Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 31, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
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 | 351,376,481 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) € in Millions, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2016EUR (€)shares | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($)$ / sharesshares | |
Investment income | $ 8.7 | $ 6.4 | $ 16.8 | $ 12.1 | |
Provision for losses on receivables | 12.7 | 9.4 | |||
European Commission charge | (109.6) | 0 | 833 | ||
Income before income taxes | 539 | 646.2 | 987.2 | 216.6 | |
Income taxes | 166 | 164.9 | 303.9 | 329.9 | |
Net Income (Loss) | $ 373 | $ 481.3 | $ 683.3 | $ (113.3) | |
Net Income (Loss) Per Share | |||||
Basic | $ / shares | $ 1.06 | $ 1.37 | $ 1.94 | $ (0.32) | |
Diluted | $ / shares | $ 1.06 | $ 1.37 | $ 1.94 | $ (0.32) | |
Weighted Average Number of Common Shares Outstanding | |||||
Basic | shares | 351.8 | 350.9 | 350.9 | 351.7 | 351.1 |
Diluted | shares | 352.7 | 351.6 | 351.6 | 352.7 | 351.1 |
Dividends declared per share | $ / shares | $ 0.25 | $ 0.24 | $ 0.49 | $ 0.48 | |
Comprehensive Income (Loss) | $ 505.8 | $ 443.4 | $ 886.2 | $ (23.4) | |
Truck, Parts and Other | |||||
Net sales and revenues | 4,397.9 | 4,115.8 | 8,333.6 | 8,126.4 | |
Cost of sales and revenues | 3,755.2 | 3,489.4 | 7,137.4 | 6,903 | |
Research and development | 66.1 | 60.8 | 127.1 | 120.4 | |
Selling, general and administrative | 107.8 | 110.2 | 219.1 | 220.5 | |
European Commission charge | 0 | (109.6) | € (97.3) | 0 | 833 |
Interest and other expense,(income), net | 1.5 | 2.5 | (0.1) | 2.6 | |
Costs and Expenses, Total | 3,930.6 | 3,553.3 | 7,483.5 | 8,079.5 | |
Income before income taxes | 467.3 | 562.5 | 850.1 | 46.9 | |
Financial Services | |||||
Interest and fees | 104.2 | 107.1 | 206.4 | 214.5 | |
Operating lease, rental and other revenues | 202.1 | 190.3 | 402.1 | 372.3 | |
Revenues | 306.3 | 297.4 | 608.5 | 586.8 | |
Interest and other borrowing expenses | 37.4 | 32.6 | 71.5 | 62.9 | |
Depreciation and other expenses | 172.8 | 156.4 | 352.5 | 307.3 | |
Selling, general and administrative | 26.3 | 25.1 | 51.5 | 49.6 | |
Provision for losses on receivables | 6.8 | 6 | 12.7 | 9.4 | |
Costs and Expenses, Total | 243.3 | 220.1 | 488.2 | 429.2 | |
Income before income taxes | $ 63 | $ 77.3 | $ 120.3 | $ 157.6 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 | |
ASSETS | |||
Cash and cash equivalents | $ 1,879.8 | $ 1,915.7 | |
Total Assets | 22,053.3 | 20,638.9 | [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 351.3 million and 350.7 million shares | 351.3 | 350.7 | [1] |
Additional paid-in capital | 98.5 | 70.1 | [1] |
Retained earnings | 7,975.9 | 7,484.9 | [1] |
Accumulated other comprehensive loss | (925.2) | (1,128.1) | [1] |
Total Stockholders' Equity | 7,500.5 | 6,777.6 | [1] |
Liabilities and Equity, Total | 22,053.3 | 20,638.9 | [1] |
Truck, Parts and Other | |||
ASSETS | |||
Cash and cash equivalents | 1,760.1 | 1,781.7 | [1] |
Trade and other receivables, net | 1,281 | 862.2 | [1] |
Marketable debt securities | 1,244.6 | 1,140.9 | [1] |
Inventories, net | 885.3 | 727.8 | [1] |
Other current assets | 269.9 | 225.6 | [1] |
Total Truck, Parts and Other Current Assets | 5,440.9 | 4,738.2 | [1] |
Equipment on operating leases, net | 1,201.6 | 1,013.9 | [1] |
Property, plant and equipment, net | 2,325.6 | 2,260 | [1] |
Other noncurrent assets, net | 397.1 | 432 | [1] |
Total Assets | 9,365.2 | 8,444.1 | [1] |
Liabilities | |||
Accounts payable, accrued expenses and other | 2,554.9 | 2,034.1 | [1] |
Dividend payable | 0 | 210.4 | [1] |
Total Truck, Parts and Other Current Liabilities | 2,554.9 | 2,244.5 | [1] |
Residual value guarantees and deferred revenues | 1,272.5 | 1,072.6 | [1] |
Other liabilities | 770.7 | 739.1 | [1] |
Total Liabilities | 4,598.1 | 4,056.2 | [1] |
Financial Services | |||
ASSETS | |||
Cash and cash equivalents | 119.7 | 134 | [1] |
Finance and other receivables, net | 9,228.9 | 8,837.4 | [1] |
Equipment on operating leases, net | 2,788.4 | 2,623.9 | [1] |
Other assets | 551.1 | 599.5 | [1] |
Total Assets | 12,688.1 | 12,194.8 | [1] |
Liabilities | |||
Accounts payable, accrued expenses and other | 461.3 | 395 | [1] |
Commercial paper and bank loans | 2,888.9 | 2,447.5 | [1] |
Term notes | 5,655.2 | 6,027.7 | [1] |
Deferred taxes and other liabilities | 949.3 | 934.9 | [1] |
Total Liabilities | $ 9,954.7 | $ 9,805.1 | [1] |
[1] | The December 31, 2016 consolidated balance sheet has been derived from audited financial statements. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 | [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 | 351,300,000 | 350,700,000 | |
[1] | The December 31, 2016 consolidated balance sheet has been derived from audited financial statements. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ 683.3 | $ (113.3) |
Adjustments to reconcile net income (loss) to cash provided by operations: | ||
Depreciation and amortization, Property, plant and equipment | 151.5 | 155.5 |
Depreciation and amortization, Equipment on operating leases and other | 376.7 | 339.9 |
Provision for losses on financial services receivables | 12.7 | 9.4 |
Other, net | (8.8) | (5.9) |
Pension contributions | (10.4) | (59.3) |
European Commission charge | 0 | 833 |
Change in operating assets and liabilities: | ||
Trade and other receivables | (425.2) | (215.7) |
Wholesale receivables on new trucks | (176) | 226 |
Sales-type finance leases and dealer direct loans on new trucks | 105.8 | 85.8 |
Inventories | (126.8) | (12.3) |
Accounts payable and accrued expenses | 422.2 | 225.3 |
Income taxes, warranty and other | 180.2 | 181 |
Net Cash Provided by Operating Activities | 1,185.2 | 1,649.4 |
INVESTING ACTIVITIES: | ||
Originations of retail loans and direct financing leases | (1,347.5) | (1,366.6) |
Collections on retail loans and direct financing leases | 1,324 | 1,238.8 |
Net decrease in wholesale receivables on used equipment | 1.6 | 14.2 |
Purchases of marketable debt securities | (435.3) | (543.8) |
Proceeds from sales and maturities of marketable debt securities | 359 | 572.3 |
Payments for property, plant and equipment | (188.3) | (152) |
Acquisitions of equipment for operating leases | (728) | (767.2) |
Proceeds from asset disposals | 244.2 | 218.2 |
Net Cash Used in Investing Activities | (770.3) | (786.1) |
FINANCING ACTIVITIES: | ||
Payments of cash dividends | (382.5) | (661) |
Purchases of treasury stock | 0 | (56.3) |
Proceeds from stock compensation transactions | 18.8 | 7.4 |
Net increase (decrease) in commercial paper and short-term bank loans | 336.9 | (389.2) |
Proceeds from term debt | 959.8 | 1,366.5 |
Payments on term debt | (1,440.8) | (1,109.2) |
Net Cash Used in Financing Activities | (507.8) | (841.8) |
Effect of exchange rate changes on cash | 57 | 27 |
Net (Decrease) Increase in Cash and Cash Equivalents | (35.9) | 48.5 |
Cash and cash equivalents at beginning of period | 1,915.7 | 2,016.4 |
Cash and cash equivalents at end of period | $ 1,879.8 | $ 2,064.9 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
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 S-X. non-recurring Form 10-K Earnings (Loss) per Share Three Months Ended Six Months Ended 2017 2016 2017 2016 Additional shares 933,300 704,800 1,013,700 Antidilutive options 616,800 1,934,300 649,300 2,597,600 New Accounting Pronouncements: 2017-07 Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost non-service non-service In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) right-of-use In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers 2014-09. The Company’s evaluation of the new standard is substantially complete, and the Company does not expect adoption of the new standard to have a material impact on the income statement or retained earnings. The Company currently expects the most significant effect of the standard relates to trucks sold in Europe that are subject to a residual value guarantee (RVG) and are currently accounted for as an operating lease in the Truck, Parts and Other section of the Company’s Consolidated Balance Sheets (see Note E in the 2016 Form 10-K). In addition to ASU 2016-16 STANDARD DESCRIPTION 2017-04* Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. 2016-09** Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. 2015-11** Inventory (Topic 330): Simplifying the Measurement of Inventory. * The Company early adopted in 2017. ** The Company adopted on the effective date of January 1, 2017. The FASB also issued the following standard, which is not expected to have a material impact on the Company’s consolidated financial statements. STANDARD DESCRIPTION EFFECTIVE DATE* 2016-01 Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. January 1, 2018 * The Company expects to adopt on the effective date. |
Investments in Marketable Debt
Investments in Marketable Debt Securities | 6 Months Ended |
Jun. 30, 2017 | |
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. 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 June 30, 2017 and December 31, 2016 consisted of the following: At June 30, 2017 AMORTIZED UNREALIZED UNREALIZED FAIR VALUE U.S. tax-exempt $ 563.1 $ 1.3 $ .4 $ 564.0 U.S. corporate securities 58.8 .1 .1 58.8 U.S. government and agency securities 15.6 15.6 Non-U.S. 377.9 1.2 .6 378.5 Non-U.S. 92.9 .3 .1 93.1 Other debt securities 134.6 .2 .2 134.6 $ 1,242.9 $ 3.1 $ 1.4 $ 1,244.6 At December 31, 2016 AMORTIZED UNREALIZED UNREALIZED FAIR U.S. tax-exempt $ 597.9 $ .2 $ 3.1 $ 595.0 U.S. corporate securities 47.6 .2 47.8 U.S. government and agency securities 16.0 16.0 Non-U.S. 306.9 1.5 .4 308.0 Non-U.S. 97.6 .6 98.2 Other debt securities 75.9 .2 .2 75.9 $ 1,141.9 $ 2.7 $ 3.7 $ 1,140.9 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 $.9 and $1.3 and gross realized losses were $.3 and $.1 for the six month periods ended June 30, 2017 and 2016, respectively. Marketable debt securities with continuous unrealized losses and their related fair values were as follows: June 30, 2017 December 31, 2016 LESS THAN TWELVE MONTHS LESS THAN TWELVE MONTHS Fair value $ 450.3 $ 615.5 Unrealized losses 1.4 3.7 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 June 30, 2017 were as follows: Maturities: AMORTIZED FAIR VALUE Within one year $ 341.9 $ 342.1 One to five years 891.9 893.4 More than ten years 9.1 9.1 $ 1,242.9 $ 1,244.6 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2017 | |
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, first-out first-in, first-out Inventories include the following: June 30 December 31 Finished products $ 518.0 $ 452.3 Work in process and raw materials 539.3 444.7 1,057.3 897.0 Less LIFO reserve (172.0 ) (169.2 ) $ 885.3 $ 727.8 Under the LIFO method of accounting (used for approximately 46% of June 30, 2017 inventories), an actual valuation can be made only at the end of each year based on year-end year-end |
Finance and Other Receivables
