**UNITED STATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-Q**

** **

**ý  QuarterlyReport Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

** **

**For the quarterly period ended March 31, 2005**

** **

**or**

** **

**o  TransitionReport Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

** **

**For transition period from                           to                           **

** **

**Commission File No. 0-12553**

 

 

**PACCAR FINANCIAL CORP.**

(Exact name of registrant as specified in its charter)

 

 

| **Washington**                               | ** ** | **91-6029712**                        |
|----------------------------------------------|------------|---------------------------------------|
| (State  or other jurisdiction of             |       | (I.R.S.  Employer Identification No.) |
| incorporation  or organization)              |       |                                  |
|                                         |       |                                  |
|                                         |       |                                  |
| **777 – 106th Ave. N.E., Bellevue, WA** | ** ** | **98004**                             |
| (Address  of principal executive offices)    |       | (Zip  code)                           |

 

**(425) 468-7100**

(Registrant’stelephone number, including area code)

 

 

Indicate by check mark whether theregistrant: (1) has filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90 days.   Yes ý  No o

 

Indicateby check mark whether the registrant is an accelerated filer (as defined inRule 12b-2 of the Exchange Act). Yes o  No  ý

 

Indicate the numberof shares outstanding of each of the issuer’s classes of common stock, as ofthe latest practicable date:

 

**CommonStock, $100 par value—145,000 shares as of April 30, 2005**

 

THEREGISTRANT IS A WHOLLY-OWNED INDIRECT SUBSIDIARY OF PACCAR INC AND MEETS THECONDITIONS SET FORTH IN GENERAL INSTRUCTIONS (H)(1)(a)AND (b) OF FORM 10-Q AND IS, THEREFORE, FILINGTHIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

 

 

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**FORM10-QPACAR FINANCIAL CORP.**

 

**INDEX**

 
|                            |     |                                              |                                                                                             |   |   |
|---------------------------------|----------|---------------------------------------------------|--------------------------------------------------------------------------------------------------|--------|--------|
|                            |     |                                              |                                                                                             |   |   |
| PART I. FINANCIAL  INFORMATION: |     |
|                            |     |                                              |                                                                                             |   |   |
|                            | ITEM 1.  |                                              | FINANCIAL STATEMENTS:                                                                            |   |
|                            |     |                                              |                                                                                             |   |   |
|                            |     | Statements  of Income and Retained Earnings— |                                                                                             |
|                            |     |                                              | Three  Months Ended March 31, 2005 and 2004 (Unaudited)                                          |   |
|                            |     |                                              |                                                                                             |   |   |
|                            |     | Balance  Sheets—                             |                                                                                             |
|                            |     |                                              | March 31,  2005 (Unaudited), and December 31, 2004                                               |   |
|                            |     |                                              |                                                                                             |   |   |
|                            |     | Statements of Cash  Flows—                   |                                                                                             |
|                            |     |                                              | Three Months Ended  March 31, 2005 and 2004 (Unaudited)                                          |   |
|                            |     |                                              |                                                                                             |   |   |
|                            |     | Notes to Financial  Statements (Unaudited)        |                                                                                             |
|                            |     |                                              |                                                                                             |   |   |
|                            | ITEM  2. |                                              | MANAGEMENT’S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |   |
|                            |     |                                              |                                                                                             |   |   |
|                            | ITEM 3.  |                                              | QUANTITATIVE AND  QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                      |   |
|                            |     |                                              |                                                                                             |   |   |
|                            | ITEM 4.  |                                              | CONTROLS AND PROCEDURES                                                                          |   |
|                            |     |                                              |                                                                                             |   |   |
| PART II. OTHER  INFORMATION:    |     |
|                            |     |                                              |                                                                                             |   |   |
|                            | ITEM 6.  |                                              | EXHIBITS                                                                                         |   |
|                            |     |                                              |                                                                                             |   |   |
| SIGNATURES                      |     |                                              |
|                            |     |                                              |                                                                                             |   |   |
| INDEX  TO EXHIBITS              |     |
|                                 |          |                                                   |                                                                                                  |        |        |  |

 

2

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**PARTI****— FINANCIAL INFORMATION**

** **

**ITEM 1.  FINANCIAL STATEMENTS**

 

