI (21.1 ) (.6 ) 6.8 (14.9 ) Net other comprehensive income (loss) .2 .3 14.9 (352.9 ) (337.5 ) Balance at March 31, 2015 $ (13.3 ) $ 5.6 $ (418.2 ) $ (491.4 ) $ (917.3 ) |
Reclassifications Out of Accumulated Other Comprehensive Income | Reclassifications out of AOCI during the three months ended March 31, 2016 and 2015 are as follows: AOCI Components Line Item in the Consolidated Statements of Comprehensive (Loss) Income Three Months Ended 2016 2015 Unrealized (gains) and losses on derivative contracts: Truck, Parts and Other Foreign-exchange contracts Net sales and revenues $ .5 Cost of sales and revenues (5.3 ) $ 3.2 Interest and other expense, net 1.7 (1.9 ) Financial Services Interest-rate contracts Interest and other borrowing expenses 57.9 (33.2 ) Pre-tax expense increase (reduction) 54.8 (31.9 ) Tax (benefit) expense (17.6 ) 10.8 After-tax expense increase (reduction) 37.2 (21.1 ) Unrealized (gains) and losses on marketable debt securities: Marketable debt securities Investment income (.7 ) (.8 ) Tax expense .2 .2 After-tax income increase (.5 ) (.6 ) Pension plans: Truck, Parts and Other Actuarial loss Cost of sales and revenues 3.4 5.4 Selling, general and administrative 2.9 4.3 6.3 9.7 Prior service costs Cost of sales and revenues .2 .2 Selling, general and administrative .1 .1 .3 .3 Financial Services Actuarial loss Selling, general and administrative .2 .4 Pre-tax expense increase 6.8 10.4 Tax benefit (2.3 ) (3.6 ) After-tax expense increase 4.5 6.8 Total reclassifications out of AOCI $ 41.2 $ (14.9) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting Information by Segment | Three Months Ended March 31, 2016 2015 Net sales and revenues: Truck $ 3,472.4 $ 3,980.8 Less intersegment (201.9 ) (211.7 ) External customers 3,270.5 3,769.1 Parts 729.3 764.4 Less intersegment (9.8 ) (11.7 ) External customers 719.5 752.7 Other 20.6 26.2 4,010.6 4,548.0 Financial Services 289.4 284.7 $ 4,300.0 $ 4,832.7 Income (loss) before income taxes: Truck $ 304.1 $ 339.1 Parts 134.6 138.9 Other (includes European Commission charge of $942.6 in 2016) (954.3 ) (10.4 ) (515.6 ) 467.6 Financial Services 80.3 89.0 Investment income 5.7 5.1 $ (429.6 ) $ 561.7 Depreciation and amortization: Truck $ 109.6 $ 97.0 Parts 1.6 1.5 Other 3.9 3.6 115.1 102.1 Financial Services 127.4 119.0 $ 242.5 $ 221.1 |
Derivative Financial Instrume26
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Balance Sheet Classifications, Fair Value, Gross and Pro Forma Net Amounts of Derivative Financial Instruments | The following table presents the balance sheet classification, fair value, gross and pro forma net amounts of derivative financial instruments: March 31, 2016 December 31, 2015 Assets Liabilities Assets Liabilities Derivatives designated under hedge accounting: Interest-rate contracts: Financial Services: Other assets $ 90.3 $ 132.2 Deferred taxes and other liabilities $ 54.8 $ 46.7 Foreign-exchange contracts: Truck, Parts and Other: Other current assets 3.5 3.9 Accounts payable, accrued expenses and other 3.7 .2 Total $ 93.8 $ 58.5 $ 136.1 $ 46.9 Economic hedges: Foreign-exchange contracts: Truck, Parts and Other: Other current assets $ .3 $ .9 Accounts payable, accrued expenses and other $ 1.3 $ .3 Financial Services: Other assets .2 .3 Deferred taxes and other liabilities 2.9 1.0 Total $ .5 $ 4.2 $ 1.2 $ 1.3 Gross amounts recognized in Balance Sheets $ 94.3 $ 62.7 $ 137.3 $ 48.2 Less amounts not offset in financial instruments: Truck, Parts and Other: Foreign-exchange contracts (.8 ) (.8 ) (.4 ) (.4 ) Financial Services: Interest-rate contracts (7.8 ) (7.8 ) (3.3 ) (3.3 ) Foreign-exchange contracts (.1 ) (.1 ) (.2 ) (.2 ) Pro forma net amount $ 85.6 $ 54.0 $ 133.4 $ 44.3 |
Cash Flow Hedging | |
Gains/Losses of Derivative Financial Instruments | The following table presents the pre-tax effects of derivative instruments recognized in other comprehensive (loss) income (OCI): 2016 2015 Interest- Foreign- Interest- Foreign- Rate Exchange Rate Exchange Three Months Ended March 31, Contracts Contracts Contracts Contracts Gain (loss) recognized in OCI: Truck, Parts and Other $ .3 Financial Services $ (61.7 ) $ 31.7 Total $ (61.7 ) $ .3 $ 31.7 Expense (income) reclassified out of AOCI into income was as follows: 2016 2015 Interest- Foreign- Interest- Foreign- Rate Exchange Rate Exchange Three Months Ended March 31, Contracts Contracts Contracts Contracts Truck, Parts and Other: Net sales and revenues $ .5 Cost of sales and revenues (5.3 ) $ 3.2 Interest and other expense, net 1.7 (1.9 ) Financial Services: Interest and other borrowing expenses $ 57.9 $ (33.2 ) Total $ 57.9 $ (3.1 ) $ (33.2 ) $ 1.3 |
Economic Hedges | |
Gains/Losses of Derivative Financial Instruments | The expense (income) recognized in earnings related to foreign-exchange contracts was as follows: Three Months Ended March 31, 2016 Truck, Parts and Other: Cost of sales and revenues $ 1.0 $ (1.7 ) Interest and other expense, net (.1 ) 2.1 Financial Services: Interest and other borrowing expenses 2.4 (14.5 ) Selling, general and administrative (2.1 ) (.2 ) Total $ 1.2 $ (14.3 ) |
Financial Services | Fair Value Hedging | |
Gains/Losses of Derivative Financial Instruments | The (income) or expense recognized in earnings related to fair value hedges was included in interest and other borrowing expenses in the Financial Services segment of the Consolidated Statements of Comprehensive (Loss) Income as follows: Three Months Ended March 31, 2016 2015 Interest-rate swaps $ (2.0 ) $ (1.4 ) Term notes 1.6 1.1 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Subject to Recurring Fair Value Measurements | The Company’s assets and liabilities subject to recurring fair value measurements are either Level 1 or Level 2 as follows: At March 31, 2016 Level 1 Level 2 Total Assets: Marketable debt securities U.S. tax-exempt securities $ 491.6 $ 491.6 U.S. corporate securities 80.0 80.0 U.S. government and agency securities $ 15.8 .8 16.6 Non-U.S. corporate securities 602.3 602.3 Non-U.S. government securities 172.7 172.7 Other debt securities 102.9 102.9 Total marketable debt