Finance and Other Receivables | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Finance and Other Receivables | NOTE D - Finance and Other Receivables Finance and other receivables include the following: June 30 December 31 Loans $ 3,923.3 $ 3,948.6 Direct financing leases 3,065.0 2,798.0 Sales-type finance leases 768.8 867.3 Dealer wholesale financing 1,764.0 1,528.5 Operating lease receivables and other 187.2 150.9 Unearned interest: Finance leases (360.4 ) (344.7 ) $ 9,347.9 $ 8,948.6 Less allowance for losses: Loans and leases (103.9 ) (97.1 ) Dealer wholesale financing (5.9 ) (5.5 ) Operating lease receivables and other (9.2 ) (8.6 ) $ 9,228.9 $ 8,837.4 Recognition of interest income and rental revenue is suspended (put on non-accrual non-accrual 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 four months in 2017 and 2016 and did not have a significant effect on the weighted average term or interest rate of the total portfolio at June 30, 2017 and December 31, 2016. 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 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 sold individually, which is the lowest unit of account, 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 charge-off charge-off. charge-off 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: 2017 DEALER CUSTOMER WHOLESALE RETAIL RETAIL OTHER* TOTAL Balance at January 1 $ 5.5 $ 9.6 $ 87.5 $ 8.6 $ 111.2 Provision for losses (.7 ) 12.8 .6 12.7 Charge-offs (11.5 ) (.5 ) (12.0 ) Recoveries 2.2 .1 2.3 Currency translation and other .4 .2 3.8 .4 4.8 Balance at June 30 $ 5.9 $ 9.1 $ 94.8 $ 9.2 $ 119.0 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 (1.1 ) (.5 ) 9.6 1.4 9.4 Charge-offs (9.7 ) (1.6 ) (11.3 ) Recoveries 1.3 .1 1.4 Currency translation and other .1 .1 (.4 ) .3 .1 Balance at June 30 $ 6.3 $ 9.9 $ 89.7 $ 8.5 $ 114.4 * Operating leases and other trade receivables. Information regarding finance receivables evaluated and determined individually and collectively is as follows: DEALER CUSTOMER At June 30, 2017 WHOLESALE RETAIL RETAIL TOTAL Recorded investment for impaired finance receivables evaluated individually $ .1 $ 4.0 $ 55.6 $ 59.7 Allowance for impaired finance receivables determined individually .1 8.1 8.2 Recorded investment for finance receivables evaluated collectively 1,763.9 1,282.0 6,055.1 9,101.0 Allowance for finance receivables determined collectively 5.8 9.1 86.7 101.6 DEALER CUSTOMER At December 31, 2016 WHOLESALE RETAIL RETAIL TOTAL Recorded investment for impaired finance receivables evaluated individually $ .1 $ 57.3 $ 57.4 Allowance for impaired finance receivables determined individually .1 4.9 5.0 Recorded investment for finance receivables evaluated collectively 1,528.4 $ 1,406.0 5,805.9 8,740.3 Allowance for finance receivables determined collectively 5.4 9.6 82.6 97.6 The recorded investment for finance receivables that are on non-accrual June 30 December 31 Dealer: Wholesale $ .1 $ .1 Customer retail: Fleet 47.3 49.5 Owner/operator 6.5 6.9 $ 53.9 $ 56.5 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 June 30, 2017 and December 31, 2016 was not significantly different than the unpaid principal balance. DEALER CUSTOMER RETAIL At June 30, 2017 WHOLESALE RETAIL FLEET OWNER/ TOTAL Impaired loans with a specific reserve $ .1 $ 22.4 $ 1.7 $ 24.2 Associated allowance (.1 ) (4.1 ) (.4 ) (4.6 ) $ 18.3 $ 1.3 $ 19.6 Impaired loans with no specific reserve $ 3.9 10.8 .2 14.9 Net carrying amount of impaired loans $ 3.9 $ 29.1 $ 1.5 $ 34.5 Average recorded investment* $ .9 $ 3.8 $ 30.7 $ 2.2 $ 37.6 * Represents the average during the 12 months ended June 30, 2017. DEALER CUSTOMER RETAIL At December 31, 2016 WHOLESALE RETAIL FLEET OWNER/ TOTAL Impaired loans with a specific reserve $ .1 $ 18.9 $ 1.8 $ 20.8 Associated allowance (.1 ) (2.8 ) (.3 ) (3.2 ) $ 16.1 $ 1.5 $ 17.6 Impaired loans with no specific reserve 10.8 .2 11.0 Net carrying amount of impaired loans $ 26.9 $ 1.7 $ 28.6 Average recorded investment* $ 4.2 $ 28.1 $ 2.4 $ 34.7 * Represents the average during the 12 months ended June 30, 2016. During the period the loans above were considered impaired, interest income recognized on a cash basis was as follows: Three Months Ended June 30 Six Months Ended June 30 2017 2016 2017 2016 Interest income recognized: Customer retail - fleet $ .3 $ .3 $ .6 $ .6 Customer retail - owner/operator .1 .2 $ .3 $ .4 $ .6 $ .8 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 The Company has three credit quality indicators: performing, watch and at-risk. high-risk. At-risk non-accrual DEALER CUSTOMER RETAIL At June 30, 2017 WHOLESALE RETAIL FLEET OWNER/ TOTAL Performing $ 1,757.9 $ 1,282.1 $ 5,019.1 $ 956.5 $ 9,015.6 Watch 6.0 71.4 8.0 85.4 At-risk .1 3.9 48.9 6.8 59.7 $ 1,764.0 $ 1,286.0 $ 5,139.4 $ 971.3 $ 9,160.7 DEALER CUSTOMER RETAIL At December 31, 2016 WHOLESALE RETAIL FLEET OWNER/ TOTAL Performing $ 1,519.3 $ 1,406.0 $ 4,863.4 $ 922.1 $ 8,710.8 Watch 9.1 14.9 5.5 29.5 At-risk .1 50.4 6.9 57.4 $ 1,528.5 $ 1,406.0 $ 4,928.7 $ 934.5 $ 8,797.7 The tables below summarize the Company’s finance receivables by aging category. In determining past due status, the Company considers the entire contractual account balance past due when any installment is over 30 days past due. Substantially all customer accounts that were greater than 30 days past due prior to credit modification became current upon modification for aging purposes. DEALER CUSTOMER RETAIL At June 30, 2017 WHOLESALE RETAIL FLEET OWNER/ TOTAL Current and up to 30 days past due $ 1,763.1 $ 1,286.0 $ 5,103.4 $ 959.8 $ 9,112.3 31 – 60 days past due .8 20.5 5.5 26.8 Greater than 60 days past due .1 15.5 6.0 21.6 $ 1,764.0 $ 1,286.0 $ 5,139.4 $ 971.3 $ 9,160.7 DEALER CUSTOMER RETAIL At December 31, 2016 WHOLESALE RETAIL FLEET OWNER/ TOTAL Current and up to 30 days past due $ 1,528.4 $ 1,406.0 $ 4,898.4 $ 926.4 $ 8,759.2 31 – 60 days past due 12.6 3.9 16.5 Greater than 60 days past due .1 17.7 4.2 22.0 $ 1,528.5 $ 1,406.0 $ 4,928.7 $ 934.5 $ 8,797.7 Troubled Debt Restructurings The balance of TDRs was $43.5 and $43.1 at June 30, 2017 and December 31, 2016, respectively. At modification date, the pre-modification Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 RECORDED INVESTMENT RECORDED INVESTMENT PRE-MODIFICATION POST-MODIFICATION PRE-MODIFICATION POST-MODIFICATION Fleet $ 7.8 $ 7.8 $ 16.6 $ 16.6 Owner/operator .2 .3 .4 .4 $ 8.0 $ 8.1 $ 17.0 $ 17.0 Three Months Ended Six Months Ended RECORDED INVESTMENT RECORDED INVESTMENT PRE-MODIFICATION POST-MODIFICATION PRE-MODIFICATION POST-MODIFICATION Fleet $ 6.4 $ 6.4 $ 14.0 $ 13.9 Owner/operator 1.4 1.4 3.3 3.3 $ 7.8 $ 7.8 $ 17.3 $ 17.2 The effect on the allowance for credit losses from such modifications was not significant at June 30, 2017 and 2016. 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: Six Months Ended June 30, 2017 2016 Fleet $ 1.0 $ 6.7 Owner/operator .1 .1 $ 1.1 $ 6.8 The TDRs that subsequently defaulted did not significantly impact the Company’s allowance for credit losses at June 30, 2017 and 2016. 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 June 30, 2017 and December 31, 2016 was $26.6 and $25.4, respectively. Proceeds from the sales of repossessed assets were $29.2 and $21.7 for the six months ended June 30, 2017 and 2016, 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 Income (Loss). |
Product Support Liabilities
Product Support Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Product Warranties Disclosures [Abstract] | |
Product Support Liabilities | NOTE E - Product Support Liabilities Product support liabilities include estimated future payments related to product warranties and deferred revenues on 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 2017 2016 Balance at January 1 $ 282.1 $ 346.2 Cost accruals 102.7 109.3 Payments (121.6 ) (128.8 ) Change in estimates for pre-existing 2.6 (2.8 ) Currency translation 8.6 (4.0 ) Balance at June 30 $ 274.4 $ 319.9 DEFERRED REVENUES ON EXTENDED WARRANTIES AND R&M CONTRACTS 2017 2016 Balance at January 1 $ 573.5 $ 524.8 Deferred revenues 176.7 192.0 Revenues recognized (152.9 ) (135.9 ) Currency translation 22.8 (7.0 ) Balance at June 30 $ 620.1 $ 573.9 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE F - Stockholders’ Equity Comprehensive Income (Loss) The components of comprehensive income (loss) are as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 Net income (loss) $ 373.0 $ 481.3 $ 683.3 $ (113.3 ) Other comprehensive income (loss) (OCI): Unrealized gains (losses) on derivative contracts 11.6 9.5 (2.0 ) 2.9 Tax effect (3.1 ) (2.6 ) .9 (.5 ) 8.5 6.9 (1.1 ) 2.4 Unrealized (losses) gains on marketable debt securities (.5 ) 2.6 2.9 5.8 Tax effect .1 (.8 ) (1.2 ) (1.8 ) (.4 ) 1.8 1.7 4.0 Pension plans (1.4 ) 15.4 2.5 22.4 Tax effect (4.8 ) (1.3 ) (7.2 ) (1.4 ) 10.6 1.2 15.2 Foreign currency translation gains (losses) 126.1 (57.2 ) 201.1 68.3 Net other comprehensive income (loss) 132.8 (37.9 ) 202.9 89.9 Comprehensive income (loss) $ 505.8 $ 443.4 $ 886.2 $ (23.4 ) 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: Three Months Ended June 30, 2017 DERIVATIVE MARKETABLE PENSION FOREIGN TOTAL Balance at April 1, 2017 $ (13.9 ) $ 1.8 $ (411.5 ) $ (634.4 ) $ (1,058.0 ) Recorded into AOCI (28.2 ) (.3 ) (5.7 ) 126.1 91.9 Reclassified out of AOCI 36.7 (.1 ) 4.3 40.9 Net other comprehensive income (loss) 8.5 (.4 ) (1.4 ) 126.1 132.8 Balance at June 30, 2017 $ (5.4 ) $ 1.4 $ (412.9 ) $ (508.3 ) $ (925.2 ) Three Months Ended June 30, 2016 DERIVATIVE MARKETABLE PENSION FOREIGN TOTAL Balance at April 1, 2016 $ (10.9 ) $ 4.3 $ (385.8 ) $ (496.8 ) $ (889.2 ) Recorded into AOCI 15.7 2.1 5.6 (57.2 ) (33.8 ) Reclassified out of AOCI (8.8 ) (.3 ) 5.0 (4.1 ) Net other comprehensive income (loss) 6.9 1.8 10.6 (57.2 ) (37.9 ) Balance at June 30, 2016 $ (4.0 ) $ 6.1 $ (375.2 ) $ (554.0 ) $ (927.1 ) Six Months Ended June 30, 2017 DERIVATIVE MARKETABLE PENSION FOREIGN TOTAL Balance at January 1, 2017 $ (4.3 ) $ (.3 ) $ (414.1 ) $ (709.4 ) $ (1,128.1 ) Recorded into AOCI (74.1 ) 2.0 (7.8 ) 201.1 121.2 Reclassified out of AOCI 73.0 (.3 ) 9.0 81.7 Net other comprehensive (loss) income (1.1 ) 1.7 1.2 201.1 202.9 Balance at June 30, 2017 $ (5.4 ) $ 1.4 $ (412.9 ) $ (508.3 ) $ (925.2 ) Six Months Ended June 30, 2016 DERIVATIVE MARKETABLE PENSION FOREIGN TOTAL Balance at January 1, 2016 $ (6.4 ) $ 2.1 $ (390.4 ) $ (622.3 ) $ (1,017.0 ) Recorded into AOCI (26.0 ) 4.8 5.7 68.3 52.8 Reclassified out of AOCI 28.4 (.8 ) 9.5 37.1 Net other comprehensive income 2.4 4.0 15.2 68.3 89.9 Balance at June 30, 2016 $ (4.0 ) $ 6.1 $ (375.2 ) $ (554.0 ) $ (927.1 ) Reclassifications out of AOCI during the three months ended June 30, 2017 and 2016 are as follows: AOCI COMPONENTS LINE ITEM IN THE CONSOLIDATED STATEMENTS OF Three Months Ended 2017 2016 Unrealized losses (gains) on derivative contracts: Truck, Parts and Other Foreign-exchange contracts Net sales and revenues $ 12.1 $ (1.7 ) Cost of sales and revenues (1.3 ) .6 Interest and other expense (income), net .6 .2 Financial Services Interest-rate contracts Interest and other borrowing expenses 40.0 (7.6 ) Pre-tax 51.4 (8.5 ) Tax benefit (14.7 ) (.3 ) After-tax 36.7 (8.8 ) Unrealized gains on marketable debt securities: Marketable debt securities Investment income (.1 ) (.4 ) Tax expense .1 After-tax (.1 ) (.3 ) Pension plans: Truck, Parts and Other Actuarial loss Cost of sales and revenues 2.7 3.5 Selling, general and administrative 3.0 3.6 5.7 7.1 Prior service costs Cost of sales and revenues .3 .3 Financial Services Actuarial loss Selling, general and administrative .2 .3 Pre-tax 6.2 7.7 Tax benefit (1.9 ) (2.7 ) After-tax 4.3 5.0 Total reclassifications out of AOCI $ 40.9 $ (4.1 ) Reclassifications out of AOCI during the six months ended June 30, 2017 and 2016 are as follows: AOCI COMPONENTS LINE ITEM IN THE CONSOLIDATED STATEMENTS OF Six Months Ended 2017 2016 Unrealized losses (gains) on derivative contracts: Truck, Parts and Other Foreign-exchange contracts Net sales and revenues $ 16.3 $ (6.5 ) Cost of sales and revenues (1.2 ) .6 Interest and other expense (income), net .6 1.9 Financial Services Interest-rate contracts Interest and other borrowing expenses 85.8 50.3 Pre-tax 101.5 46.3 Tax benefit (28.5 ) (17.9 ) After-tax 73.0 28.4 Unrealized gains on marketable debt securities: Marketable debt securities Investment income (.4 ) (1.1 ) Tax expense .1 .3 After-tax (.3 ) (.8 ) Pension plans: Truck, Parts and Other Actuarial loss Cost of sales and revenues 6.1 6.9 Selling, general and administrative 6.1 6.5 12.2 13.4 Prior service costs Cost of sales and revenues .5 .5 Selling, general and administrative .1 .1 .6 .6 Financial Services Actuarial loss Selling, general and administrative .4 .5 Pre-tax 13.2 14.5 Tax benefit (4.2 ) (5.0 ) After-tax 9.0 9.5 Total reclassifications out of AOCI $ 81.7 $ 37.1 Stock Compensation Plans Stock-based compensation expense was $1.9 and $9.0 for the three months and six months ended June 30, 2017, respectively, and $1.9 and $9.1 for the three and six months ended June 30, 2016, respectively. Realized tax benefits related to the excess of deductible amounts over expense recognized was nil for the three and six months ended June 30, 2017 and $.1 and $.2 for the three and six months ended June 30, 2016, respectively. During the first half of 2017, the Company issued 558,148 common shares under deferred and stock compensation arrangements. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE G - Income Taxes The effective tax rate for the second quarter of 2017 was 30.8% compared to 25.5% for the second quarter of 2016, and the effective tax rate for the first half of 2017 was 30.8% compared to 152.3% in the same period of 2016. Substantially all of the difference in tax rates for both periods was due to the non-taxable non-deductible |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2017 | |