##### **Statements of Income and Retained Earnings(Unaudited)**

(Millions of Dollars)

 
| **Three Months Ended March 31**                             | ** ** | **2005**   | ** ** | **2004**   | ** ** |
|-------------------------------------------------------------|------------|------------|------------|------------|------------|
| ** **                                                  | ** ** | ** ** | ** ** | ** ** | ** ** |
| Interest and fee income                                     | ** ** | **$**      | **55.0**   |       | $          | 47.4 |   |
| Operating lease and rental  income                          | ** ** | **27.0**   |       | 18.3       |       |
| Insurance premiums and  other revenue                       | ** ** | **9.1**    |       | 6.3        |       |
| **TOTAL INTEREST AND OTHER  REVENUE**                       | ** ** | **91.1**   |       | 72.0       |       |
|                                                        |       |       |       |       |       |
| Interest and other  borrowing expenses                      | ** ** | **21.3**   |       | 16.8       |       |
| Depreciation and other  operating lease and rental expenses | ** ** | **22.6**   |       | 15.1       |       |
| Insurance claims and other  expenses                        | ** ** | **4.6**    |       | 4.1        |       |
| Selling, general and  administrative expenses               | ** ** | **11.9**   |       | 11.1       |       |
| Provision for losses on  receivables                        | ** ** | **1.1**    |       | .5         |       |
| **TOTAL EXPENSES**                                          | ** ** | **61.5**   |       | 47.6       |       |
|                                                        |       |       |       |       |       |
| **INCOME BEFORE INCOME TAXES**                              | ** ** | **29.6**   |       | 24.4       |       |
|                                                        |       |       |       |       |       |
| **Income taxes**                                            | ** ** | **11.3**   |       | 9.3        |       |
|                                                        |       |       |       |       |       |
| **NET INCOME**                                              | ** ** | **18.3**   |       | 15.1       |       |
| **RETAINED EARNINGS AT BEGINNING  OF PERIOD**               | ** ** | **473.5**  |       | 473.3      |       |
| Cash dividends paid                                         | ** ** | **—** |       | 69.0       |       |
| **RETAINED EARNINGS AT END OF  PERIOD**                     | ** ** | **$**      | **491.8**  |       | $          | 419.4 |   |

 

Earnings per share and dividends per share are not reported because theCompany is a wholly-owned subsidiary of PACCAR Financial Services Corporation.

 

See Notes to Financial Statements.

 

3

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| **Balance Sheets**                                                                                                                              | ** ** | **March 31**    | ** **  | **December 31** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------|-------------|-----------------|------------|
| (Millions of  Dollars)                                                                                                                          | ** ** | **2005**        | ** **  | **2004***       | ** ** |
| ** **                                                                                                                                      | ** ** | **(Unaudited)** | ** **  | ** **      | ** ** |
| **ASSETS**                                                                                                                                      | ** ** | ** **      | ** **  | ** **      | ** ** |
| ** **                                                                                                                                      | ** ** | ** **      | ** **  | ** **      | ** ** |
| Cash                                                                                                                                            | ** ** | **$**           | **16.1**    |            | $          | 18.2 |   |
| Finance and other receivables, net of allowance for losses   (2005 - $67.8 and 2004 - $67.1)                                                    |       | **3,501.4**     |        | 3,423.8         |       |
| Loans to PACCAR Inc and affiliates                                                                                                              | ** ** | **135.3**       |        | 129.1           |       |
| Equipment on operating leases, net of depreciation   (2005 - $85.3 and 2004 - $73.4)                                                            | ** ** | **344.5**       |        | 357.8           |       |
| Other assets                                                                                                                                    | ** ** | **77.9**        |        | 41.8            |       |
|                                                                                                                                            |       |            |        |            |       |
| **TOTAL ASSETS**                                                                                                                                | ** ** | **$**           | **4,075.2** |            | $          | 3,970.7 |   |
|                                                                                                                                            |       |            |        |            |       |
| **LIABILITIES**                                                                                                                                 |       |            |        |            |       |
|                                                                                                                                            |       |            |        |            |       |
| Accounts payable, accrued expenses and other                                                                                                    | ** ** | **$**           | **140.8**   |            | $          | 133.3 |   |
| Commercial paper                                                                                                                                | ** ** | **1,072.7**     |        | 1,050.8         |       |
| Medium-term notes                                                                                                                               | ** ** | **1,840.0**     |        | 1,830.0         |       |
| Income taxes — current and deferred                                                                                                        | ** ** | **310.6**       |        | 281.5           |       |
|                                                                                                                                            |       |            |        |            |       |
| **TOTAL LIABILITIES**                                                                                                                           | ** ** | **$**           | **3,364.1** |            | $          | 3,295.6 |   |
|                                                                                                                                            |       |            |        |            |       |
| **STOCKHOLDER’S EQUITY**                                                                                                                   | ** ** | ** **      | ** **  | ** **      | ** ** |
|                                                                                                                                            |       |            |        |            |       |
| Preferred stock, par value $100 per share,   6% noncumulative and nonvoting, 450,000 shares authorized,   310,000 shares issued and outstanding |       | **$**           | **31.0**    |            | $          | 31.0 |   |
| Common stock, par value $100 per share,   200,000 shares authorized, 145,000 shares issued and outstanding                                      |       | **14.5**        |        | 14.5            |       |
| Additional paid-in capital                                                                                                                      | ** ** | **157.7**       |        | 150.7           |       |
| Retained earnings                                                                                                                               | ** ** | **491.8**       |        | 473.5           |       |
| Accumulated other comprehensive income                                                                                                          | ** ** | **16.1**        |        | 5.4             |       |
|                                                                                                                                            |       |            |        |            |       |
| **TOTAL STOCKHOLDER’S EQUITY**                                                                                                             | ** ** | **711.1**       |        | 675.1           |       |
|                                                                                                                                            |       |            |        |            |       |
| **TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY**                                                                                             | ** ** | **$**           | **4,075.2** |            | $          | 3,970.7 |   |