securities $ 15.8 $ 1,450.3 $ 1,466.1 Derivatives Cross currency swaps $ 87.4 $ 87.4 Interest-rate swaps 2.9 2.9 Foreign-exchange contracts 4.0 4.0 Total derivative assets $ 94.3 $ 94.3 Liabilities: Derivatives Cross currency swaps $ 39.2 $ 39.2 Interest-rate swaps 15.6 15.6 Foreign-exchange contracts 7.9 7.9 Total derivative liabilities $ 62.7 $ 62.7 At December 31, 2015 Level 1 Level 2 Total Assets: Marketable debt securities U.S. tax-exempt securities $ 505.4 $ 505.4 U.S. corporate securities 76.7 76.7 U.S. government and agency securities $ 15.1 .6 15.7 Non-U.S. corporate securities 587.0 587.0 Non-U.S. government securities 193.7 193.7 Other debt securities 69.6 69.6 Total marketable debt securities $ 15.1 $ 1,433.0 $ 1,448.1 Derivatives Cross currency swaps $ 130.5 $ 130.5 Interest-rate swaps 1.7 1.7 Foreign-exchange contracts 5.1 5.1 Total derivative assets $ 137.3 $ 137.3 Liabilities: Derivatives Cross currency swaps $ 37.2 $ 37.2 Interest-rate swaps 9.5 9.5 Foreign-exchange contracts 1.5 1.5 Total derivative liabilities $ 48.2 $ 48.2 |
Carrying Amount and Fair Value of Financial Services Fixed-Rate Loans and Fixed-Rate Debt | The Company’s estimate of fair value for fixed rate loans and debt that are not carried at fair value was as follows: March 31, 2016 December 31, 2015 Carrying Fair Value Carrying Fair Assets: Financial Services fixed rate loans $ 3,633.3 $ 3,727.8 $ 3,660.6 $ 3,729.0 Liabilities: Financial Services fixed rate debt 4,413.0 4,459.5 4,167.9 4,192.2 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of Net Pension Expense | The following information details the components of net pension expense for the Company’s defined benefit plans: Three Months Ended March 31, 2016 2015 Service cost $ 21.9 $ 21.6 Interest on projected benefit obligation 23.6 22.9 Expected return on assets (35.6 ) (34.8 ) Amortization of prior service costs .3 .3 Recognized actuarial loss 6.5 10.1 Net pension expense $ 16.7 $ 20.1 |
Earning Per Share - Additional
Earning Per Share - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive options | 2,878,700 | 1,178,900 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive options | 548,800 |
Dilutive and Antidilutive Optio
Dilutive and Antidilutive Options (Detail) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Additional shares | 1,030,900 | |
Antidilutive options | 2,878,700 | 1,178,900 |
Marketable Debt Securities (Det
Marketable Debt Securities (Detail) - Truck, Parts and Other - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | $ 1,460.1 | $ 1,445.3 | |
Unrealized Gains | 6.5 | 3.9 | |
Unrealized Losses | 0.5 | 1.1 | |
Fair Value | 1,466.1 | 1,448.1 | [1] |
U.S. tax-exempt securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 490 | 505 | |
Unrealized Gains | 1.7 | 0.7 | |
Unrealized Losses | 0.1 | 0.3 | |
Fair Value | 491.6 | 505.4 | |
U.S. corporate securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 79.8 | 76.7 | |
Unrealized Gains | 0.3 | 0.1 | |
Unrealized Losses | 0.1 | 0.1 | |
Fair Value | 80 | 76.7 | |
U.S. government and agency securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 16.3 | 15.7 | |
Unrealized Gains | 0.3 | 0.1 | |
Unrealized Losses | 0.1 | ||
Fair Value | 16.6 | 15.7 | |
Non-U.S. corporate securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 600.1 | 585.6 | |
Unrealized Gains | 2.4 | 1.8 | |
Unrealized Losses | 0.2 | 0.4 | |
Fair Value | 602.3 | 587 | |
Non-U.S. government securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 171.3 | 192.7 | |
Unrealized Gains | 1.4 | 1.1 | |
Unrealized Losses | 0.1 | ||
Fair Value | 172.7 | 193.7 | |
Other debt securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 102.6 | 69.6 | |
Unrealized Gains | 0.4 | 0.1 | |
Unrealized Losses | 0.1 | 0.1 | |
Fair Value | $ 102.9 | $ 69.6 | |
[1] | The December 31, 2015 consolidated balance sheet has been derived from audited financial statements. |
Investments in Marketable Deb32
Investments in Marketable Debt Securities - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Other-than-temporary impairments recognized on investments | $ 0 | $ 0 | |
Truck, Parts and Other | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross realized gains from sales of marketable debt securities | 800,000 | $ 800,000 | |
Gross realized loss from sales of marketable debt securities | $ 100,000 | $ 0 |
Marketable Debt Securities Cont
Marketable Debt Securities Continuous Unrealized Losses (Detail) - Truck, Parts and Other - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Investments, Unrealized Loss Position [Line Items] | ||
Less than 12 Months Fair Value | $ 337.1 | $ 579 |
Less than 12 Months Unrealized Losses | 0.5 | 1.1 |
12 Months or Greater Fair value | 0 | 0 |
12 Months or Greater Unrealized losses | $ 0 | $ 0 |
Contractual Maturities of Marke
Contractual Maturities of Marketable Debt Securities (Detail) - Truck, Parts and Other - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 | |
Amortized Cost Maturities: | |||
Within one year | $ 483.1 | ||
One to five years | 976.8 | ||
Six to ten years | 0.2 | ||
Amortized Cost | 1,460.1 | $ 1,445.3 | |
Fair Value Maturities: | |||
Within one year | 483.6 | ||
One to five years | 982.3 | ||
Six to ten years | 0.2 | ||
Fair Value | $ 1,466.1 | $ 1,448.1 | [1] |
[1] | The December 31, 2015 consolidated balance sheet has been derived from audited financial statements. |
Inventories Table (Detail)
Inventories Table (Detail) - Truck, Parts and Other - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 | |
Inventory [Line Items] | |||
Finished products | $ 513.9 | $ 443.6 | |
Work in process and raw materials | 491.1 | 528.9 | |
Inventory, Gross, Total | 1,005 | 972.5 | |
Less LIFO reserve | (175.9) | (176) | |
Inventories, net | $ 829.1 | $ 796.5 | [1] |
[1] | The December 31, 2015 consolidated balance sheet has been derived from audited financial statements. |
Inventories - Additional Inform
Inventories - Additional Information (Detail) | Mar. 31, 2016 |
Truck, Parts and Other | |
Inventory [Line Items] | |
Percentage of inventories valued using LIFO method of accounting | 49.00% |