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 EC 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 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 EC charge and a portion of corporate expenses. Three Months Ended Six Months Ended June 30 June 30 2017 2016 2017 2016 Net sales and revenues: Truck $ 3,768.9 $ 3,598.0 $ 7,066.2 $ 7,070.4 Less intersegment (215.3 ) (256.8 ) (382.5 ) (458.7 ) External customers 3,553.6 3,341.2 6,683.7 6,611.7 Parts 835.2 769.5 1,634.3 1,498.8 Less intersegment (12.1 ) (13.1 ) (24.5 ) (22.9 ) External customers 823.1 756.4 1,609.8 1,475.9 Other 21.2 18.2 40.1 38.8 4,397.9 4,115.8 8,333.6 8,126.4 Financial Services 306.3 297.4 608.5 586.8 $ 4,704.2 $ 4,413.2 $ 8,942.1 $ 8,713.2 Income (loss) before income taxes: Truck $ 323.7 $ 329.4 $ 565.4 $ 633.5 Parts 152.4 133.4 304.1 268.0 Other* (8.8 ) 99.7 (19.4 ) (854.6 ) 467.3 562.5 850.1 46.9 Financial Services 63.0 77.3 120.3 157.6 Investment income 8.7 6.4 16.8 12.1 $ 539.0 $ 646.2 $ 987.2 $ 216.6 Depreciation and amortization: Truck $ 111.0 $ 112.3 $ 218.1 $ 221.9 Parts 2.0 1.9 3.9 3.5 Other 4.2 3.9 8.0 7.8 117.2 118.1 230.0 233.2 Financial Services 151.8 134.8 298.2 262.2 $ 269.0 $ 252.9 $ 528.2 $ 495.4 * Other includes a favorable adjustment to the European Commission charge of $109.6 in the second quarter of 2016 and an expense of $833.0 for the first half of 2016. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
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 $55.6 at June 30, 2017. 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 June 30, 2017, the notional amount of the Company’s interest-rate contracts was $2,688.5. Notional maturities for all interest-rate contracts are $283.3 for the remainder of 2017, $972.1 for 2018, $854.1 for 2019, $375.6 for 2020, $203.4 for 2021 and nil thereafter. Foreign-Exchange Contracts: The following table presents the balance sheet classification, fair value, gross and pro forma net amounts of derivative financial instruments: June 30, 2017 December 31, 2016 ASSETS LIABILITIES ASSETS LIABILITIES Derivatives designated under hedge accounting: Interest-rate contracts: Financial Services: Other assets $ 55.6 $ 109.7 Deferred taxes and other liabilities $ 72.7 $ 46.3 Foreign-exchange contracts: Truck, Parts and Other: Other current assets 2.3 3.9 Accounts payable, accrued expenses and other 6.0 1.9 $ 57.9 $ 78.7 $ 113.6 $ 48.2 Economic hedges: Interest-rate contracts: Financial Services: Deferred taxes and other liabilities $ .1 Foreign-exchange contracts: Truck, Parts and Other: Other current assets $ 1.1 $ .8 Accounts payable, accrued expenses and other $ .7 .3 Financial Services: Other assets .6 4.0 Deferred taxes and other liabilities 3.5 .7 $ 1.7 $ 4.2 $ 4.8 $ 1.1 Gross amounts recognized in Balance Sheet $ 59.6 $ 82.9 $ 118.4 $ 49.3 Less amounts not offset in financial instruments: Truck, Parts and Other: Foreign-exchange contracts (.2 ) (.2 ) (1.0 ) (1.0 ) Financial Services: Interest-rate contracts (7.8 ) (7.8 ) (15.4 ) (15.4 ) Foreign-exchange contracts (.8 ) (.8 ) (.1 ) (.1 ) Pro forma net amount $ 50.8 $ 74.1 $ 101.9 $ 32.8 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 Income (Loss) as follows: Three Months Ended Six Months Ended June 30 June 30 2017 2016 2017 2016 Interest-rate swaps $ (.7 ) $ (3.0 ) $ .6 $ (5.0 ) Term notes .9 2.8 (.4 ) 4.4 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 4.1 years. For the three and six month periods ended June 30, 2017 and 2016, the Company recognized no gains and losses or losses on the ineffective portion. The following table presents the pre-tax Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Loss recognized in OCI: Truck, Parts and Other $ (1.7 ) $ (20.4 ) Financial Services $ (38.1 ) $ (83.1 ) $ (38.1 ) $ (1.7 ) $ (83.1 ) $ (20.4 ) Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Gain (loss) recognized in OCI: Truck, Parts and Other $ 9.6 $ 9.9 Financial Services $ 8.4 $ (53.3 ) $ 8.4 $ 9.6 $ (53.3 ) $ 9.9 Expense (income) reclassified out of AOCI into income was as follows: Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Truck, Parts and Other: Net sales and revenues $ 12.1 $ 16.3 Cost of sales and revenues (1.3 ) (1.2 ) Interest and other expense (income), net .6 .6 Financial Services: Interest and other borrowing expenses $ 40.0 $ 85.8 Total $ 40.0 $ 11.4 $ 85.8 $ 15.7 Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Truck, Parts and Other: Net sales and revenues $ (1.7 ) $ (6.5 ) Cost of sales and revenues .6 .6 Interest and other expense (income), net .2 1.9 Financial Services: Interest and other borrowing expenses $ (7.6 ) $ 50.3 Total $ (7.6 ) $ (.9 ) $ 50.3 $ (4.0 ) The amount of loss recorded in AOCI at June 30, 2017 that is estimated to be reclassified into earnings in the following 12 months if interest rates and exchange rates remain unchanged is approximately $2.7, 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 gains (losses) reclassified out of AOCI into net income based on the probability that the original forecasted transactions would not occur was nil for the three and six months ended June 30, 2017, and $.3 and ($.3) for the three and six month periods ended June 30, 2016. 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. The expense (income) recognized in earnings related to economic hedges was as follows: Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Truck, Parts and Other: Cost of sales and revenues $ .1 $ .7 Interest and other expense (income), net .7 4.2 Financial Services: Interest and other borrowing expenses $ (.1 ) 11.4 $ (.1 ) 44.6 Selling, general and administrative (2.3 ) (13.1 ) Total $ (.1 ) $ 9.9 $ (.1 ) $ 36.4 Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Truck, Parts and Other: Cost of sales and revenues $ .1 $ 1.1 Interest and other expense (income), net .9 .8 Financial Services: Interest and other borrowing expenses (10.6 ) (8.2 ) Selling, general and administrative .5 (1.6 ) Total $ (9.1 ) $ (7.9 ) |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
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 six months ended June 30, 2017. 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. 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 June 30, 2017 LEVEL 1 LEVEL 2 TOTAL Assets: Marketable debt securities U.S. tax-exempt $ 564.0 $ 564.0 U.S. corporate securities 58.8 58.8 U.S. government and agency securities $ 15.1 .5 15.6 Non-U.S. 378.5 378.5 Non-U.S. 93.1 93.1 Other debt securities 134.6 134.6 Total marketable debt securities $ 15.1 $ 1,229.5 $ 1,244.6 Derivatives Cross currency swaps $ 50.7 $ 50.7 Interest-rate swaps 4.9 4.9 Foreign-exchange contracts 4.0 4.0 Total derivative assets $ 59.6 $ 59.6 Liabilities: Derivatives Cross currency swaps $ 65.4 $ 65.4 Interest-rate swaps 7.3 7.3 Foreign-exchange contracts 10.2 10.2 Total derivative liabilities $ 82.9 $ 82.9 At December 31, 2016 LEVEL 1 LEVEL 2 TOTAL Assets: Marketable debt securities U.S. tax-exempt $ 595.0 $ 595.0 U.S. corporate securities 47.8 47.8 U.S. government and agency securities $ 15.4 .6 16.0 Non-U.S. 308.0 308.0 Non-U.S. 98.2 98.2 Other debt securities 75.9 75.9 Total marketable debt securities $ 15.4 $ 1,125.5 $ 1,140.9 Derivatives Cross currency swaps $ 102.7 $ 102.7 Interest-rate swaps 7.0 7.0 Foreign-exchange contracts 8.7 8.7 Total derivative assets $ 118.4 $ 118.4 Liabilities: Derivatives Cross currency swaps $ 37.1 $ 37.1 Interest-rate swaps 9.3 9.3 Foreign-exchange contracts 2.9 2.9 Total derivative liabilities $ 49.3 $ 49.3 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: June 30, 2017 December 31, 2016 CARRYING FAIR CARRYING FAIR Assets: Financial Services fixed rate loans $ 3,534.7 $ 3,536.0 $ 3,607.4 $ 3,638.4 Liabilities: Financial Services fixed rate debt 5,032.2 5,038.3 4,915.2 4,929.3 |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [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 Six Months Ended 2017 2016 2017 2016 Service cost $ 22.2 $ 22.6 $ 46.0 $ 44.5 Interest on projected benefit obligation 20.0 24.1 40.4 47.7 Expected return on assets (39.6 ) (36.1 ) (79.4 ) (71.7 ) Amortization of prior service costs .3 .3 .6 .6 Recognized actuarial loss 5.9 7.4 12.6 13.9 Net pension expense $ 8.8 $ 18.3 $ 20.2 $ 35.0 On January 1, 2017, the Company changed the method used to estimate service cost and interest cost components of pension expense from a single weighted-average method, which is a single discount rate determined at the pension plans measurement date, to an individual spot rate approach, which applies specific spot rates along the yield curve to the relevant projected cash flows. This approach is a more precise measurement of net periodic benefit costs and does not impact the benefit obligation. The Company considers this a change in estimate inseparable from a change in accounting principle and is being accounted for prospectively. This change will lower net pension expense by approximately $15.0 in 2017. During the three and six months ended June 30, 2017, the Company contributed $5.5 and $10.4 to its pension plans, respectively, and $54.2 and $59.3 for the three and six months ended June 30, 2016, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE L - Commitments and Contingencies In the first quarter of 2016, the Company recorded a charge of €850.0 ($942.6) in connection with an investigation by the EC of all major European truck manufacturers, including DAF Trucks N.V., its subsidiary DAF Trucks Deutschland GmbH (collectively, “DAF”) and the Company as their parent. On July 19, 2016, the EC reached a settlement with DAF and the Company under which the EC imposed a fine of €752.7 ($833.0) for infringement of European Union competition rules. As a result of the settlement, the Company reversed, in the second quarter of 2016, €97.3 ($109.6) of the previously recorded charge. DAF paid the fine in August 2016. Following the EC settlement, claims and a petition to certify a claim as a class action have been filed against DAF and other truck manufacturers. Others may bring EC-related The Company is a defendant in various legal proceedings and, in addition, there are various other contingent liabilities arising in the normal course of business. After consultation with legal counsel, management does not anticipate that disposition of these various proceedings and contingent liabilities will have a material effect on the consolidated financial statements. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Investment in Marketable Debt Securities | The Company’s investments in marketable debt securities are classified as available-for-sale. 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, first-out first-in, first-out |
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 four months in 2017 and 2016 and did not have a significant effect on the weighted average term or interest rate of the total portfolio at June 30, 2017 and December 31, 2016. 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 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 sold individually, which is the lowest unit of account, 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 charge-off charge-off. charge-off |
Product Support Liabilities | Product support liabilities include estimated future payments related to product warranties and deferred revenues on 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 $55.6 at June 30, 2017. 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. |
Fair Value Measurement Policy | 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 six months ended June 30, 2017. 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. Derivative Financial Instruments: |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 Six Months Ended 2017 2016 2017 2016 Additional shares 933,300 704,800 1,013,700 Antidilutive options 616,800 1,934,300 649,300 2,597,600 |
Investments in Marketable Deb20
Investments in Marketable Debt Securities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Debt Securities | Marketable debt securities at June 30, 2017 and December 31, 2016 consisted of the following: At June 30, 2017 AMORTIZED UNREALIZED UNREALIZED FAIR VALUE U.S. tax-exempt $ 563.1 $ 1.3 $ .4 $ 564.0 U.S. corporate securities 58.8 .1 .1 58.8 U.S. government and agency securities 15.6 15.6 Non-U.S. 377.9 1.2 .6 378.5 Non-U.S. 92.9 .3 .1 93.1 Other debt securities 134.6 .2 .2 134.6 $ 1,242.9 $ 3.1 $ 1.4 $ 1,244.6 At December 31, 2016 AMORTIZED UNREALIZED UNREALIZED FAIR U.S. tax-exempt $ 597.9 $ .2 $ 3.1 $ 595.0 U.S. corporate securities 47.6 .2 47.8 U.S. government and agency securities 16.0 16.0 Non-U.S. 306.9 1.5 .4 308.0 Non-U.S. 97.6 .6 98.2 Other debt securities 75.9 .2 .2 75.9 $ 1,141.9 $ 2.7 $ 3.7 $ 1,140.9 |
Marketable Debt Securities Continuous Unrealized Losses | Marketable debt securities with continuous unrealized losses and their related fair values were as follows: June 30, 2017 December 31, 2016 LESS THAN TWELVE MONTHS LESS THAN TWELVE MONTHS Fair value $ 450.3 $ 615.5 Unrealized losses 1.4 3.7 |