 

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*The December 31, 2004 balance sheet has been derived from auditedfinancial statements.

 

See Notes to Financial Statements.

 

4

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##### **Statements of Cash Flows (Unaudited)**

(Millions of Dollars)

 
| **Three Months Ended March 31**                                          | ** ** | **2005**   | ** ** | **2004**   | ** ** |
|--------------------------------------------------------------------------|------------|------------|------------|------------|------------|
| ** **                                                               | ** ** | ** ** | ** ** | ** ** | ** ** |
| **OPERATING ACTIVITIES**                                                 |       |       | ** ** |       |       |
|                                                                     |       |       | ** ** |       |       |
| Net income                                                               | ** ** | **$**      | **18.3**   | ** ** | $          | 15.1 |   |
| Items included in net income not affecting cash:                         |       |       | ** ** |       |       |
| Depreciation and amortization                                            | ** ** | **17.3**   | ** ** | 10.9       |       |
| Benefit for deferred taxes                                               | ** ** | **(9.1**   | **)**      | (11.8      | )          |
| Provision for losses on receivables                                      | ** ** | **1.1**    | ** ** | .5         |       |
| Increase in payables and other                                           | ** ** | **8.7**    | ** ** | 7.5        |       |
|                                                                     |       |       | ** ** |       |       |
| **NET CASH PROVIDED BY OPERATING ACTIVITIES**                            | ** ** | **36.3**   | ** ** | 22.2       |       |
|                                                                     |       |       | ** ** |       |       |
| **INVESTING ACTIVITIES**                                                 |       |       | ** ** |       |       |
|                                                                     |       |       | ** ** |       |       |
| Finance and other receivables originated                                 | ** ** | **(358.0** | **)**      | (304.9     | )          |
| Collections on finance and other receivables                             | ** ** | **325.6**  | ** ** | 323.9      |       |
| Net increase in wholesale receivables                                    | ** ** | **(34.1**  | **)**      | (2.6       | )          |
| Net (increase) decrease in loans to PACCAR Inc and affiliates            | ** ** | **(6.2**   | **)**      | 50.4       |       |
| Acquisition of equipment on operating leases, primarily from PACCAR  Inc |       | **(9.2**   | **)**      | (8.9       | )          |
| Proceeds from disposal of equipment                                      | ** ** | **5.5**    | ** ** | 3.7        |       |
| Acquisition of equipment                                                 |       | —     | ** ** | (.1        | )          |
|                                                                     |       |       | ** ** |       |       |
| **NET CASH (USED IN) PROVIDED BY INVESTING  ACTIVITIES**                 | ** ** | **(76.4**  | **)**      | 61.5       |       |
|                                                                     |       |       | ** ** |       |       |
| **FINANCING ACTIVITIES**                                                 | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                               | ** ** | ** ** | ** ** | ** ** | ** ** |
| Net increase (decrease) in commercial paper                              | ** ** | **21.9**   | ** ** | (112.0     | )          |
| Proceeds from medium-term notes                                          | ** ** | **200.0**  | ** ** | 250.0      |       |
| Payments of medium-term notes                                            | ** ** | **(190.0** | **)**      | (150.0     | )          |
| Dividends paid                                                           |       | —     | ** ** | (69.0      | )          |
| Payment of advances (to) from PACCAR Inc                                 | ** ** | **(.9**    | **)**      | .9         |       |
| Capital contributions                                                    | ** ** | **7.0**    | ** ** | 6.9        |       |
|                                                                     |       |       | ** ** |       |       |
| **NET CASH PROVIDED BY (USED IN) FINANCING  ACTIVITIES**                 | ** ** | **38.0**   | ** ** | (73.2      | )          |
|                                                                     |       |       | ** ** |       |       |
| **NET (DECREASE) INCREASE IN CASH**                                      | ** ** | **(2.1**   | **)**      | 10.5       |       |
|                                                                     |       |       | ** ** |       |       |
| **CASH AT BEGINNING OF PERIOD**                                          | ** ** | **18.2**   | ** ** | 5.5        |       |
|                                                                     |       |       | ** ** |       |       |
| **CASH AT END OF PERIOD**                                                | ** ** | **$**      | **16.1**   | ** ** | $          | 16.0 |   |