Finance and Other Receivables37
Finance and Other Receivables (Detail) - Financial Services - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | $ 3,982.6 | $ 4,011.7 | ||||
Direct financing leases | 2,787.5 | 2,719.5 | ||||
Sales-type finance leases | 928.2 | 969.8 | ||||
Dealer wholesale financing | 1,912 | 1,950.1 | ||||
Operating lease receivables and other | 144 | 131.9 | ||||
Unearned interest: Finance leases | (359.6) | (364.6) | ||||
Finance and other receivables, net of deferred income | 9,394.7 | 9,418.4 | ||||
Less allowance for losses | (114.9) | (114.8) | $ (117.8) | $ (122) | ||
Finance and other receivables, net | 9,279.8 | 9,303.6 | [1] | |||
Loans And Leases | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Less allowance for losses | (98.4) | (99.2) | ||||
Dealer | Wholesale | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Less allowance for losses | (7.1) | (7.3) | (8.8) | (9) | ||
Other | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Less allowance for losses | [2] | $ (9.4) | $ (8.3) | $ (8.4) | $ (7.5) | |
[1] | The December 31, 2015 consolidated balance sheet has been derived from audited financial statements. | |||||
[2] | Operating leases and other trade receivables. |
Finance and Other Receivables -
Finance and Other Receivables - Additional Information (Detail) - Financial Services - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Months contractual terms extended | 3 months | 7 months | |
Loans accounted for as troubled debt restructurings | $ 50.1 | $ 52.3 | |
Repossessed inventory | 21.3 | $ 14.6 | |
Proceeds from the sales of repossessed assets | $ 12.4 | $ 17.3 | |
Loans And Leases | Minimum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Contractual terms of retails loans and finance leases | 36 months | ||
Loans And Leases | Maximum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Contractual terms of retails loans and finance leases | 60 months | ||
Financing Receivable | Maximum | Credit Concentration Risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of portfolio assets | 5.00% |
Allowance for Credit Losses (De
Allowance for Credit Losses (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Provision for losses | $ 3.4 | $ 2.7 | |
Financial Services | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Beginning Balance | 114.8 | 122 | |
Provision for losses | 3.4 | 2.7 | |
Charge-offs | (5.9) | (3) | |
Recoveries | 0.7 | 0.9 | |
Currency translation and other | 1.9 | (4.8) | |
Ending Balance | 114.9 | 117.8 | |
Financial Services | Dealer | Wholesale | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Beginning Balance | 7.3 | 9 | |
Provision for losses | (0.5) | 0.3 | |
Recoveries | 0.1 | ||
Currency translation and other | 0.2 | (0.5) | |
Ending Balance | 7.1 | 8.8 | |
Financial Services | Dealer | Retail | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Beginning Balance | 10.3 | 11.9 | |
Provision for losses | (0.5) | (0.2) | |
Currency translation and other | 0.1 | (0.2) | |
Ending Balance | 9.9 | 11.5 | |
Financial Services | Customer Retail | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Beginning Balance | 88.9 | 93.6 | |
Provision for losses | 3.2 | 1.9 | |
Charge-offs | (5.4) | (2.5) | |
Recoveries | 0.6 | 0.8 | |
Currency translation and other | 1.2 | (4.7) | |
Ending Balance | 88.5 | 89.1 | |
Financial Services | Other | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Beginning Balance | [1] | 8.3 | 7.5 |
Provision for losses | [1] | 1.2 | 0.7 |
Charge-offs | [1] | (0.5) | (0.5) |
Recoveries | [1] | 0.1 | |
Currency translation and other | [1] | 0.4 | 0.6 |
Ending Balance | [1] | $ 9.4 | $ 8.4 |
[1] | Operating leases and other trade receivables. |
Finance Receivable Evaluated an
Finance Receivable Evaluated and Determined Individually and Collectively (Detail) - Financial Services - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Recorded investment for impaired finance receivables evaluated individually | $ 68.5 | $ 69 |
Allowance for impaired finance receivables determined individually | 5 | 6.8 |
Recorded investment for finance receivables evaluated collectively | 9,182.2 | 9,217.5 |
Allowance for finance receivables determined collectively | 100.5 | 99.7 |
Dealer | Wholesale | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Recorded investment for impaired finance receivables evaluated individually | 4.6 | 5 |
Allowance for impaired finance receivables determined individually | 0.3 | 0.3 |
Recorded investment for finance receivables evaluated collectively | 1,907.4 | 1,945.1 |
Allowance for finance receivables determined collectively | 6.8 | 7 |
Dealer | Retail | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Recorded investment for finance receivables evaluated collectively | 1,493.2 | 1,561.3 |
Allowance for finance receivables determined collectively | 9.9 | 10.3 |
Customer Retail | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Recorded investment for impaired finance receivables evaluated individually | 63.9 | 64 |
Allowance for impaired finance receivables determined individually | 4.7 | 6.5 |
Recorded investment for finance receivables evaluated collectively | 5,781.6 | 5,711.1 |
Allowance for finance receivables determined collectively | $ 83.8 | $ 82.4 |
Recorded Investment for Finance
Recorded Investment for Finance Receivables that are on Non-accrual Status (Detail) - Financial Services - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Recorded investment of finance receivables that are on non-accrual status | $ 68.5 | $ 65.7 |
Dealer | Wholesale | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Recorded investment of finance receivables that are on non-accrual status | 4.6 | 5 |
Customer Retail | Fleet | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Recorded investment of finance receivables that are on non-accrual status | 53.7 | 50.7 |
Customer Retail | Owner/Operator | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Recorded investment of finance receivables that are on non-accrual status | $ 10.2 | $ 10 |
Summary of Impaired Loans (Deta