Contractual Maturities of Debt Securities | Contractual maturities on marketable debt securities at June 30, 2017 were as follows: Maturities: AMORTIZED FAIR VALUE Within one year $ 341.9 $ 342.1 One to five years 891.9 893.4 More than ten years 9.1 9.1 $ 1,242.9 $ 1,244.6 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories Table | Inventories include the following: June 30 December 31 Finished products $ 518.0 $ 452.3 Work in process and raw materials 539.3 444.7 1,057.3 897.0 Less LIFO reserve (172.0 ) (169.2 ) $ 885.3 $ 727.8 |
Finance and Other Receivables (
Finance and Other Receivables (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
Finance and Other Receivables | Finance and other receivables include the following: June 30 December 31 Loans $ 3,923.3 $ 3,948.6 Direct financing leases 3,065.0 2,798.0 Sales-type finance leases 768.8 867.3 Dealer wholesale financing 1,764.0 1,528.5 Operating lease receivables and other 187.2 150.9 Unearned interest: Finance leases (360.4 ) (344.7 ) $ 9,347.9 $ 8,948.6 Less allowance for losses: Loans and leases (103.9 ) (97.1 ) Dealer wholesale financing (5.9 ) (5.5 ) Operating lease receivables and other (9.2 ) (8.6 ) $ 9,228.9 $ 8,837.4 |
Allowance for Credit Losses | The allowance for credit losses is summarized as follows: 2017 DEALER CUSTOMER WHOLESALE RETAIL RETAIL OTHER* TOTAL Balance at January 1 $ 5.5 $ 9.6 $ 87.5 $ 8.6 $ 111.2 Provision for losses (.7 ) 12.8 .6 12.7 Charge-offs (11.5 ) (.5 ) (12.0 ) Recoveries 2.2 .1 2.3 Currency translation and other .4 .2 3.8 .4 4.8 Balance at June 30 $ 5.9 $ 9.1 $ 94.8 $ 9.2 $ 119.0 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 (1.1 ) (.5 ) 9.6 1.4 9.4 Charge-offs (9.7 ) (1.6 ) (11.3 ) Recoveries 1.3 .1 1.4 Currency translation and other .1 .1 (.4 ) .3 .1 Balance at June 30 $ 6.3 $ 9.9 $ 89.7 $ 8.5 $ 114.4 * 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 June 30, 2017 WHOLESALE RETAIL RETAIL TOTAL Recorded investment for impaired finance receivables evaluated individually $ .1 $ 4.0 $ 55.6 $ 59.7 Allowance for impaired finance receivables determined individually .1 8.1 8.2 Recorded investment for finance receivables evaluated collectively 1,763.9 1,282.0 6,055.1 9,101.0 Allowance for finance receivables determined collectively 5.8 9.1 86.7 101.6 DEALER CUSTOMER At December 31, 2016 WHOLESALE RETAIL RETAIL TOTAL Recorded investment for impaired finance receivables evaluated individually $ .1 $ 57.3 $ 57.4 Allowance for impaired finance receivables determined individually .1 4.9 5.0 Recorded investment for finance receivables evaluated collectively 1,528.4 $ 1,406.0 5,805.9 8,740.3 Allowance for finance receivables determined collectively 5.4 9.6 82.6 97.6 |
Recorded Investment for Finance Receivables that are on Non-Accrual Status | The recorded investment for finance receivables that are on non-accrual June 30 December 31 Dealer: Wholesale $ .1 $ .1 Customer retail: Fleet 47.3 49.5 Owner/operator 6.5 6.9 $ 53.9 $ 56.5 |
Impaired Loans and Specific Reserve | The recorded investment of impaired loans as of June 30, 2017 and December 31, 2016 was not significantly different than the unpaid principal balance. DEALER CUSTOMER RETAIL At June 30, 2017 WHOLESALE RETAIL FLEET OWNER/ TOTAL Impaired loans with a specific reserve $ .1 $ 22.4 $ 1.7 $ 24.2 Associated allowance (.1 ) (4.1 ) (.4 ) (4.6 ) $ 18.3 $ 1.3 $ 19.6 Impaired loans with no specific reserve $ 3.9 10.8 .2 14.9 Net carrying amount of impaired loans $ 3.9 $ 29.1 $ 1.5 $ 34.5 Average recorded investment* $ .9 $ 3.8 $ 30.7 $ 2.2 $ 37.6 * Represents the average during the 12 months ended June 30, 2017. DEALER CUSTOMER RETAIL At December 31, 2016 WHOLESALE RETAIL FLEET OWNER/ TOTAL Impaired loans with a specific reserve $ .1 $ 18.9 $ 1.8 $ 20.8 Associated allowance (.1 ) (2.8 ) (.3 ) (3.2 ) $ 16.1 $ 1.5 $ 17.6 Impaired loans with no specific reserve 10.8 .2 11.0 Net carrying amount of impaired loans $ 26.9 $ 1.7 $ 28.6 Average recorded investment* $ 4.2 $ 28.1 $ 2.4 $ 34.7 * Represents the average during the 12 months ended June 30, 2016. |
Interest Income Recognized on Cash Basis | During the period the loans above were considered impaired, interest income recognized on a cash basis was as follows: Three Months Ended June 30 Six Months Ended June 30 2017 2016 2017 2016 Interest income recognized: Customer retail - fleet $ .3 $ .3 $ .6 $ .6 Customer retail - owner/operator .1 .2 $ .3 $ .4 $ .6 $ .8 |
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 June 30, 2017 WHOLESALE RETAIL FLEET OWNER/ TOTAL Performing $ 1,757.9 $ 1,282.1 $ 5,019.1 $ 956.5 $ 9,015.6 Watch 6.0 71.4 8.0 85.4 At-risk .1 3.9 48.9 6.8 59.7 $ 1,764.0 $ 1,286.0 $ 5,139.4 $ 971.3 $ 9,160.7 DEALER CUSTOMER RETAIL At December 31, 2016 WHOLESALE RETAIL FLEET OWNER/ TOTAL Performing $ 1,519.3 $ 1,406.0 $ 4,863.4 $ 922.1 $ 8,710.8 Watch 9.1 14.9 5.5 29.5 At-risk .1 50.4 6.9 57.4 $ 1,528.5 $ 1,406.0 $ 4,928.7 $ 934.5 $ 8,797.7 |
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 June 30, 2017 WHOLESALE RETAIL FLEET OWNER/ TOTAL Current and up to 30 days past due $ 1,763.1 $ 1,286.0 $ 5,103.4 $ 959.8 $ 9,112.3 31 – 60 days past due .8 20.5 5.5 26.8 Greater than 60 days past due .1 15.5 6.0 21.6 $ 1,764.0 $ 1,286.0 $ 5,139.4 $ 971.3 $ 9,160.7 DEALER CUSTOMER RETAIL At December 31, 2016 WHOLESALE RETAIL FLEET OWNER/ TOTAL Current and up to 30 days past due $ 1,528.4 $ 1,406.0 $ 4,898.4 $ 926.4 $ 8,759.2 31 – 60 days past due 12.6 3.9 16.5 Greater than 60 days past due .1 17.7 4.2 22.0 $ 1,528.5 $ 1,406.0 $ 4,928.7 $ 934.5 $ 8,797.7 |
Pre- and Post-Modification Recorded Investment Balances by Portfolio Class | At modification date, the pre-modification Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 RECORDED INVESTMENT RECORDED INVESTMENT PRE-MODIFICATION POST-MODIFICATION PRE-MODIFICATION POST-MODIFICATION Fleet $ 7.8 $ 7.8 $ 16.6 $ 16.6 Owner/operator .2 .3 .4 .4 $ 8.0 $ 8.1 $ 17.0 $ 17.0 Three Months Ended Six Months Ended RECORDED INVESTMENT RECORDED INVESTMENT PRE-MODIFICATION POST-MODIFICATION PRE-MODIFICATION POST-MODIFICATION Fleet $ 6.4 $ 6.4 $ 14.0 $ 13.9 Owner/operator 1.4 1.4 3.3 3.3 $ 7.8 $ 7.8 $ 17.3 $ 17.2 |
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: Six Months Ended June 30, 2017 2016 Fleet $ 1.0 $ 6.7 Owner/operator .1 .1 $ 1.1 $ 6.8 |
Product Support Liabilities (Ta
Product Support Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Product Warranties Disclosures [Abstract] | |
Changes in Product Support Liabilities, Warranty Reserves | Changes in product support liabilities are summarized as follows: WARRANTY RESERVES 2017 2016 Balance at January 1 $ 282.1 $ 346.2 Cost accruals 102.7 109.3 Payments (121.6 ) (128.8 ) Change in estimates for pre-existing 2.6 (2.8 ) Currency translation 8.6 (4.0 ) Balance at June 30 $ 274.4 $ 319.9 |
Changes in Product Support Liabilities, Deferred Revenues on Extended Warranties and R&M Contracts | Changes in product support liabilities are summarized as follows: DEFERRED REVENUES ON EXTENDED WARRANTIES AND R&M CONTRACTS 2017 2016 Balance at January 1 $ 573.5 $ 524.8 Deferred revenues 176.7 192.0 Revenues recognized (152.9 ) (135.9 ) Currency translation 22.8 (7.0 ) Balance at June 30 $ 620.1 $ 573.9 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Components of Comprehensive Income (Loss), Net of Related Tax | The components of comprehensive income (loss) are as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 Net income (loss) $ 373.0 $ 481.3 $ 683.3 $ (113.3 ) Other comprehensive income (loss) (OCI): Unrealized gains (losses) on derivative contracts 11.6 9.5 (2.0 ) 2.9 Tax effect (3.1 ) (2.6 ) .9 (.5 ) 8.5 6.9 (1.1 ) 2.4 Unrealized (losses) gains on marketable debt securities (.5 ) 2.6 2.9 5.8 Tax effect .1 (.8 ) (1.2 ) (1.8 ) (.4 ) 1.8 1.7 4.0 Pension plans (1.4 ) 15.4 2.5 22.4 Tax effect (4.8 ) (1.3 ) (7.2 ) (1.4 ) 10.6 1.2 15.2 Foreign currency translation gains (losses) 126.1 (57.2 ) 201.1 68.3 Net other comprehensive income (loss) 132.8 (37.9 ) 202.9 89.9 Comprehensive income (loss) $ 505.8 $ 443.4 $ 886.2 $ (23.4 ) |
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: Three Months Ended June 30, 2017 DERIVATIVE MARKETABLE PENSION FOREIGN TOTAL Balance at April 1, 2017 $ (13.9 ) $ 1.8 $ (411.5 ) $ (634.4 ) $ (1,058.0 ) Recorded into AOCI (28.2 ) (.3 ) (5.7 ) 126.1 91.9 Reclassified out of AOCI 36.7 (.1 ) 4.3 40.9 Net other comprehensive income (loss) 8.5 (.4 ) (1.4 ) 126.1 132.8 Balance at June 30, 2017 $ (5.4 ) $ 1.4 $ (412.9 ) $ (508.3 ) $ (925.2 ) Three Months Ended June 30, 2016 DERIVATIVE MARKETABLE PENSION FOREIGN TOTAL Balance at April 1, 2016 $ (10.9 ) $ 4.3 $ (385.8 ) $ (496.8 ) $ (889.2 ) Recorded into AOCI 15.7 2.1 5.6 (57.2 ) (33.8 ) Reclassified out of AOCI (8.8 ) (.3 ) 5.0 (4.1 ) Net other comprehensive income (loss) 6.9 1.8 10.6 (57.2 ) (37.9 ) Balance at June 30, 2016 $ (4.0 ) $ 6.1 $ (375.2 ) $ (554.0 ) $ (927.1 ) Six Months Ended June 30, 2017 DERIVATIVE MARKETABLE PENSION FOREIGN TOTAL Balance at January 1, 2017 $ (4.3 ) $ (.3 ) $ (414.1 ) $ (709.4 ) $ (1,128.1 ) Recorded into AOCI (74.1 ) 2.0 (7.8 ) 201.1 121.2 Reclassified out of AOCI 73.0 (.3 ) 9.0 81.7 Net other comprehensive (loss) income (1.1 ) 1.7 1.2 201.1 202.9 Balance at June 30, 2017 $ (5.4 ) $ 1.4 $ (412.9 ) $ (508.3 ) $ (925.2 ) Six Months Ended June 30, 2016 DERIVATIVE MARKETABLE PENSION FOREIGN TOTAL Balance at January 1, 2016 $ (6.4 ) $ 2.1 $ (390.4 ) $ (622.3 ) $ (1,017.0 ) Recorded into AOCI (26.0 ) 4.8 5.7 68.3 52.8 Reclassified out of AOCI 28.4 (.8 ) 9.5 37.1 Net other comprehensive income 2.4 4.0 15.2 68.3 89.9 Balance at June 30, 2016 $ (4.0 ) $ 6.1 $ (375.2 ) $ (554.0 ) $ (927.1 ) |
Reclassifications Out of Accumulated Other Comprehensive Income | Reclassifications out of AOCI during the three months ended June 30, 2017 and 2016 are as follows: AOCI COMPONENTS LINE ITEM IN THE CONSOLIDATED STATEMENTS OF Three Months Ended 2017 2016 Unrealized losses (gains) on derivative contracts: Truck, Parts and Other Foreign-exchange contracts Net sales and revenues $ 12.1 $ (1.7 ) Cost of sales and revenues (1.3 ) .6 Interest and other expense (income), net .6 .2 Financial Services Interest-rate contracts Interest and other borrowing expenses 40.0 (7.6 ) Pre-tax 51.4 (8.5 ) Tax benefit (14.7 ) (.3 ) After-tax 36.7 (8.8 ) Unrealized gains on marketable debt securities: Marketable debt securities Investment income (.1 ) (.4 ) Tax expense .1 After-tax (.1 ) (.3 ) Pension plans: Truck, Parts and Other Actuarial loss Cost of sales and revenues 2.7 3.5 Selling, general and administrative 3.0 3.6 5.7 7.1 Prior service costs Cost of sales and revenues .3 .3 Financial Services Actuarial loss Selling, general and administrative .2 .3 Pre-tax 6.2 7.7 Tax benefit (1.9 ) (2.7 ) After-tax 4.3 5.0 Total reclassifications out of AOCI $ 40.9 $ (4.1 ) Reclassifications out of AOCI during the six months ended June 30, 2017 and 2016 are as follows: AOCI COMPONENTS LINE ITEM IN THE CONSOLIDATED STATEMENTS OF Six Months Ended 2017 2016 Unrealized losses (gains) on derivative contracts: Truck, Parts and Other Foreign-exchange contracts Net sales and revenues $ 16.3 $ (6.5 ) Cost of sales and revenues (1.2 ) .6 Interest and other expense (income), net .6 1.9 Financial Services Interest-rate contracts Interest and other borrowing expenses 85.8 50.3 Pre-tax 101.5 46.3 Tax benefit (28.5 ) (17.9 ) After-tax 73.0 28.4 Unrealized gains on marketable debt securities: Marketable debt securities Investment income (.4 ) (1.1 ) Tax expense .1 .3 After-tax (.3 ) (.8 ) Pension plans: Truck, Parts and Other Actuarial loss Cost of sales and revenues 6.1 6.9 Selling, general and administrative 6.1 6.5 12.2 13.4 Prior service costs Cost of sales and revenues .5 .5 Selling, general and administrative .1 .1 .6 .6 Financial Services Actuarial loss Selling, general and administrative .4 .5 Pre-tax 13.2 14.5 Tax benefit (4.2 ) (5.0 ) After-tax 9.0 9.5 Total reclassifications out of AOCI $ 81.7 $ 37.1 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting Information by Segment | Three Months Ended Six Months Ended June 30 June 30 2017 2016 2017 2016 Net sales and revenues: Truck $ 3,768.9 $ 3,598.0 $ 7,066.2 $ 7,070.4 Less intersegment (215.3 ) (256.8 ) (382.5 ) (458.7 ) External customers 3,553.6 3,341.2 6,683.7 6,611.7 Parts 835.2 769.5 1,634.3 1,498.8 Less intersegment (12.1 ) (13.1 ) (24.5 ) (22.9 ) External customers 823.1 756.4 1,609.8 1,475.9 Other 21.2 18.2 40.1 38.8 4,397.9 4,115.8 8,333.6 8,126.4 Financial Services 306.3 297.4 608.5 586.8 $ 4,704.2 $ 4,413.2 $ 8,942.1 $ 8,713.2 Income (loss) before income taxes: Truck $ 323.7 $ 329.4 $ 565.4 $ 633.5 Parts 152.4 133.4 304.1 268.0 Other* (8.8 ) 99.7 (19.4 ) (854.6 ) 467.3 562.5 850.1 46.9 Financial Services 63.0 77.3 120.3 157.6 Investment income 8.7 6.4 16.8 12.1 $ 539.0 $ 646.2 $ 987.2 $ 216.6 Depreciation and amortization: Truck $ 111.0 $ 112.3 $ 218.1 $ 221.9 Parts 2.0 1.9 3.9 3.5 Other 4.2 3.9 8.0 7.8 117.2 118.1 230.0 233.2 Financial Services 151.8 134.8 298.2 262.2 $ 269.0 $ 252.9 $ 528.2 $ 495.4 * Other includes a favorable adjustment to the European Commission charge of $109.6 in the second quarter of 2016 and an expense of $833.0 for the first half of 2016. |