 

See Notes to Financial Statements.

 

5

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| **Notes  to Financial Statements** | ** ** | **(Millions of Dollars)** |
|------------------------------------|------------|---------------------------|

##### ** **

 

**NOTE A —Basis of Presentation**

 

The accompanying unaudited financial statements have beenprepared in accordance with the instructions to Form 10-Q and Article 10 ofRegulation S-X. Accordingly, they do not include all of the information andfootnotes required by generally accepted accounting principles for completefinancial statements. However, in the opinion of management, all adjustments(consisting of normal recurring accruals) considered necessary for a fairpresentation have been included. For further information, refer to thefinancial statements and footnotes included in PACCAR Financial Corp.’s (the “Company”)Annual Report on Form 10-K for the year ended December 31, 2004.

 

*Reclassifications*: Certain prior yearamounts have been reclassified to conform to the 2005 presentation.

 

 

**NOTE B —Transactions with PACCAR Inc and Affiliates**

 

The Company and PACCAR Inc (“PACCAR”) are parties to aSupport Agreement that obligates PACCAR to provide, when required, financialassistance to the Company to ensure that the Company maintains a ratio of netearnings available for fixed charges to fixed charges (as defined) of at least1.25 to 1 for any fiscal year. The required ratio for the three months endedMarch 31, 2005 and full year 2004 was met without assistance. The Companydetermines the amount of PACCAR assistance, if any, at the end of each fiscalyear. The Support Agreement also requires PACCAR to own, directly orindirectly, all outstanding voting stock of the Company.

 

PACCAR Financial Services Corporation (“PFSC”) chargesthe Company for certain administrative services it provides and certainservices the Company receives indirectly from PACCAR. The costs are charged tothe Company based upon the Company’s specific use of the services at PFSC’s orPACCAR’s cost. Management considers these charges similar to the costs thatwould be incurred if the Company were on a stand-alone basis. PFSC recognizescertain of these administrative services as an additional investment in theCompany. The Company records the investment as additional paid-in capital.There were no cash dividends declared or paid during the first quarter2005.  A cash dividend in the amount of$69.0 was declared and paid during the first quarter 2004.

 

The Company’s principal office is located in the corporateheadquarters building of PACCAR (owned by PACCAR). The Company also leasesoffice space from two additional facilities owned by PACCAR and two facilitiesleased by PACCAR.

 

The Company’s employees are covered by a defined benefitpension plan, an unfunded post-retirement medical and life insurance plan, anda defined contribution plan sponsored by PACCAR. Separate allocations ofdefined benefit plan assets and obligations relating to the Company have notbeen made.

 

Periodically, the Company borrows funds from PACCAR andmakes loans to PACCAR. Loans outstanding to PACCAR were $19.9 and $13.8 atMarch 31, 2005 and December 31, 2004, respectively. There were no loansoutstanding from PACCAR at March 31, 2005. Loans outstanding from PACCAR were $.9 at December 31, 2004.

 

PACCAR has issued letters of credit as of March 31, 2005in the amount of $8.7 on behalf of the Company to guarantee funds for paymentto insured franchisees and their customers for any future insurance losses.