Summary of Impaired Loans (Detail) - Financial Services - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | |||
Financing Receivable, Impaired [Line Items] | ||||
Impaired loans with a specific reserve | $ 29.2 | $ 29.1 | ||
Associated allowance | (2.8) | (4.3) | ||
Net carrying amount of impaired loans with specific reserve | 26.4 | 24.8 | ||
Impaired loans with no specific reserve | 6 | 6.8 | ||
Net carrying amount of impaired loans | 32.4 | 31.6 | ||
Average recorded investment | 34 | [1] | 33.5 | [2] |
Dealer | Wholesale | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired loans with a specific reserve | 4.6 | 5 | ||
Associated allowance | (0.3) | (0.3) | ||
Net carrying amount of impaired loans with specific reserve | 4.3 | 4.7 | ||
Net carrying amount of impaired loans | 4.3 | 4.7 | ||
Average recorded investment | 4.4 | [1] | 7.7 | [2] |
Customer Retail | Fleet | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired loans with a specific reserve | 21.9 | 21.7 | ||
Associated allowance | (2) | (3.5) | ||
Net carrying amount of impaired loans with specific reserve | 19.9 | 18.2 | ||
Impaired loans with no specific reserve | 5.8 | 6.5 | ||
Net carrying amount of impaired loans | 25.7 | 24.7 | ||
Average recorded investment | 27.2 | [1] | 23.2 | [2] |
Customer Retail | Owner/Operator | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired loans with a specific reserve | 2.7 | 2.4 | ||
Associated allowance | (0.5) | (0.5) | ||
Net carrying amount of impaired loans with specific reserve | 2.2 | 1.9 | ||
Impaired loans with no specific reserve | 0.2 | 0.3 | ||
Net carrying amount of impaired loans | 2.4 | 2.2 | ||
Average recorded investment | $ 2.4 | [1] | $ 2.6 | [2] |
[1] | Represents the average during the 12 months ended March 31, 2016. | |||
[2] | Represents the average during the 12 months ended March 31, 2015. |
Summary of Impaired Loans (Cash
Summary of Impaired Loans (Cash Basis Method) (Detail) - Financial Services - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Interest income recognized: | ||
Interest income recognized on a cash basis | $ 0.4 | $ 0.4 |
Customer Retail | Fleet | ||
Interest income recognized: | ||
Interest income recognized on a cash basis | 0.3 | 0.3 |
Customer Retail | Owner/Operator | ||
Interest income recognized: | ||
Interest income recognized on a cash basis | $ 0.1 | $ 0.1 |
Finance Receivables by Credit Q
Finance Receivables by Credit Quality Indicator and Portfolio Class (Detail) - Financial Services - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | $ 9,250.7 | $ 9,286.5 |
Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 9,133.4 | 9,160.9 |
Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 48.8 | 56.6 |
At-risk | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 68.5 | 69 |
Dealer | Wholesale | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 1,912 | 1,950.1 |
Dealer | Wholesale | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 1,892 | 1,922.4 |
Dealer | Wholesale | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 15.4 | 22.7 |
Dealer | Wholesale | At-risk | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 4.6 | 5 |
Dealer | Retail | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 1,493.2 | 1,561.3 |
Dealer | Retail | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 1,493.2 | 1,561.3 |
Customer Retail | Fleet | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 4,853.4 | 4,761.4 |
Customer Retail | Fleet | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 4,774.7 | 4,680.6 |
Customer Retail | Fleet | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 25.1 | 27 |
Customer Retail | Fleet | At-risk | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 53.6 | 53.8 |
Customer Retail | Owner/Operator | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 992.1 | 1,013.7 |
Customer Retail | Owner/Operator | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 973.5 | 996.6 |
Customer Retail | Owner/Operator | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 8.3 | 6.9 |
Customer Retail | Owner/Operator | At-risk | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | $ 10.3 | $ 10.2 |
Financing Receivables by Aging
Financing Receivables by Aging Category (Detail) - Financial Services - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, current and up to 30 days past due | $ 9,211.3 | $ 9,247.4 |
Financing Receivables | 9,250.7 | 9,286.5 |
31 - 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 17 | 13.7 |
Greater than 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 22.4 | 25.4 |
Dealer | Wholesale | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, current and up to 30 days past due | 1,911.3 | 1,949.8 |
Financing Receivables | 1,912 | 1,950.1 |
Dealer | Wholesale | 31 - 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 0.4 | |
Dealer | Wholesale | Greater than 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 0.3 | 0.3 |
Dealer | Retail | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, current and up to 30 days past due | 1,493.2 | 1,561.3 |
Financing Receivables | 1,493.2 | 1,561.3 |
Customer Retail | Fleet | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, current and up to 30 days past due | 4,827.1 | 4,733.6 |
Financing Receivables | 4,853.4 | 4,761.4 |
Customer Retail | Fleet | 31 - 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 10.8 | 8.3 |
Customer Retail | Fleet | Greater than 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 15.5 | 19.5 |
Customer Retail | Owner/Operator | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, current and up to 30 days past due | 979.7 | 1,002.7 |
Financing Receivables | 992.1 | 1,013.7 |
Customer Retail | Owner/Operator | 31 - 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 5.8 | 5.4 |
Customer Retail | Owner/Operator | Greater than 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | $ 6.6 | $ 5.6 |
Pre- and Post-Modification Reco
Pre- and Post-Modification Recorded Investment Balances for Finance Receivables Modified by Portfolio Class (Detail) - Financial Services - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Financing Receivable, Modifications [Line Items] | ||