Derivative Financial Instrume26
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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: June 30, 2017 December 31, 2016 ASSETS LIABILITIES ASSETS LIABILITIES Derivatives designated under hedge accounting: Interest-rate contracts: Financial Services: Other assets $ 55.6 $ 109.7 Deferred taxes and other liabilities $ 72.7 $ 46.3 Foreign-exchange contracts: Truck, Parts and Other: Other current assets 2.3 3.9 Accounts payable, accrued expenses and other 6.0 1.9 $ 57.9 $ 78.7 $ 113.6 $ 48.2 Economic hedges: Interest-rate contracts: Financial Services: Deferred taxes and other liabilities $ .1 Foreign-exchange contracts: Truck, Parts and Other: Other current assets $ 1.1 $ .8 Accounts payable, accrued expenses and other $ .7 .3 Financial Services: Other assets .6 4.0 Deferred taxes and other liabilities 3.5 .7 $ 1.7 $ 4.2 $ 4.8 $ 1.1 Gross amounts recognized in Balance Sheet $ 59.6 $ 82.9 $ 118.4 $ 49.3 Less amounts not offset in financial instruments: Truck, Parts and Other: Foreign-exchange contracts (.2 ) (.2 ) (1.0 ) (1.0 ) Financial Services: Interest-rate contracts (7.8 ) (7.8 ) (15.4 ) (15.4 ) Foreign-exchange contracts (.8 ) (.8 ) (.1 ) (.1 ) Pro forma net amount $ 50.8 $ 74.1 $ 101.9 $ 32.8 |
Fair Value Hedging | Financial Services | |
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 Income (Loss) as follows: Three Months Ended Six Months Ended June 30 June 30 2017 2016 2017 2016 Interest-rate swaps $ (.7 ) $ (3.0 ) $ .6 $ (5.0 ) Term notes .9 2.8 (.4 ) 4.4 |
Cash Flow Hedging | |
Gains/Losses of Derivative Financial Instruments | The following table presents the pre-tax Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Loss recognized in OCI: Truck, Parts and Other $ (1.7 ) $ (20.4 ) Financial Services $ (38.1 ) $ (83.1 ) $ (38.1 ) $ (1.7 ) $ (83.1 ) $ (20.4 ) Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Gain (loss) recognized in OCI: Truck, Parts and Other $ 9.6 $ 9.9 Financial Services $ 8.4 $ (53.3 ) $ 8.4 $ 9.6 $ (53.3 ) $ 9.9 Expense (income) reclassified out of AOCI into income was as follows: Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Truck, Parts and Other: Net sales and revenues $ 12.1 $ 16.3 Cost of sales and revenues (1.3 ) (1.2 ) Interest and other expense (income), net .6 .6 Financial Services: Interest and other borrowing expenses $ 40.0 $ 85.8 Total $ 40.0 $ 11.4 $ 85.8 $ 15.7 Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Truck, Parts and Other: Net sales and revenues $ (1.7 ) $ (6.5 ) Cost of sales and revenues .6 .6 Interest and other expense (income), net .2 1.9 Financial Services: Interest and other borrowing expenses $ (7.6 ) $ 50.3 Total $ (7.6 ) $ (.9 ) $ 50.3 $ (4.0 ) |
Foreign Currency And Interest Rate Contract | |
Gains/Losses of Derivative Financial Instruments | The expense (income) recognized in earnings related to economic hedges was as follows: Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Truck, Parts and Other: Cost of sales and revenues $ .1 $ .7 Interest and other expense (income), net .7 4.2 Financial Services: Interest and other borrowing expenses $ (.1 ) 11.4 $ (.1 ) 44.6 Selling, general and administrative (2.3 ) (13.1 ) Total $ (.1 ) $ 9.9 $ (.1 ) $ 36.4 Three Months Ended Six Months Ended INTEREST- FOREIGN- INTEREST- FOREIGN- Truck, Parts and Other: Cost of sales and revenues $ .1 $ 1.1 Interest and other expense (income), net .9 .8 Financial Services: Interest and other borrowing expenses (10.6 ) (8.2 ) Selling, general and administrative .5 (1.6 ) Total $ (9.1 ) $ (7.9 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 June 30, 2017 LEVEL 1 LEVEL 2 TOTAL Assets: Marketable debt securities U.S. tax-exempt $ 564.0 $ 564.0 U.S. corporate securities 58.8 58.8 U.S. government and agency securities $ 15.1 .5 15.6 Non-U.S. 378.5 378.5 Non-U.S. 93.1 93.1 Other debt securities 134.6 134.6 Total marketable debt securities $ 15.1 $ 1,229.5 $ 1,244.6 Derivatives Cross currency swaps $ 50.7 $ 50.7 Interest-rate swaps 4.9 4.9 Foreign-exchange contracts 4.0 4.0 Total derivative assets $ 59.6 $ 59.6 Liabilities: Derivatives Cross currency swaps $ 65.4 $ 65.4 Interest-rate swaps 7.3 7.3 Foreign-exchange contracts 10.2 10.2 Total derivative liabilities $ 82.9 $ 82.9 At December 31, 2016 LEVEL 1 LEVEL 2 TOTAL Assets: Marketable debt securities U.S. tax-exempt $ 595.0 $ 595.0 U.S. corporate securities 47.8 47.8 U.S. government and agency securities $ 15.4 .6 16.0 Non-U.S. 308.0 308.0 Non-U.S. 98.2 98.2 Other debt securities 75.9 75.9 Total marketable debt securities $ 15.4 $ 1,125.5 $ 1,140.9 Derivatives Cross currency swaps $ 102.7 $ 102.7 Interest-rate swaps 7.0 7.0 Foreign-exchange contracts 8.7 8.7 Total derivative assets $ 118.4 $ 118.4 Liabilities: Derivatives Cross currency swaps $ 37.1 $ 37.1 Interest-rate swaps 9.3 9.3 Foreign-exchange contracts 2.9 2.9 Total derivative liabilities $ 49.3 $ 49.3 |
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: June 30, 2017 December 31, 2016 CARRYING FAIR CARRYING FAIR Assets: Financial Services fixed rate loans $ 3,534.7 $ 3,536.0 $ 3,607.4 $ 3,638.4 Liabilities: Financial Services fixed rate debt 5,032.2 5,038.3 4,915.2 4,929.3 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [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 Six Months Ended 2017 2016 2017 2016 Service cost $ 22.2 $ 22.6 $ 46.0 $ 44.5 Interest on projected benefit obligation 20.0 24.1 40.4 47.7 Expected return on assets (39.6 ) (36.1 ) (79.4 ) (71.7 ) Amortization of prior service costs .3 .3 .6 .6 Recognized actuarial loss 5.9 7.4 12.6 13.9 Net pension expense $ 8.8 $ 18.3 $ 20.2 $ 35.0 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jan. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Antidilutive options | 616,800 | 1,934,300 | 649,300 | 2,597,600 | |
Stock options | |||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Antidilutive options | 654,200 | ||||
Accounting Standards Update 2016-16 | |||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
New accounting pronouncement, cumulative effect of change on prepaid income taxes and retained earnings | $ (19.9) |
Dilutive and Antidilutive Optio
Dilutive and Antidilutive Options (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Additional shares | 933,300 | 704,800 | 1,013,700 | |
Antidilutive options | 616,800 | 1,934,300 | 649,300 | 2,597,600 |
Marketable Debt Securities (Det
Marketable Debt Securities (Detail) - Truck, Parts and Other - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | $ 1,242.9 | $ 1,141.9 | |
Unrealized Gains | 3.1 | 2.7 | |
Unrealized Losses | 1.4 | 3.7 | |
Fair Value | 1,244.6 | 1,140.9 | [1] |
U.S. tax-exempt securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 563.1 | 597.9 | |
Unrealized Gains | 1.3 | 0.2 | |
Unrealized Losses | 0.4 | 3.1 | |
Fair Value | 564 | 595 | |
U.S. corporate securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 58.8 | 47.6 | |
Unrealized Gains | 0.1 | 0.2 | |
Unrealized Losses | 0.1 | 0 | |
Fair Value | 58.8 | 47.8 | |
U.S. government and agency securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 15.6 | 16 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | 0 | 0 | |
Fair Value | 15.6 | 16 | |
Non-U.S. corporate securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 377.9 | 306.9 | |
Unrealized Gains | 1.2 | 1.5 | |
Unrealized Losses | 0.6 | 0.4 | |
Fair Value | 378.5 | 308 | |
Non-U.S. government securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 92.9 | 97.6 | |
Unrealized Gains | 0.3 | 0.6 | |
Unrealized Losses | 0.1 | 0 | |
Fair Value | 93.1 | 98.2 | |
Other debt securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 134.6 | 75.9 | |
Unrealized Gains | 0.2 | 0.2 | |
Unrealized Losses | 0.2 | 0.2 | |
Fair Value | $ 134.6 | $ 75.9 | |
[1] | The December 31, 2016 consolidated balance sheet has been derived from audited financial statements. |
Investments in Marketable Deb32
Investments in Marketable Debt Securities - Additional Information (Detail) - Truck, Parts and Other - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Gross realized gains from sales of marketable debt securities | $ 900,000 | $ 1,300,000 | |
Gross realized loss from sales of marketable debt securities | 300,000 | $ 100,000 | |
Other-than-temporary impairments recognized on investments | $ 0 | $ 0 |
Marketable Debt Securities Cont
Marketable Debt Securities Continuous Unrealized Losses (Detail) - Truck, Parts and Other - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 Months Fair Value | $ 450.3 | $ 615.5 |
Less than 12 Months Unrealized Losses | 1.4 | 3.7 |
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 | Jun. 30, 2017 | Dec. 31, 2016 | |
Amortized Cost Maturities: | |||
Within one year | $ 341.9 | ||
One to five years | 891.9 | ||
More than ten years | 9.1 | ||
Amortized Cost | 1,242.9 | $ 1,141.9 | |
Fair Value Maturities: | |||
Within one year | 342.1 | ||
One to five years | 893.4 | ||
More than ten years | 9.1 | ||
Fair Value | $ 1,244.6 | $ 1,140.9 | [1] |
[1] | The December 31, 2016 consolidated balance sheet has been derived from audited financial statements. |
Inventories Table (Detail)
Inventories Table (Detail) - Truck, Parts and Other - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 | |
Inventory [Line Items] | |||
Finished products | $ 518 | $ 452.3 | |
Work in process and raw materials | 539.3 | 444.7 | |
Inventory, Gross, Total | 1,057.3 | 897 | |
Less LIFO reserve | (172) | (169.2) | |
Inventories, net | $ 885.3 | $ 727.8 | [1] |
[1] | The December 31, 2016 consolidated balance sheet has been derived from audited financial statements. |
Inventories - Additional Inform
Inventories - Additional Information (Detail) | Jun. 30, 2017 |
Truck, Parts and Other | |
Inventory [Line Items] | |
Percentage of inventories valued using LIFO method of accounting | 46.00% |
Finance and Other Receivables37
Finance and Other Receivables (Detail) - Financial Services - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | $ 3,923.3 | $ 3,948.6 | ||||
Direct financing leases | 3,065 | 2,798 | ||||
Sales-type finance leases | 768.8 | 867.3 | ||||
Dealer wholesale financing | 1,764 | 1,528.5 | ||||
Operating lease receivables and other | 187.2 | 150.9 | ||||
Unearned interest: Finance leases | (360.4) | (344.7) | ||||
Finance and other receivables, net of deferred income | 9,347.9 | 8,948.6 | ||||
Less allowance for losses | (119) | (111.2) | $ (114.4) | $ (114.8) | ||
Finance and other receivables, net | 9,228.9 | 8,837.4 | [1] | |||
Loans And Leases | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Less allowance for losses | (103.9) | (97.1) | ||||
Dealer | Wholesale | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Less allowance for losses | (5.9) | (5.5) | (6.3) | (7.3) | ||
Other | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Less allowance for losses | [2] | $ (9.2) | $ (8.6) | $ (8.5) | $ (8.3) | |
[1] | The December 31, 2016 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 | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, recorded investment, 90 days past due and still accruing | $ 0 | $ 0 | |
Months contractual terms extended | 4 months | 4 months | |
Loans accounted for as troubled debt restructurings | $ 43.5 | $ 43.1 | |
Repossessed inventory | 26.6 | $ 25.4 | |
Proceeds from the sales of repossessed assets | $ 29.2 | $ 21.7 | |
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 | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Provision for losses | $ 12.7 | $ 9.4 | |||
Financial Services | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Beginning Balance | 111.2 | 114.8 | |||
Provision for losses | $ 6.8 | $ 6 | 12.7 | 9.4 | |
Charge-offs | (12) | (11.3) | |||
Recoveries | 2.3 | 1.4 | |||
Currency translation and other | 4.8 | 0.1 | |||
Ending Balance | 119 | 114.4 | 119 | 114.4 | |
Financial Services | Dealer | Wholesale | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Beginning Balance | 5.5 | 7.3 | |||
Provision for losses | 0 | (1.1) | |||
Charge-offs | 0 | 0 | |||
Recoveries | 0 | 0 | |||
Currency translation and other | 0.4 | 0.1 | |||
Ending Balance | 5.9 | 6.3 | 5.9 | 6.3 | |
Financial Services | Dealer | Retail | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Beginning Balance | 9.6 | 10.3 | |||