 

6

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The Company periodically loans funds to certain foreignfinance and leasing affiliates of PACCAR. These various affiliates have SupportAgreements with PACCAR, similar to the Company’s Support Agreement. The foreignaffiliates operate in the United Kingdom, The Netherlands, Mexico, Canada andAustralia, and any resulting currency exposure is fully hedged. The foreignaffiliates provide financing and leasing of PACCAR- manufactured trucks andrelated equipment sold through PACCAR’s independent dealer networks in Europe,Mexico, Canada and Australia. The Company will not make loans to the foreignaffiliates in excess of the equivalent of $375.0 United States dollars, unlessthe amount in excess of such limits is guaranteed by PACCAR. The Companyperiodically reviews the funding alternatives for theseaffiliates, and these limits may be revised in thefuture. There was a total of $115.4 and $115.3 in loans outstanding toforeign affiliates operating in the United Kingdom and The Netherlands at March 31, 2005 and December 31, 2004,respectively.

 

**NOTE C —Stockholder’s Equity**

 

**Preferred Stock**

 

The Company’s Articles of Incorporation provide that the6% noncumulative, nonvoting preferred stock (100% owned by PFSC) is redeemableonly at the option of the Company’s Board of Directors.

 

**Comprehensive Income**

 

Thecomponents of comprehensive income, net of related tax, were as follows:

 
| ** **                                         | ** ** | **Three Months Ended** | ** ** |
|----------------------------------------------------|------------|------------------------|------------|
| ** **                                         | ** ** | **March 31**           | ** ** |
| ** **                                         | ** ** | **2005**               | ** ** | **2004** | ** ** |
| Net income                                         | ** ** | **$**                  | **18.3**   |   | $ | 15.1 |   |
| Other comprehensive  income:                       |       |                   |       |   |   |
| Unrealized net gain (loss) on derivative contracts | ** ** | **10.7**               |       | (1.1 | ) |
| Total comprehensive income                         | ** ** | **$**                  | **29.0**   |   | $ | 14.0 |   |

 

Accumulated other comprehensive income of $16.1 and $5.4at March 31, 2005 and December 31, 2004, respectively, is comprised of the unrealizednet gain on derivative contracts.

 

7

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| **ITEM 2.** |   | **MANAGEMENT’S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONS**  (Millions of Dollars) |
|-------------|--------|------------------------------------------------------------------------------------------------------------------------|

 

**Results of Operations**

 

The Company’s net income increased 21% to $18.3 forthe first quarter of 2005 from $15.1 for the first quarter of 2004. The profitimprovement primarily resulted from a higher finance margin (revenues minusborrowing, lease and insurance expenses) due to an increase in average earningassets. In the first quarter of 2005, average earning assets increased 18% to$3,714.1 from $3,138.9 in the first quarter of 2004. This was due to higher newloan and lease volume from higher truck production and the resulting increasein units financed. Interest income and expense in the first quarter of 2005were higher from growth in the portfolio and higher market interest rates.Operating lease revenue and related depreciation have increased due to anincrease in operating leases in the past year. In addition, increased revenuefrom insurance premiums and used equipment dispositions contributed to growthin interest and other revenues.

 

The following tablesummarizes the activity in the Company’s allowance for losses on receivablesand presents related ratios:

 

 

##### **Allowancefor Losses**

 
| ** **                                                                                                                                                            | ** ** | **Three Months  Ended** | ** ** | **Year Ended**  | ** ** | **Three Months  Ended** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------|------------|-----------------|------------|-------------------------|------------|
| ** **                                                                                                                                                            | ** ** | **March 31**            | ** ** | **December 31** | ** ** | **March 31**            | ** ** |
| ** **                                                                                                                                                            | ** ** | **2005**                | ** ** | **2004**        | ** ** | **2004**                | ** ** |
| Balance at beginning of  period                                                                                                                                       | ** ** | **$**                   | **67.1**   | ** **      | $          | 67.4                    |       | $ | 67.4 |   |
| Provision for losses                                                                                                                                                  | ** ** | **1.1**                 | ** ** | 4.3             |       | .5                      |       |
| Credit losses net of  recoveries                                                                                                                                      |       | **(.4**                 | **)**      | (4.6            | )          | (1.1                    | )          |
| Balance at end of period                                                                                                                                              | ** ** | **$**                   | **67.8**   | ** **      | $          | 67.1                    |       | $ | 66.8 |   |
| Ratios:                                                                                                                                                               |       | ** **              | ** ** |            |       |                    |       |
| Credit losses net of recoveries ($.4 in 2005) to average net  receivables ($3,359.4 in 2005) annualized for March 31, 2005 and 2004                                   | ** ** | **.04**                 | **%**      | .15             | %          | .16                     | %          |
| Allowance for losses ($67.8 in 2005) to period-end net receivables  ($3,453.4 in 2005)                                                                                | ** ** | **1.96**                | **%**      | 1.98            | %          | 2.26                    | %          |
| Period-end finance and lease receivables and leases past due, over 60  days, ($14.6 in 2005) to period-end retail contracts and lease receivables  ($3,210.3 in 2005) | ** ** | **.45**                 | **%**      | .52             | %          | 1.03                    | %          |