Pre-Modification Recorded Investment | $ 9.5 | $ 4.8 |
Post-Modification Recorded Investment | 9.4 | 4.7 |
Customer Retail | Fleet | ||
Financing Receivable, Modifications [Line Items] | ||
Pre-Modification Recorded Investment | 7.6 | 3.9 |
Post-Modification Recorded Investment | 7.5 | 3.8 |
Customer Retail | Owner/Operator | ||
Financing Receivable, Modifications [Line Items] | ||
Pre-Modification Recorded Investment | 1.9 | 0.9 |
Post-Modification Recorded Investment | $ 1.9 | $ 0.9 |
TDRs Modified During Previous T
TDRs Modified During Previous Twelve Months that Subsequently Defaulted (Detail) - Financial Services - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Financing Receivable, Modifications [Line Items] | ||
Recorded Investment, subsequently defaulted | $ 0.2 | $ 2.4 |
Customer Retail | Fleet | ||
Financing Receivable, Modifications [Line Items] | ||
Recorded Investment, subsequently defaulted | 0 | 2 |
Customer Retail | Owner/Operator | ||
Financing Receivable, Modifications [Line Items] | ||
Recorded Investment, subsequently defaulted | $ 0.2 | $ 0.4 |
Product Support Liabilities - A
Product Support Liabilities - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016 | |
Product Warranty Liability [Line Items] | |
Standard product warranty, description | The Company generally offers one year warranties covering most of its vehicles and related aftermarket parts. For vehicles equipped with engines manufactured by PACCAR, the Company generally offers two year warranties on the engine. |
Standard product warranty, term | 1 year |
Extended product warranty, description | Optional extended warranty and R&M contracts can be purchased for periods which generally range up to five years. |
Maximum | |
Product Warranty Liability [Line Items] | |
Extended product warranty, term | 5 years |
Engines manufactured by PACCAR | |
Product Warranty Liability [Line Items] | |
Standard product warranty, term | 2 years |
Changes in Product Support Liab
Changes in Product Support Liabilities (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Warranty Reserves | ||
Beginning balance | $ 346.2 | $ 310.8 |
Cost accruals | 52.3 | 74.7 |
Payments | (61.5) | (55.2) |
Change in estimates for pre-existing warranties | 4.6 | (2.1) |
Currency translation | 2.1 | (10.8) |
Ending balance | 343.7 | 317.4 |
Deferred Revenues on Extended Warranties and R&M Contracts | ||
Beginning balance | 524.8 | 462 |
Deferred revenues | 94.3 | 90.5 |
Revenues recognized | (65.9) | (61.4) |
Currency translation | 5.8 | (22.3) |
Ending balance | $ 559 | $ 468.8 |
Components of Comprehensive (Lo
Components of Comprehensive (Loss) Income, Net of Related Tax (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (594.6) | $ 378.4 |
Other comprehensive (loss) income (OCI): | ||
Unrealized losses on derivative contracts, before tax | (6.6) | (0.2) |
Unrealized losses on derivative contracts, tax | 2.1 | 0.4 |
Net current period OCI, unrealized (losses) gain on derivative contracts | (4.5) | 0.2 |
Unrealized gains on marketable debt securities, before tax | 3.2 | 0.5 |
Unrealized gains on marketable debt securities, tax | (1) | (0.2) |
Net current period OCI, unrealized gains on marketable debt securities | 2.2 | 0.3 |
Pension plans, before tax | 7 | 21.7 |
Pension plans, tax | (2.4) | (6.8) |
Net current period OCI, pension plans | 4.6 | 14.9 |
Foreign currency translation gains (losses) | 125.5 | (352.9) |
Net other comprehensive income (loss) | 127.8 | (337.5) |
Comprehensive (loss) income | $ (466.8) | $ 40.9 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | [1] | $ 6,940.4 | |
Reclassified out of AOCI | (41.2) | $ 14.9 | |
Net other comprehensive income (loss) | 127.8 | (337.5) | |
Ending balance | 6,343.2 | ||
Derivative Contracts | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (6.4) | (13.5) | |
Recorded into AOCI | (41.7) | 21.3 | |
Reclassified out of AOCI | 37.2 | (21.1) | |
Net other comprehensive income (loss) | (4.5) | 0.2 | |
Ending balance | (10.9) | (13.3) | |
Marketable Debt Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 2.1 | 5.3 | |
Recorded into AOCI | 2.7 | 0.9 | |
Reclassified out of AOCI | (0.5) | (0.6) | |
Net other comprehensive income (loss) | 2.2 | 0.3 | |
Ending balance | 4.3 | 5.6 | |
Pension Plan | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (390.4) | (433.1) | |
Recorded into AOCI | 0.1 | 8.1 | |
Reclassified out of AOCI | 4.5 | 6.8 | |
Net other comprehensive income (loss) | 4.6 | 14.9 | |
Ending balance | (385.8) | (418.2) | |
Foreign Currency Translation | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (622.3) | (138.5) | |
Recorded into AOCI | 125.5 | (352.9) | |
Net other comprehensive income (loss) | 125.5 | (352.9) | |
Ending balance | (496.8) | (491.4) | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME: | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (1,017) | (579.8) | |
Recorded into AOCI | 86.6 | (322.6) | |
Reclassified out of AOCI | 41.2 | (14.9) | |
Net other comprehensive income (loss) | 127.8 | (337.5) | |
Ending balance | $ (889.2) | $ (917.3) | |
[1] | The December 31, 2015 consolidated balance sheet has been derived from audited financial statements. |
Reclassifications Out of Accumu
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Income before income taxes | $ 429.6 | $ (561.7) |
Tax (benefit) expense | 165 | 183.3 |
After-tax expense (income) | 594.6 | (378.4) |
Total reclassification out of AOCI | 41.2 | (14.9) |
Investment income | (5.7) | (5.1) |
Foreign-exchange contracts | Reclassification out of Accumulated Other Comprehensive Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Income before income taxes | 3.1 | (1.3) |
Interest-Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Income before income taxes | (57.9) | 33.2 |
Pension Plan | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total reclassification out of AOCI | (4.5) | (6.8) |
Pension Plan | Reclassification out of Accumulated Other Comprehensive Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Income before income taxes | 6.8 | 10.4 |