Provision for losses | (0.7) | (0.5) | |||
Charge-offs | 0 | 0 | |||
Recoveries | 0 | 0 | |||
Currency translation and other | 0.2 | 0.1 | |||
Ending Balance | 9.1 | 9.9 | 9.1 | 9.9 | |
Financial Services | Customer Retail | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Beginning Balance | 87.5 | 88.9 | |||
Provision for losses | 12.8 | 9.6 | |||
Charge-offs | (11.5) | (9.7) | |||
Recoveries | 2.2 | 1.3 | |||
Currency translation and other | 3.8 | (0.4) | |||
Ending Balance | 94.8 | 89.7 | 94.8 | 89.7 | |
Financial Services | Other | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Beginning Balance | [1] | 8.6 | 8.3 | ||
Provision for losses | [1] | 0.6 | 1.4 | ||
Charge-offs | [1] | (0.5) | (1.6) | ||
Recoveries | [1] | 0.1 | 0.1 | ||
Currency translation and other | [1] | 0.4 | 0.3 | ||
Ending Balance | [1] | $ 9.2 | $ 8.5 | $ 9.2 | $ 8.5 |
[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 | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Recorded investment for impaired finance receivables evaluated individually | $ 59.7 | $ 57.4 |
Allowance for impaired finance receivables determined individually | 8.2 | 5 |
Recorded investment for finance receivables evaluated collectively | 9,101 | 8,740.3 |
Allowance for finance receivables determined collectively | 101.6 | 97.6 |
Dealer | Wholesale | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Recorded investment for impaired finance receivables evaluated individually | 0.1 | 0.1 |
Allowance for impaired finance receivables determined individually | 0.1 | 0.1 |
Recorded investment for finance receivables evaluated collectively | 1,763.9 | 1,528.4 |
Allowance for finance receivables determined collectively | 5.8 | 5.4 |
Dealer | Retail | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Recorded investment for impaired finance receivables evaluated individually | 4 | 0 |
Allowance for impaired finance receivables determined individually | 0 | 0 |
Recorded investment for finance receivables evaluated collectively | 1,282 | 1,406 |
Allowance for finance receivables determined collectively | 9.1 | 9.6 |
Customer Retail | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Recorded investment for impaired finance receivables evaluated individually | 55.6 | 57.3 |
Allowance for impaired finance receivables determined individually | 8.1 | 4.9 |
Recorded investment for finance receivables evaluated collectively | 6,055.1 | 5,805.9 |
Allowance for finance receivables determined collectively | $ 86.7 | $ 82.6 |
Recorded Investment for Finance
Recorded Investment for Finance Receivables that are on Non-accrual Status (Detail) - Financial Services - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Recorded investment of finance receivables that are on non-accrual status | $ 53.9 | $ 56.5 |
Dealer | Wholesale | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Recorded investment of finance receivables that are on non-accrual status | 0.1 | 0.1 |
Customer Retail | Fleet | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Recorded investment of finance receivables that are on non-accrual status | 47.3 | 49.5 |
Customer Retail | Owner/Operator | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Recorded investment of finance receivables that are on non-accrual status | $ 6.5 | $ 6.9 |
Summary of Impaired Loans (Deta
Summary of Impaired Loans (Detail) - Financial Services - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2016 | |||
Financing Receivable, Impaired [Line Items] | ||||
Impaired loans with a specific reserve | $ 24.2 | $ 20.8 | ||
Associated allowance | (4.6) | (3.2) | ||
Net carrying amount of impaired loans with specific reserve | 19.6 | 17.6 | ||
Impaired loans with no specific reserve | 14.9 | 11 | ||
Net carrying amount of impaired loans | 34.5 | 28.6 | ||
Average recorded investment | 37.6 | [1] | 34.7 | [2] |
Dealer | Wholesale | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired loans with a specific reserve | 0.1 | 0.1 | ||
Associated allowance | (0.1) | (0.1) | ||
Net carrying amount of impaired loans with specific reserve | 0 | 0 | ||
Impaired loans with no specific reserve | 0 | 0 | ||
Net carrying amount of impaired loans | 0 | 0 | ||
Average recorded investment | 0.9 | [1] | 4.2 | [2] |
Dealer | Retail | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired loans with a specific reserve | 0 | 0 | ||
Associated allowance | 0 | 0 | ||
Net carrying amount of impaired loans with specific reserve | 0 | 0 | ||
Impaired loans with no specific reserve | 3.9 | 0 | ||
Net carrying amount of impaired loans | 3.9 | 0 | ||
Average recorded investment | 3.8 | [1] | 0 | [2] |
Customer Retail | Fleet | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired loans with a specific reserve | 22.4 | 18.9 | ||
Associated allowance | (4.1) | (2.8) | ||
Net carrying amount of impaired loans with specific reserve | 18.3 | 16.1 | ||
Impaired loans with no specific reserve | 10.8 | 10.8 | ||
Net carrying amount of impaired loans | 29.1 | 26.9 | ||
Average recorded investment | 30.7 | [1] | 28.1 | [2] |
Customer Retail | Owner/Operator | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired loans with a specific reserve | 1.7 | 1.8 | ||
Associated allowance | (0.4) | (0.3) | ||
Net carrying amount of impaired loans with specific reserve | 1.3 | 1.5 | ||
Impaired loans with no specific reserve | 0.2 | 0.2 | ||
Net carrying amount of impaired loans | 1.5 | 1.7 | ||
Average recorded investment | $ 2.2 | [1] | $ 2.4 | [2] |
[1] | Represents the average during the 12 months ended June 30, 2017. | |||
[2] | Represents the average during the 12 months ended June 30, 2016. |
Summary of Impaired Loans (Cash
Summary of Impaired Loans (Cash Basis Method) (Detail) - Financial Services - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Interest income recognized: | ||||
Interest income recognized on a cash basis | $ 0.3 | $ 0.4 | $ 0.6 | $ 0.8 |
Customer Retail | Fleet | ||||
Interest income recognized: | ||||
Interest income recognized on a cash basis | 0.3 | 0.3 | 0.6 | 0.6 |
Customer Retail | Owner/Operator | ||||
Interest income recognized: | ||||
Interest income recognized on a cash basis | $ 0 | $ 0.1 | $ 0 | $ 0.2 |
Finance Receivables by Credit Q
Finance Receivables by Credit Quality Indicator and Portfolio Class (Detail) - Financial Services - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | $ 9,160.7 | $ 8,797.7 |
Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 9,015.6 | 8,710.8 |
Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 85.4 | 29.5 |
At-risk | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 59.7 | 57.4 |
Dealer | Wholesale | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 1,764 | 1,528.5 |
Dealer | Wholesale | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 1,757.9 | 1,519.3 |
Dealer | Wholesale | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 6 | 9.1 |
Dealer | Wholesale | At-risk | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 0.1 | 0.1 |
Dealer | Retail | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 1,286 | 1,406 |
Dealer | Retail | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 1,282.1 | 1,406 |
Dealer | Retail | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 0 | 0 |
Dealer | Retail | At-risk | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 3.9 | 0 |
Customer Retail | Fleet | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 5,139.4 | 4,928.7 |
Customer Retail | Fleet | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 5,019.1 | 4,863.4 |
Customer Retail | Fleet | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 71.4 | 14.9 |
Customer Retail | Fleet | At-risk | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 48.9 | 50.4 |
Customer Retail | Owner/Operator | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 971.3 | 934.5 |
Customer Retail | Owner/Operator | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 956.5 | 922.1 |
Customer Retail | Owner/Operator | Watch | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | 8 | 5.5 |
Customer Retail | Owner/Operator | At-risk | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Financing Receivables | $ 6.8 | $ 6.9 |
Financing Receivables by Aging
Financing Receivables by Aging Category (Detail) - Financial Services - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, current and up to 30 days past due | $ 9,112.3 | $ 8,759.2 |
Financing Receivables | 9,160.7 | 8,797.7 |
31 - 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 26.8 | 16.5 |
Greater than 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 21.6 | 22 |
Dealer | Wholesale | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, current and up to 30 days past due | 1,763.1 | 1,528.4 |
Financing Receivables | 1,764 | 1,528.5 |
Dealer | Wholesale | 31 - 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 0.8 | 0 |
Dealer | Wholesale | Greater than 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 0.1 | 0.1 |
Dealer | Retail | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, current and up to 30 days past due | 1,286 | 1,406 |
Financing Receivables | 1,286 | 1,406 |
Dealer | Retail | 31 - 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 0 | 0 |
Dealer | Retail | Greater than 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 0 | 0 |
Customer Retail | Fleet | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, current and up to 30 days past due | 5,103.4 | 4,898.4 |
Financing Receivables | 5,139.4 | 4,928.7 |
Customer Retail | Fleet | 31 - 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 20.5 | 12.6 |
Customer Retail | Fleet | Greater than 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 15.5 | 17.7 |
Customer Retail | Owner/Operator | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, current and up to 30 days past due | 959.8 | 926.4 |
Financing Receivables | 971.3 | 934.5 |
Customer Retail | Owner/Operator | 31 - 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | 5.5 | 3.9 |
Customer Retail | Owner/Operator | Greater than 60 days past due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing receivables, past due | $ 6 | $ 4.2 |
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 | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Financing Receivable, Modifications [Line Items] | ||||
Pre-Modification Recorded Investment | $ 8 | $ 7.8 | $ 17 | $ 17.3 |
Post-Modification Recorded Investment | 8.1 | 7.8 | 17 | 17.2 |
Customer Retail | Fleet | ||||
Financing Receivable, Modifications [Line Items] | ||||
Pre-Modification Recorded Investment | 7.8 | 6.4 | 16.6 | 14 |
Post-Modification Recorded Investment | 7.8 | 6.4 | 16.6 | 13.9 |
Customer Retail | Owner/Operator | ||||
Financing Receivable, Modifications [Line Items] | ||||
Pre-Modification Recorded Investment | 0.2 | 1.4 | 0.4 | 3.3 |
Post-Modification Recorded Investment | $ 0.3 | $ 1.4 | $ 0.4 | $ 3.3 |
TDRs Modified During Previous T
TDRs Modified During Previous Twelve Months that Subsequently Defaulted (Detail) - Financial Services - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Financing Receivable, Modifications [Line Items] | ||
Recorded Investment, subsequently defaulted | $ 1.1 | $ 6.8 |
Customer Retail | Fleet | ||
Financing Receivable, Modifications [Line Items] | ||
Recorded Investment, subsequently defaulted | 1 | 6.7 |
Customer Retail | Owner/Operator | ||
Financing Receivable, Modifications [Line Items] | ||
Recorded Investment, subsequently defaulted | $ 0.1 | $ 0.1 |
Product Support Liabilities - A
Product Support Liabilities - Additional Information (Detail) - Truck, Parts and Other | 6 Months Ended |
Jun. 30, 2017 | |
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) - Truck, Parts and Other - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
WARRANTY RESERVES | ||
Beginning balance | $ 282.1 | $ 346.2 |
Cost accruals | 102.7 | 109.3 |
Payments | (121.6) | (128.8) |
Change in estimates for pre-existing warranties | 2.6 | (2.8) |
Currency translation | 8.6 | (4) |
Ending balance | 274.4 | 319.9 |
DEFERRED REVENUES ON EXTENDED WARRANTIES AND R&M CONTRACTS | ||
Beginning balance | 573.5 | 524.8 |
Deferred revenues | 176.7 | 192 |
Revenues recognized | (152.9) | (135.9) |
Currency translation | 22.8 | (7) |
Ending balance | $ 620.1 | $ 573.9 |
Components of Comprehensive Inc
Components of Comprehensive Income (Loss), Net of Related Tax (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 373 | $ 481.3 | $ 683.3 | $ (113.3) |
Other comprehensive income (loss) (OCI): | ||||
Unrealized gains (losses) on derivative contracts | 11.6 | 9.5 | (2) | 2.9 |