 

8

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** **

**Company Outlook**

 

The future profitability of the Companyis primarily dependent on the generation of new business and on the level ofcredit losses experienced.  Asset growthis contingent upon continued improvement in the general economy and theresulting increase in truck sales financed and the impact of increasedcompetition.  Some economic weakness, aswell as continuing high fuel and insurance costs and higher interest rates,could exert pressure on the profit margins of truck operators and could causehigher levels of past-due accounts and repossessions, which could result inhigher credit losses.

 

**Funding and Liquidity**

 

The Company manages itscapital structure consistent with industry standards. Since 1983, the Company has registered debt securities under theSecurities Act of 1933 for offering to the public. In December 2003, theCompany filed a shelf registration statement under which $3,000.0 ofmedium-term notes could be issued as needed. As of March 31, 2005, $1,650.0 ofsuch securities were available for issuance.

 

TheCompany believes that it has sufficient financial capabilities to continuefunding receivables and servicing debt through internally generated funds,access to public and private debt markets, lines of credit and other financialresources.

 

The Company’s investment grade creditratings continue to provide access to capital markets at competitive interestrates. The Company’s debt ratings at March 31, 2005 are as follows:

 
| ** **            | ** ** | **Moody’s** | ** ** | **Standard and Poor’s** | ** ** |
|-----------------------|------------|------------------|------------|------------------------------|------------|
| Commercial paper      |       | P-1              |       | A-1+                         |       |
| Senior unsecured debt |       | A1               |       | AA-                          |       |

 

TheCompany participates with PACCAR and certain other PACCAR affiliates insyndicated credit facilities of $1,500.0 at March31, 2005 of which $750.0 expires in July2005 and $750.0 expires in July 2006. PACCARintends to replace these credit facilities as they expire with facilitiesof similar amounts. Of the $1,500.0 insyndicated credit facilities, $1,350.0 is available for use by the Companyand/or PACCAR and certain other PACCAR affiliates. The remaining $150.0 isonly available for use by PACCAR’s Canadian subsidiaries. These credit facilities are used to providebackup liquidity for the Company’s commercial paper and maturing medium-termnotes. The Company is liable only for its own borrowings under these creditfacilities. There were no borrowings under these credit facilities in the threemonths ended March 31, 2005 and the year ended December 31, 2004.

 

Other information on liquidity, sources of capital, andcontractual cash commitments as presented in the Company’s 2004 Annual Reporton Form 10-K continues to be relevant.

 

**Forward Looking Statements**

 

Certain information presented inthis Form 10-Q contains forward-looking statements made pursuant to the PrivateSecurities Litigation Reform Act of 1995, which are subject to risks anduncertainties that may affect actual results. Risks and uncertainties include,but are not limited to: national and local economic, political and industryconditions; changes in the levels of new business volume due to unitfluctuations in new PACCAR truck sales; changes in competitive factors; changesaffecting the profitability of truck owners and operators; price changesimpacting equipment costs and residual values; changes in costs andavailability of external funding sources; and legislation and governmentalregulation.