Tax (benefit) expense | (2.3) | (3.6) |
After-tax expense (income) | 4.5 | 6.8 |
Marketable Debt Securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total reclassification out of AOCI | 0.5 | 0.6 |
Marketable Debt Securities | Reclassification out of Accumulated Other Comprehensive Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Tax (benefit) expense | 0.2 | 0.2 |
After-tax expense (income) | (0.5) | (0.6) |
Investment income | (0.7) | (0.8) |
Derivative Contracts | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total reclassification out of AOCI | (37.2) | 21.1 |
Derivative Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Income before income taxes | 54.8 | (31.9) |
Tax (benefit) expense | (17.6) | 10.8 |
After-tax expense (income) | 37.2 | (21.1) |
Truck, Parts and Other | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net sales and revenues | 4,010.6 | 4,548 |
Cost of sales and revenues | 3,413.6 | 3,910.2 |
Interest and other expense, net | 0.1 | 4.5 |
Selling, general and administrative | 110.3 | 109.5 |
Income before income taxes | 515.6 | (467.6) |
Truck, Parts and Other | Prior service costs | Reclassification out of Accumulated Other Comprehensive Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Cost of sales and revenues | 0.2 | 0.2 |
Selling, general and administrative | 0.1 | 0.1 |
Income before income taxes | 0.3 | 0.3 |
Truck, Parts and Other | Actuarial loss | Reclassification out of Accumulated Other Comprehensive Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Cost of sales and revenues | 3.4 | 5.4 |
Selling, general and administrative | 2.9 | 4.3 |
Income before income taxes | 6.3 | 9.7 |
Truck, Parts and Other | Derivative Contracts | Foreign-exchange contracts | Reclassification out of Accumulated Other Comprehensive Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net sales and revenues | 0.5 | |
Cost of sales and revenues | (5.3) | 3.2 |
Interest and other expense, net | 1.7 | (1.9) |
Financial Services | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Selling, general and administrative | 24.5 | 23.5 |
Interest and other borrowing expenses | 30.3 | 29.1 |
Income before income taxes | (80.3) | (89) |
Financial Services | Actuarial loss | Reclassification out of Accumulated Other Comprehensive Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Selling, general and administrative | 0.2 | 0.4 |
Financial Services | Derivative Contracts | Interest-Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Interest and other borrowing expenses | $ 57.9 | $ (33.2) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | ||
Stock-based compensation expense | $ 7.2 | $ 7.8 |
Stock-based compensation expense realized tax benefits from the excess of deductible amounts over expense recognized | $ 0.1 | $ 1.2 |
Additional common shares issued under deferred and stock compensation arrangements | 213,814 | |
TREASURY STOCK, AT COST: | ||
Equity, Class of Treasury Stock [Line Items] | ||
Treasury shares purchased | 1,100,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) € in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2016USD ($) | Mar. 31, 2016EUR (€) | Mar. 31, 2015USD ($) | |
Income Taxes [Line Items] | |||
European Commission charge | $ 942.6 | $ 0 | |
Effective tax rate | (38.40%) | (38.40%) | 32.60% |
Truck, Parts and Other | |||
Income Taxes [Line Items] | |||
European Commission charge | $ 942.6 | € 850 | $ 0 |
Segment and Related Information
Segment and Related Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016Segment | |
Segment Reporting [Abstract] | |
Reportable segments | 3 |
Segment Reporting Information b
Segment Reporting Information by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Net sales and revenues | $ 4,300 | $ 4,832.7 |
Investment income | 5.7 | 5.1 |
Income (loss) before income taxes | (429.6) | 561.7 |
Depreciation and amortization | 242.5 | 221.1 |
Truck, Parts and Other | ||
Segment Reporting Information [Line Items] | ||
Net sales and revenues | 4,010.6 | 4,548 |
Income (loss) before income taxes | (515.6) | 467.6 |
Depreciation and amortization | 115.1 | 102.1 |
Truck, Parts and Other | Trucks | ||
Segment Reporting Information [Line Items] | ||
Net sales and revenues | 3,270.5 | 3,769.1 |
Income (loss) before income taxes | 304.1 | 339.1 |
Depreciation and amortization | 109.6 | 97 |
Truck, Parts and Other | Trucks | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales and revenues | 3,472.4 | 3,980.8 |
Truck, Parts and Other | Trucks | Intersegment | ||
Segment Reporting Information [Line Items] | ||
Net sales and revenues | (201.9) | (211.7) |
Truck, Parts and Other | Parts | ||
Segment Reporting Information [Line Items] | ||
Net sales and revenues | 719.5 | 752.7 |
Income (loss) before income taxes | 134.6 | 138.9 |
Depreciation and amortization | 1.6 | 1.5 |
Truck, Parts and Other | Parts | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales and revenues | 729.3 | 764.4 |
Truck, Parts and Other | Parts | Intersegment | ||
Segment Reporting Information [Line Items] | ||
Net sales and revenues | (9.8) | (11.7) |
Truck, Parts and Other | Other | ||
Segment Reporting Information [Line Items] | ||
Net sales and revenues | 20.6 | 26.2 |
Income (loss) before income taxes | (954.3) | (10.4) |
Depreciation and amortization | 3.9 | 3.6 |
Financial Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 289.4 | 284.7 |
Income (loss) before income taxes | 80.3 | 89 |
Depreciation and amortization | $ 127.4 | $ 119 |
Segment Reporting Information57
Segment Reporting Information by Segment (Parenthetical) (Detail) € in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2016USD ($) | Mar. 31, 2016EUR (€) | Mar. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | |||
European Commission charge | $ 942.6 | $ 0 | |
Truck, Parts and Other | |||
Segment Reporting Information [Line Items] | |||
European Commission charge | $ 942.6 | € 850 | $ 0 |
Derivative Financial Instrume58
Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative assets | $ 94.3 | $ 137.3 | |