Unrealized gains on derivative contracts, tax | (3.1) | (2.6) | 0.9 | (0.5) |
Net current period OCI, unrealized (losses) gain on derivative contracts | 8.5 | 6.9 | (1.1) | 2.4 |
Unrealized (losses) gains on marketable debt securities | (0.5) | 2.6 | 2.9 | 5.8 |
Unrealized gains (losses)on marketable debt securities, tax | 0.1 | (0.8) | (1.2) | (1.8) |
Net current period OCI, unrealized (losses) gains on marketable debt securities | (0.4) | 1.8 | 1.7 | 4 |
Pension plans, before tax | (1.4) | 15.4 | 2.5 | 22.4 |
Pension plans, tax | 0 | (4.8) | (1.3) | (7.2) |
Net current period OCI, pension plans | (1.4) | 10.6 | 1.2 | 15.2 |
Foreign currency translation gains (losses) | 126.1 | (57.2) | 201.1 | 68.3 |
Net other comprehensive income (loss) | 132.8 | (37.9) | 202.9 | 89.9 |
Comprehensive income (loss) | $ 505.8 | $ 443.4 | $ 886.2 | $ (23.4) |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | [1] | $ 6,777.6 | |||
Recorded into AOCI | $ 91.9 | $ (33.8) | 121.2 | $ 52.8 | |
Reclassified out of AOCI | 40.9 | (4.1) | 81.7 | 37.1 | |
Net other comprehensive income (loss) | 132.8 | (37.9) | 202.9 | 89.9 | |
Ending balance | 7,500.5 | 7,500.5 | |||
Derivative Contracts | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (13.9) | (10.9) | (4.3) | (6.4) | |
Recorded into AOCI | (28.2) | 15.7 | (74.1) | (26) | |
Reclassified out of AOCI | 36.7 | (8.8) | 73 | 28.4 | |
Net other comprehensive income (loss) | 8.5 | 6.9 | (1.1) | 2.4 | |
Ending balance | (5.4) | (4) | (5.4) | (4) | |
Marketable Debt Securities | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | 1.8 | 4.3 | (0.3) | 2.1 | |
Recorded into AOCI | (0.3) | 2.1 | 2 | 4.8 | |
Reclassified out of AOCI | (0.1) | (0.3) | (0.3) | (0.8) | |
Net other comprehensive income (loss) | (0.4) | 1.8 | 1.7 | 4 | |
Ending balance | 1.4 | 6.1 | 1.4 | 6.1 | |
Pension Plans | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (411.5) | (385.8) | (414.1) | (390.4) | |
Recorded into AOCI | (5.7) | 5.6 | (7.8) | 5.7 | |
Reclassified out of AOCI | 4.3 | 5 | 9 | 9.5 | |
Net other comprehensive income (loss) | (1.4) | 10.6 | 1.2 | 15.2 | |
Ending balance | (412.9) | (375.2) | (412.9) | (375.2) | |
Foreign Currency Translation | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (634.4) | (496.8) | (709.4) | (622.3) | |
Recorded into AOCI | 126.1 | (57.2) | 201.1 | 68.3 | |
Reclassified out of AOCI | 0 | 0 | 0 | 0 | |
Net other comprehensive income (loss) | 126.1 | (57.2) | 201.1 | 68.3 | |
Ending balance | (508.3) | (554) | (508.3) | (554) | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME: | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (1,058) | (889.2) | (1,128.1) | (1,017) | |
Ending balance | $ (925.2) | $ (927.1) | $ (925.2) | $ (927.1) | |
[1] | The December 31, 2016 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 | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Investment income | $ (8.7) | $ (6.4) | $ (16.8) | $ (12.1) |
Income before income taxes | (539) | (646.2) | (987.2) | (216.6) |
Tax (benefit) expense | 166 | 164.9 | 303.9 | 329.9 |
Net Income (Loss) | (373) | (481.3) | (683.3) | 113.3 |
Total reclassifications out of AOCI | 40.9 | (4.1) | 81.7 | 37.1 |
Foreign-exchange contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Income before income taxes | 11.4 | (0.9) | 15.7 | (4) |
Interest-Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Income before income taxes | 40 | (7.6) | 85.8 | 50.3 |
Pension Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total reclassifications out of AOCI | 4.3 | 5 | 9 | 9.5 |
Pension Plans | Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Income before income taxes | 6.2 | 7.7 | 13.2 | 14.5 |
Tax (benefit) expense | (1.9) | (2.7) | (4.2) | (5) |
Net Income (Loss) | 4.3 | 5 | 9 | 9.5 |
Marketable Debt Securities | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total reclassifications out of AOCI | (0.1) | (0.3) | (0.3) | (0.8) |
Marketable Debt Securities | Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Investment income | (0.1) | (0.4) | (0.4) | (1.1) |
Tax (benefit) expense | 0.1 | 0.1 | 0.3 | |
Net Income (Loss) | (0.1) | (0.3) | (0.3) | (0.8) |
Derivative Contracts | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total reclassifications out of AOCI | 36.7 | (8.8) | 73 | 28.4 |
Derivative Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Income before income taxes | 51.4 | (8.5) | 101.5 | 46.3 |
Tax (benefit) expense | (14.7) | (0.3) | (28.5) | (17.9) |
Net Income (Loss) | 36.7 | (8.8) | 73 | 28.4 |
Truck, Parts and Other | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Net sales and revenues | (4,397.9) | (4,115.8) | (8,333.6) | (8,126.4) |
Cost of sales and revenues | 3,755.2 | 3,489.4 | 7,137.4 | 6,903 |
Interest and other expense (income), net | 1.5 | 2.5 | (0.1) | 2.6 |
Selling, general and administrative | 107.8 | 110.2 | 219.1 | 220.5 |
Income before income taxes | (467.3) | (562.5) | (850.1) | (46.9) |
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 | 0.3 | 0.3 | 0.5 | 0.5 |
Selling, general and administrative | 0.1 | 0.1 | ||
Income before income taxes | 0.6 | 0.6 | ||
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 | 2.7 | 3.5 | 6.1 | 6.9 |
Selling, general and administrative | 3 | 3.6 | 6.1 | 6.5 |
Income before income taxes | 5.7 | 7.1 | 12.2 | 13.4 |
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 | 12.1 | (1.7) | 16.3 | (6.5) |
Cost of sales and revenues | (1.3) | 0.6 | (1.2) | 0.6 |
Interest and other expense (income), net | 0.6 | 0.2 | 0.6 | 1.9 |
Truck, Parts and Other | Derivative Contracts | Interest-Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Net sales and revenues | 0 | 0 | 0 | 0 |
Cost of sales and revenues | 0 | 0 | 0 | 0 |
Interest and other expense (income), net | 0 | 0 | 0 | 0 |
Financial Services | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Selling, general and administrative | 26.3 | 25.1 | 51.5 | 49.6 |
Interest and other borrowing expenses | 37.4 | 32.6 | 71.5 | 62.9 |
Income before income taxes | (63) | (77.3) | (120.3) | (157.6) |
Financial Services | Actuarial loss | Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Selling, general and administrative | 0.2 | 0.3 | 0.4 | 0.5 |
Financial Services | Derivative Contracts | Foreign-exchange contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Interest and other borrowing expenses | 0 | 0 | 0 | 0 |
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 | $ 40 | $ (7.6) | $ 85.8 | $ 50.3 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Stock-based compensation expense | $ 1.9 | $ 1.9 | $ 9 | $ 9.1 |
Stock-based compensation expense realized tax benefits from the excess of deductible amounts over expense recognized | $ 0 | $ 0.1 | $ 0 | $ 0.2 |
Additional common shares issued under deferred and stock compensation arrangements | 558,148 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 30.80% | 25.50% | 30.80% | 152.30% |
European Commission charge | $ (109.6) | $ 0 | $ 833 |
Segment and Related Information
Segment and Related Information - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2017Segment | |
Segment Reporting [Abstract] | |
Reportable segments | 3 |
Segment Reporting Information b
Segment Reporting Information by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Segment Reporting Information [Line Items] | |||||
Net sales and revenues | $ 4,704.2 | $ 4,413.2 | $ 8,942.1 | $ 8,713.2 | |
Investment income | 8.7 | 6.4 | 16.8 | 12.1 | |
Income (loss) before income taxes | 539 | 646.2 | 987.2 | 216.6 | |
Depreciation and amortization | 269 | 252.9 | 528.2 | 495.4 | |
Truck, Parts and Other | |||||
Segment Reporting Information [Line Items] | |||||
Net sales and revenues | 4,397.9 | 4,115.8 | 8,333.6 | 8,126.4 | |
Income (loss) before income taxes | 467.3 | 562.5 | 850.1 | 46.9 | |
Depreciation and amortization | 117.2 | 118.1 | 230 | 233.2 | |
Truck, Parts and Other | Trucks | |||||
Segment Reporting Information [Line Items] | |||||
Net sales and revenues | 3,553.6 | 3,341.2 | 6,683.7 | 6,611.7 | |
Income (loss) before income taxes | 323.7 | 329.4 | 565.4 | 633.5 | |
Depreciation and amortization | 111 | 112.3 | 218.1 | 221.9 | |
Truck, Parts and Other | Trucks | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net sales and revenues | 3,768.9 | 3,598 | 7,066.2 | 7,070.4 | |
Truck, Parts and Other | Trucks | Intersegment | |||||
Segment Reporting Information [Line Items] | |||||
Net sales and revenues | (215.3) | (256.8) | (382.5) | (458.7) | |
Truck, Parts and Other | Parts | |||||
Segment Reporting Information [Line Items] | |||||
Net sales and revenues | 823.1 | 756.4 | 1,609.8 | 1,475.9 | |
Income (loss) before income taxes | 152.4 | 133.4 | 304.1 | 268 | |
Depreciation and amortization | 2 | 1.9 | 3.9 | 3.5 | |
Truck, Parts and Other | Parts | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net sales and revenues | 835.2 | 769.5 | 1,634.3 | 1,498.8 | |
Truck, Parts and Other | Parts | Intersegment | |||||
Segment Reporting Information [Line Items] | |||||
Net sales and revenues | (12.1) | (13.1) | (24.5) | (22.9) | |
Truck, Parts and Other | Other | |||||
Segment Reporting Information [Line Items] | |||||
Net sales and revenues | 21.2 | 18.2 | 40.1 | 38.8 | |
Income (loss) before income taxes | [1] | (8.8) | 99.7 | (19.4) | (854.6) |
Depreciation and amortization | 4.2 | 3.9 | 8 | 7.8 | |
Financial Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 306.3 | 297.4 | 608.5 | 586.8 | |
Income (loss) before income taxes | 63 | 77.3 | 120.3 | 157.6 | |
Depreciation and amortization | $ 151.8 | $ 134.8 | $ 298.2 | $ 262.2 | |
[1] | Other includes a favorable adjustment to the European Commission charge of $109.6 in the second quarter of 2016 and an expense of $833.0 for the first half of 2016. |
Segment Reporting Information57
Segment Reporting Information by Segment (Parenthetical) (Detail) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2016EUR (€) | Mar. 31, 2016USD ($) | Mar. 31, 2016EUR (€) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||||||
European Commission charge | $ (109.6) | $ 0 | $ 833 | ||||
Truck, Parts and Other | |||||||
Segment Reporting Information [Line Items] | |||||||
European Commission charge | $ 0 | $ (109.6) | € (97.3) | $ 942.6 | € 850 | $ 0 | $ 833 |
Derivative Financial Instrume58
Derivative Financial Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative assets | $ 59,600,000 | $ 59,600,000 | $ 118,400,000 | ||
Designated under hedge accounting | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative assets | 57,900,000 | $ 57,900,000 | 113,600,000 | ||
Cash Flow Hedging | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Maximum length of future cash flow hedges | 4 years 1 month 6 days | ||||
Recognized gain and losses 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 | $ 2,700,000 | ||||
Gain (losses) reclassified out of AOCI into net income based on the probability that the original forecasted transaction would not occur | 0 | $ 300,000 | 0 | $ (300,000) | |
Interest-Rate Contracts | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount of outstanding contracts | 2,688,500,000 | 2,688,500,000 | |||
Notional maturities for interest-rate contracts 2017 | 283,300,000 | 283,300,000 | |||
Notional maturities for interest-rate contracts 2018 | 972,100,000 | 972,100,000 | |||
Notional maturities for interest-rate contracts 2019 | 854,100,000 | 854,100,000 | |||
Notional maturities for interest-rate contracts 2020 | 375,600,000 | 375,600,000 | |||
Notional maturities for interest-rate contracts 2021 | 203,400,000 | 203,400,000 | |||
Notional maturities for interest-rate contracts thereafter | 0 | 0 | |||
Interest-Rate Contracts | Financial Services | Designated under hedge accounting | Other Assets | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative assets | 55,600,000 | 55,600,000 | $ 109,700,000 | ||
Foreign-exchange contracts | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative notional amount outstanding | $ 487,500,000 | $ 487,500,000 | |||
Foreign-exchange contracts maturity period | Within one year |
Balance Sheet Classifications,
Balance Sheet Classifications, Fair Value, Gross and Pro Forma Net Amounts of Derivative Financial Instruments (Detail) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
Derivative assets | $ 59.6 | $ 118.4 |
Pro forma net amount | 50.8 | 101.9 |
LIABILITIES | ||
Derivative liabilities | 82.9 | 49.3 |
Pro forma net amount | 74.1 | 32.8 |
Interest-Rate Contracts | Financial Services | ||
ASSETS | ||
Less amounts not offset in financial instruments | (7.8) | (15.4) |
LIABILITIES | ||
Less amounts not offset in financial instruments | (7.8) | (15.4) |
Foreign-exchange contracts | Financial Services | ||