Designated under hedge accounting | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative assets | $ 93.8 | 136.1 | |
Cash Flow Hedging | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Maximum length of future cash flow hedges | 5 years 2 months 12 days | ||
Recognized gain (loss) on the ineffective portion | $ 0 | $ 0 | |
Accumulated net loss on derivative contracts included in accumulated other comprehensive loss expected to be recognized in the Consolidated Statements of Comprehensive Income in the following 12 months, net of tax | 6.2 | ||
Gains or losses reclassified out of AOCI into net income based on the probability that the original forecasted transaction would not occur | 0.6 | 0 | |
Interest-Rate Contracts | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional amount of outstanding contracts | 3,481.6 | ||
Notional maturities for interest-rate contracts 2016 | 950.6 | ||
Notional maturities for interest-rate contracts 2017 | 762.3 | ||
Notional maturities for interest-rate contracts 2018 | 1,071.6 | ||
Notional maturities for interest-rate contracts 2019 | 362.9 | ||
Notional maturities for interest-rate contracts 2020 | 143.5 | ||
Notional maturities for interest-rate contracts thereafter | 190.7 | ||
(Income) Expense recognized in earnings | 0 | 0 | |
Interest-Rate Contracts | Financial Services | Designated under hedge accounting | Other Assets | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative assets | 90.3 | $ 132.2 | |
Foreign-exchange contracts | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Derivative notional amount outstanding | $ 318.2 | ||
Foreign-exchange contracts maturity period | Within one year | ||
(Income) Expense recognized in earnings | $ 1.2 | $ (14.3) |
Balance Sheet Classifications,
Balance Sheet Classifications, Fair Value, Gross and Pro Forma Net Amounts of Derivative Financial Instruments (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Derivative assets | $ 94.3 | $ 137.3 |
Pro forma net amount | 85.6 | 133.4 |
LIABILITIES | ||
Derivative liabilities | 62.7 | 48.2 |
Pro forma net amount | 54 | 44.3 |
Interest-Rate Contracts | Financial Services | ||
ASSETS | ||
Less amounts not offset in financial instruments | (7.8) | (3.3) |
LIABILITIES | ||
Less amounts not offset in financial instruments | (7.8) | (3.3) |
Foreign-exchange contracts | Financial Services | ||
ASSETS | ||
Less amounts not offset in financial instruments | (0.1) | (0.2) |
LIABILITIES | ||
Less amounts not offset in financial instruments | (0.1) | (0.2) |
Foreign-exchange contracts | Truck, Parts and Other | ||
ASSETS | ||
Less amounts not offset in financial instruments | (0.8) | (0.4) |
LIABILITIES | ||
Less amounts not offset in financial instruments | (0.8) | (0.4) |
Designated under hedge accounting | ||
ASSETS | ||
Derivative assets | 93.8 | 136.1 |
LIABILITIES | ||
Derivative liabilities | 58.5 | 46.9 |
Designated under hedge accounting | Interest-Rate Contracts | Financial Services | Deferred Taxes And Other Liabilities | ||
LIABILITIES | ||
Derivative liabilities | 54.8 | 46.7 |
Designated under hedge accounting | Interest-Rate Contracts | Financial Services | Other Assets | ||
ASSETS | ||
Derivative assets | 90.3 | 132.2 |
Designated under hedge accounting | Foreign-exchange contracts | Truck, Parts and Other | Accounts payable, accrued expenses and other | ||
LIABILITIES | ||
Derivative liabilities | 3.7 | 0.2 |
Designated under hedge accounting | Foreign-exchange contracts | Truck, Parts and Other | Other current assets | ||
ASSETS | ||
Derivative assets | 3.5 | 3.9 |
Economic hedge | ||
ASSETS | ||
Derivative assets | 0.5 | 1.2 |
LIABILITIES | ||
Derivative liabilities | 4.2 | 1.3 |
Economic hedge | Foreign-exchange contracts | Financial Services | Deferred Taxes And Other Liabilities | ||
LIABILITIES | ||
Derivative liabilities | 2.9 | 1 |
Economic hedge | Foreign-exchange contracts | Financial Services | Other Assets | ||
ASSETS | ||
Derivative assets | 0.2 | 0.3 |
Economic hedge | Foreign-exchange contracts | Truck, Parts and Other | Accounts payable, accrued expenses and other | ||
LIABILITIES | ||
Derivative liabilities | 1.3 | 0.3 |
Economic hedge | Foreign-exchange contracts | Truck, Parts and Other | Other current assets | ||
ASSETS | ||
Derivative assets | $ 0.3 | $ 0.9 |
(Income) or Expense Recognized
(Income) or Expense Recognized in Earnings Related to Fair Value Hedges (Detail) - Financial Services - Interest and other borrowing expenses - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Derivative [Line Items] | ||
Interest-rate swaps | $ (2) | $ (1.4) |
Term notes | $ 1.6 | $ 1.1 |
Pre-Tax Effects of Derivative I
Pre-Tax Effects of Derivative Instruments Recognized in OCI (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Derivative [Line Items] | ||
Income before income taxes | $ (429.6) | $ 561.7 |
Interest-Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||
Derivative [Line Items] | ||
Income before income taxes | 57.9 | (33.2) |
Foreign-exchange contracts | Reclassification out of Accumulated Other Comprehensive Income | ||
Derivative [Line Items] | ||
Income before income taxes | (3.1) | 1.3 |
Derivative Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||
Derivative [Line Items] | ||
Income before income taxes | (54.8) | 31.9 |
Derivative Contracts | Interest-Rate Contracts | ||
Derivative [Line Items] | ||
Gain (loss) recognized in OCI | (61.7) | 31.7 |
Derivative Contracts | Foreign-exchange contracts | ||
Derivative [Line Items] | ||
Gain (loss) recognized in OCI | 0.3 | |
Truck, Parts and Other | ||
Derivative [Line Items] | ||
Net sales and revenues | 4,010.6 | 4,548 |
Cost of sales and revenues | 3,413.6 | 3,910.2 |
Interest and other borrowing expenses | 0.1 | 4.5 |
Income before income taxes | (515.6) | 467.6 |
Truck, Parts and Other | Derivative Contracts | Foreign-exchange contracts | ||
Derivative [Line Items] | ||
Gain (loss) recognized in OCI | 0.3 | |
Truck, Parts and Other | Derivative Contracts | Foreign-exchange contracts | Reclassification out of Accumulated Other Comprehensive Income | ||
Derivative [Line Items] | ||
Net sales and revenues | 0.5 | |
Cost of sales and revenues | (5.3) | 3.2 |
Interest and other borrowing expenses | 1.7 | (1.9) |
Financial Services | ||
Derivative [Line Items] | ||
Interest and other expense, net | 30.3 | 29.1 |
Income before income taxes | 80.3 | 89 |
Financial Services | Derivative Contracts | Interest-Rate Contracts | ||
Derivative [Line Items] | ||
Gain (loss) recognized in OCI | (61.7) | 31.7 |
Financial Services | Derivative Contracts | Interest-Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||
Derivative [Line Items] | ||
Interest and other expense, net | $ 57.9 | $ (33.2) |
(Income) Expense Recognized in
(Income) Expense Recognized in Earnings Related to Economic Hedges (Detail) - Foreign-exchange contracts - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Derivative [Line Items] | ||
(Income) Expense recognized in earnings | $ 1.2 | $ (14.3) |
Truck, Parts and Other | Cost of sales and revenues | ||
Derivative [Line Items] | ||
(Income) Expense recognized in earnings | 1 | (1.7) |
Truck, Parts and Other | Interest and other expenses, net | ||
Derivative [Line Items] | ||
(Income) Expense recognized in earnings | (0.1) | 2.1 |
Financial Services | Interest and other borrowing expenses | ||
Derivative [Line Items] | ||
(Income) Expense recognized in earnings | 2.4 | (14.5) |
Financial Services | Selling, general and administrative | ||
Derivative [Line Items] | ||
(Income) Expense recognized in earnings | $ (2.1) | $ (0.2) |
Financial Assets and Liabilitie
Financial Assets and Liabilities Subject to Recurring Fair Value Measurements (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 94.3 | $ 137.3 |
Derivative liabilities | 62.7 | 48.2 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 1,466.1 | 1,448.1 |
Derivative assets | 94.3 | 137.3 |
Derivative liabilities | 62.7 | 48.2 |
Fair Value, Measurements, Recurring | Cross currency swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 87.4 | 130.5 |
Derivative liabilities | 39.2 | 37.2 |
Fair Value, Measurements, Recurring | Interest-rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 2.9 | 1.7 |
Derivative liabilities | 15.6 | 9.5 |
Fair Value, Measurements, Recurring | Foreign-exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 4 | 5.1 |
Derivative liabilities | 7.9 | 1.5 |
Fair Value, Measurements, Recurring | U.S. tax-exempt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 491.6 | 505.4 |
Fair Value, Measurements, Recurring | U.S. corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 80 | 76.7 |
Fair Value, Measurements, Recurring | U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 16.6 | 15.7 |
Fair Value, Measurements, Recurring | Non-U.S. corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 602.3 | 587 |
Fair Value, Measurements, Recurring | Non-U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 172.7 | 193.7 |
Fair Value, Measurements, Recurring | Other debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 102.9 | 69.6 |
Level 1 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 15.8 | 15.1 |
Level 1 | Fair Value, Measurements, Recurring | U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 15.8 | 15.1 |
Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 1,450.3 | 1,433 |
Derivative assets | 94.3 | 137.3 |
Derivative liabilities | 62.7 | 48.2 |
Level 2 | Fair Value, Measurements, Recurring | Cross currency swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 87.4 | 130.5 |
Derivative liabilities | 39.2 | 37.2 |
Level 2 | Fair Value, Measurements, Recurring | Interest-rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 2.9 | 1.7 |
Derivative liabilities | 15.6 | 9.5 |
Level 2 | Fair Value, Measurements, Recurring | Foreign-exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 4 | 5.1 |
Derivative liabilities | 7.9 | 1.5 |
Level 2 | Fair Value, Measurements, Recurring | U.S. tax-exempt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 491.6 | 505.4 |
Level 2 | Fair Value, Measurements, Recurring | U.S. corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 80 | 76.7 |
Level 2 | Fair Value, Measurements, Recurring | U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 0.8 | 0.6 |
Level 2 | Fair Value, Measurements, Recurring | Non-U.S. corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 602.3 | 587 |
Level 2 | Fair Value, Measurements, Recurring | Non-U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 172.7 | 193.7 |
Level 2 | Fair Value, Measurements, Recurring | Other debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | $ 102.9 | $ 69.6 |
Carrying Amount and Fair Value
Carrying Amount and Fair Value of Financial Services Fixed-Rate Loans and Fixed-Rate Debt (Detail) - Financial Services - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Assets, carrying amount | ||
Fixed-rate loans, carrying amount | $ 3,633.3 | $ 3,660.6 |
Liabilities, carrying amount | ||
Fixed-rate debt, carrying amount | 4,413 | 4,167.9 |
Assets, Fair Value | ||
Fixed-rate loans, Fair Value | 3,727.8 | 3,729 |
Liabilities, Fair Value | ||
Fixed-rate debt, Fair Value | $ 4,459.5 | $ 4,192.2 |
Components of Pension Expense (
Components of Pension Expense (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||
Service cost | $ 21.9 | $ 21.6 |
Interest on projected benefit obligation | 23.6 | 22.9 |
Expected return on assets | (35.6) | (34.8) |
Amortization of prior service costs | 0.3 | 0.3 |
Recognized actuarial loss | 6.5 | 10.1 |
Net pension expense | $ 16.7 | $ 20.1 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Pension and Other Postretirement Benefit Contributions [Abstract] | ||
Contribution to pension plans | $ 5.1 | $ 2.7 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) € in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2016USD ($) | Mar. 31, 2016EUR (€) | Mar. 31, 2015USD ($) | |
Commitments and Contingencies Disclosure [Line Items] | |||
European Commission charge | $ 942.6 | $ 0 | |
Truck, Parts and Other | |||
Commitments and Contingencies Disclosure [Line Items] | |||
European Commission charge | $ 942.6 | € 850 | $ 0 |