ASSETS | ||
Less amounts not offset in financial instruments | (0.8) | (0.1) |
LIABILITIES | ||
Less amounts not offset in financial instruments | (0.8) | (0.1) |
Foreign-exchange contracts | Truck, Parts and Other | ||
ASSETS | ||
Less amounts not offset in financial instruments | (0.2) | (1) |
LIABILITIES | ||
Less amounts not offset in financial instruments | (0.2) | (1) |
Designated under hedge accounting | ||
ASSETS | ||
Derivative assets | 57.9 | 113.6 |
LIABILITIES | ||
Derivative liabilities | 78.7 | 48.2 |
Designated under hedge accounting | Interest-Rate Contracts | Financial Services | Deferred Taxes And Other Liabilities | ||
LIABILITIES | ||
Derivative liabilities | 72.7 | 46.3 |
Designated under hedge accounting | Interest-Rate Contracts | Financial Services | Other Assets | ||
ASSETS | ||
Derivative assets | 55.6 | 109.7 |
Designated under hedge accounting | Foreign-exchange contracts | Truck, Parts and Other | Accounts payable, accrued expenses and other | ||
LIABILITIES | ||
Derivative liabilities | 6 | 1.9 |
Designated under hedge accounting | Foreign-exchange contracts | Truck, Parts and Other | Other current assets | ||
ASSETS | ||
Derivative assets | 2.3 | 3.9 |
Economic hedge | ||
ASSETS | ||
Derivative assets | 1.7 | 4.8 |
LIABILITIES | ||
Derivative liabilities | 4.2 | 1.1 |
Economic hedge | Interest-Rate Contracts | Financial Services | Deferred Taxes And Other Liabilities | ||
LIABILITIES | ||
Derivative liabilities | 0 | 0.1 |
Economic hedge | Foreign-exchange contracts | Financial Services | Deferred Taxes And Other Liabilities | ||
LIABILITIES | ||
Derivative liabilities | 3.5 | 0.7 |
Economic hedge | Foreign-exchange contracts | Financial Services | Other Assets | ||
ASSETS | ||
Derivative assets | 0.6 | 4 |
Economic hedge | Foreign-exchange contracts | Truck, Parts and Other | Accounts payable, accrued expenses and other | ||
LIABILITIES | ||
Derivative liabilities | 0.7 | 0.3 |
Economic hedge | Foreign-exchange contracts | Truck, Parts and Other | Other current assets | ||
ASSETS | ||
Derivative assets | $ 1.1 | $ 0.8 |
(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 | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative [Line Items] | ||||
Interest-rate swaps | $ (0.7) | $ (3) | $ 0.6 | $ (5) |
Term notes | $ 0.9 | $ 2.8 | $ (0.4) | $ 4.4 |
Pre-Tax Effects of Derivative I
Pre-Tax Effects of Derivative Instruments Recognized in OCI (Detail) - Derivative Contracts - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Interest-Rate Contracts | ||||
Derivative [Line Items] | ||||
Gain (loss) recognized in OCI | $ (38.1) | $ 8.4 | $ (83.1) | $ (53.3) |
Interest-Rate Contracts | Truck, Parts and Other | ||||
Derivative [Line Items] | ||||
Gain (loss) recognized in OCI | 0 | 0 | 0 | 0 |
Interest-Rate Contracts | Financial Services | ||||
Derivative [Line Items] | ||||
Gain (loss) recognized in OCI | (38.1) | 8.4 | (83.1) | (53.3) |
Foreign-exchange contracts | ||||
Derivative [Line Items] | ||||
Gain (loss) recognized in OCI | (1.7) | 9.6 | (20.4) | 9.9 |
Foreign-exchange contracts | Truck, Parts and Other | ||||
Derivative [Line Items] | ||||
Gain (loss) recognized in OCI | (1.7) | 9.6 | (20.4) | 9.9 |
Foreign-exchange contracts | Financial Services | ||||
Derivative [Line Items] | ||||
Gain (loss) recognized in OCI | $ 0 | $ 0 | $ 0 | $ 0 |
Expense (Income) Reclassified o
Expense (Income) Reclassified out of AOCI into Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative [Line Items] | ||||
Income before income taxes | $ (539) | $ (646.2) | $ (987.2) | $ (216.6) |
Derivative Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Derivative [Line Items] | ||||
Income before income taxes | 51.4 | (8.5) | 101.5 | 46.3 |
Truck, Parts and Other | ||||
Derivative [Line Items] | ||||
Net sales and revenues | (4,397.9) | (4,115.8) | (8,333.6) | (8,126.4) |
Cost of sales and revenues | 3,755.2 | 3,489.4 | 7,137.4 | 6,903 |
Interest and other expense (income), net | 1.5 | 2.5 | (0.1) | 2.6 |
Income before income taxes | (467.3) | (562.5) | (850.1) | (46.9) |
Financial Services | ||||
Derivative [Line Items] | ||||
Interest and other borrowing expenses | 37.4 | 32.6 | 71.5 | 62.9 |
Income before income taxes | (63) | (77.3) | (120.3) | (157.6) |
Interest-Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Derivative [Line Items] | ||||
Income before income taxes | 40 | (7.6) | 85.8 | 50.3 |
Interest-Rate Contracts | Truck, Parts and Other | Derivative Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Derivative [Line Items] | ||||
Net sales and revenues | 0 | 0 | 0 | 0 |
Cost of sales and revenues | 0 | 0 | 0 | 0 |
Interest and other expense (income), net | 0 | 0 | 0 | 0 |
Interest-Rate Contracts | Financial Services | Derivative Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Derivative [Line Items] | ||||
Interest and other borrowing expenses | 40 | (7.6) | 85.8 | 50.3 |
Foreign-exchange contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Derivative [Line Items] | ||||
Income before income taxes | 11.4 | (0.9) | 15.7 | (4) |
Foreign-exchange contracts | Truck, Parts and Other | Derivative Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Derivative [Line Items] | ||||
Net sales and revenues | 12.1 | (1.7) | 16.3 | (6.5) |
Cost of sales and revenues | (1.3) | 0.6 | (1.2) | 0.6 |
Interest and other expense (income), net | 0.6 | 0.2 | 0.6 | 1.9 |
Foreign-exchange contracts | Financial Services | Derivative Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Derivative [Line Items] | ||||
Interest and other borrowing expenses | $ 0 | $ 0 | $ 0 | $ 0 |
Expense (Income) Recognized in
Expense (Income) Recognized in Earnings Related to Foreign-Exchange Contracts (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Foreign-exchange contracts | ||||
Derivative [Line Items] | ||||
(Income) Expense recognized in earnings | $ 9.9 | $ (9.1) | $ 36.4 | $ (7.9) |
Foreign-exchange contracts | Truck, Parts and Other | Cost of sales and revenues | ||||
Derivative [Line Items] | ||||
(Income) Expense recognized in earnings | 0.1 | 0.1 | 0.7 | 1.1 |
Foreign-exchange contracts | Truck, Parts and Other | Interest and other (income) expense, net | ||||
Derivative [Line Items] | ||||
(Income) Expense recognized in earnings | 0.7 | 0.9 | 4.2 | 0.8 |
Foreign-exchange contracts | Financial Services | Interest and other borrowing expenses | ||||
Derivative [Line Items] | ||||
(Income) Expense recognized in earnings | 11.4 | (10.6) | 44.6 | (8.2) |
Foreign-exchange contracts | Financial Services | Selling, general and administrative | ||||
Derivative [Line Items] | ||||
(Income) Expense recognized in earnings | (2.3) | 0.5 | (13.1) | (1.6) |
Interest-Rate Contracts | ||||
Derivative [Line Items] | ||||
(Income) Expense recognized in earnings | (0.1) | 0 | (0.1) | 0 |
Interest-Rate Contracts | Truck, Parts and Other | Cost of sales and revenues | ||||
Derivative [Line Items] | ||||
(Income) Expense recognized in earnings | 0 | 0 | 0 | 0 |
Interest-Rate Contracts | Truck, Parts and Other | Interest and other (income) expense, net | ||||
Derivative [Line Items] | ||||
(Income) Expense recognized in earnings | 0 | 0 | 0 | 0 |
Interest-Rate Contracts | Financial Services | Interest and other borrowing expenses | ||||
Derivative [Line Items] | ||||
(Income) Expense recognized in earnings | (0.1) | 0 | (0.1) | 0 |
Interest-Rate Contracts | Financial Services | Selling, general and administrative | ||||
Derivative [Line Items] | ||||
(Income) Expense recognized in earnings | $ 0 | $ 0 | $ 0 | $ 0 |
Financial Assets and Liabilitie
Financial Assets and Liabilities Subject to Recurring Fair Value Measurements (Detail) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 59.6 | $ 118.4 |
Derivative liabilities | 82.9 | 49.3 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 1,244.6 | 1,140.9 |
Derivative assets | 59.6 | 118.4 |
Derivative liabilities | 82.9 | 49.3 |
Fair Value, Measurements, Recurring | Cross currency swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 50.7 | 102.7 |
Derivative liabilities | 65.4 | 37.1 |
Fair Value, Measurements, Recurring | Interest-rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 4.9 | 7 |
Derivative liabilities | 7.3 | 9.3 |
Fair Value, Measurements, Recurring | Foreign-exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 4 | 8.7 |
Derivative liabilities | 10.2 | 2.9 |
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 | 564 | 595 |
Fair Value, Measurements, Recurring | U.S. corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 58.8 | 47.8 |
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 | 15.6 | 16 |
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 | 378.5 | 308 |
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 | 93.1 | 98.2 |
Fair Value, Measurements, Recurring | Other debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 134.6 | 75.9 |
Level 1 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 15.1 | 15.4 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Cross currency swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Interest-rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Foreign-exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 1 | 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 | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | U.S. corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 0 | 0 |
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 | 15.1 | 15.4 |
Level 1 | 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 | 0 | 0 |
Level 1 | 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 | 0 | 0 |
Level 1 | Fair Value, Measurements, Recurring | Other debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 0 | 0 |
Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable debt securities | 1,229.5 | 1,125.5 |
Derivative assets | 59.6 | 118.4 |
Derivative liabilities | 82.9 | 49.3 |
Level 2 | Fair Value, Measurements, Recurring | Cross currency swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 50.7 | 102.7 |
Derivative liabilities | 65.4 | 37.1 |
Level 2 | Fair Value, Measurements, Recurring | Interest-rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 4.9 | 7 |
Derivative liabilities | 7.3 | 9.3 |
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 | 8.7 |
Derivative liabilities | 10.2 | 2.9 |
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 | 564 | 595 |
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 | 58.8 | 47.8 |
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 | 0.5 | 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 | 378.5 | 308 |
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 | 93.1 | 98.2 |
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 | $ 134.6 | $ 75.9 |
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 | Jun. 30, 2017 | Dec. 31, 2016 |
Assets, carrying amount | ||
Fixed-rate loans | $ 3,534.7 | $ 3,607.4 |
Liabilities, carrying amount | ||
Fixed-rate debt | 5,032.2 | 4,915.2 |
Assets, Fair Value | ||
Fixed-rate loans | 3,536 | 3,638.4 |
Liabilities, Fair Value | ||
Fixed-rate debt | $ 5,038.3 | $ 4,929.3 |
Components of Pension Expense (
Components of Pension Expense (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Postemployment Benefits [Abstract] | ||||
Service cost | $ 22.2 | $ 22.6 | $ 46 | $ 44.5 |
Interest on projected benefit obligation | 20 | 24.1 | 40.4 | 47.7 |
Expected return on assets | (39.6) | (36.1) | (79.4) | (71.7) |
Amortization of prior service costs | 0.3 | 0.3 | 0.6 | 0.6 |
Recognized actuarial loss | 5.9 | 7.4 | 12.6 | 13.9 |
Net pension expense | $ 8.8 | $ 18.3 | $ 20.2 | $ 35 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - Defined Benefit Pension Plans - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Estimated Decrease in Pension Expense for 2017 due to change of method used to estimate service cost and interest cost components of pension expense from a single weighted-average method to an individual spot rate approach | $ 15 | $ 15 | ||
Contribution to pension plans | $ 5.5 | $ 54.2 | $ 10.4 | $ 59.3 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) € in Millions, $ in Millions | Jul. 19, 2016USD ($) | Jul. 19, 2016EUR (€) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2016EUR (€) | Mar. 31, 2016USD ($) | Mar. 31, 2016EUR (€) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Line Items] | |||||||||
European Commission charge | $ (109.6) | $ 0 | $ 833 | ||||||
Truck, Parts and Other | |||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||
European Commission charge | $ 0 | $ (109.6) | € (97.3) | $ 942.6 | € 850 | $ 0 | $ 833 | ||
Litigation settlement amount | $ 833 | € 752.7 |