 

9

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| **ITEM 3.** |   | **QUANTITATIVE AND QUALITATIVE  DISCLOSURES ABOUT MARKET RISK** |
|-------------|--------|-----------------------------------------------------------------|

 

Therewas no reportable information during the three months ended March 31, 2005.

 
| **ITEM 4.** |   | **CONTROLS AND PROCEDURES** |
|-------------|--------|-----------------------------|

 

An evaluation was performedunder the supervision and with the participation of the Company’s management,including the principal executive officer and principal financial officer, ofthe effectiveness of the design and operation of the Com­pany’s disclosurecontrols and procedures (as defined in rules 13a-15(e) and 15d-15(e)promulgated under the Securities Exchange Act of 1934, as amended) as of March31, 2005 (“Evaluation Date”). Based on that evaluation, the principal executiveofficer and principal financial officer of the Company concluded that thedisclosure controls and procedures in place at the Company were adequate toensure that information required to be disclosed by the Company, including itsconsolidated subsidiaries (the Company has no subsidiaries), in reports thatthe Company files or submits under the Exchange Act, is recorded, processed,summarized and reported on a timely basis in accordance with applicable rulesand regulations. There have been no significant changes in the Company’sinternal controls over financial reporting during the first quarter of 2005that have materially affected, or are reasonably likely to materially affect,the Company’s internal control over financial reporting.

 

**PART II****— OTHER INFORMATION**

 

For Items 1, 2, 3, 4 and 5, there was no reportableinformation during the three months ended March 31, 2005.

 

 
| **ITEM 6.** |   | **EXHIBITS** |
|-------------|--------|--------------|

 

Any exhibits filedherewith as part of this report are listed in the accompanying Index toExhibits.

 

10

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**SIGNATURES**

 

 

Pursuant to the requirements of the Securities ExchangeAct of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned thereunto duly authorized.

 
|   | **PACCAR Financial Corp.** |
|--------|----------------------------|
|   |                       | (Registrant) |
|   |                       |   |
|   |                       |   |
| Date   |                       | May 2, 2005 |   |   | By | /s/ Timothy M. Henebry  |
|   |                       | Timothy M. Henebry President  (Authorized Officer) |
|   |                       |   |
|   |                       |   |
|   | By                         | /s/ Brice J. Poplawski  |
|   |                       | Brice J. Poplawski Controller  (Chief Accounting Officer) |
|        |                            |  |  |  |  |  |

 

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**FORM10-Q**

**PACCARFINANCIAL CORP.**

** **

**INDEXTO EXHIBITS**

 
| Exhibits (in order of assigned index numbers) |   |
|-----------------------------------------------|--------|
|                                          |   |   |   |   |
|                                          | 3.1    | Restated Articles of Incorporation of the Company, as  amended (incorporated by reference to Exhibit 3.1 to the Company’s Annual  Report on Form 10-K dated March 26, 1985. Amendment incorporated by reference  to Exhibit 19.1 to the Company’s Quarterly Report on Form 10-Q dated August  13, 1985, File Number 0-12553). |
|                                          |   |   |   |   |
|                                          | 3.2    | By-laws of the Company, as amended (incorporated by  reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10  dated October 20, 1983, File Number 0-12553). |
|                                          |   |   |   |   |
|                                          | 4.1    | Indenture for Senior Debt Securities dated as of  December 1, 1983 and first Supplemental Indenture dated as of June 19, 1989  between the Company and Citibank, N.A. (incorporated by reference to Exhibit  4.1 to the Company’s Annual Report on Form 10-K dated March 26, 1984, File  Number 0-12553 and Exhibit 4.2 to the Company’s Registration Statement on  Form S-3 dated June 23, 1989, Registration Number 33-29434). |
|                                          |   |   |   |   |
|                                          | 4.5    | Forms  of Medium-Term Note, Series J (incorporated by reference to Exhibits 4.2A and  4.2B to the Company’s Registration Statement on Form S-3 dated March 2, 2000,  Registration Number 333-31502). |
|                                          |   |   |   |   |
|                                          |   | Form  of Letter of Representation among the Company, Citibank, N.A. and The  Depository Trust Company, Series J (incorporated by reference to Exhibit 4.3  to the Company’s Registration Statement on Form S-3 dated March 2, 2000,  Registration Number 333-31502). |
|                                          |   |   |   |   |
|                                          | 4.6    | Forms  of Medium-Term Note, Series K (incorporated by reference to Exhibits 4.2A and  4.2B to the Company’s Registration Statement on Form S-3 dated December 23,  2003, Registration Number 333-111504). |
|                                          |   |   |   |   |
|                                          |   | Form of Letter of  Representation among the Company, Citibank, N.A. and The Depository Trust  Company, Series K (incorporated by reference to Exhibit 4.3 to the Company’s  Registration Statement on Form S-3 dated December 23, 2003, Registration  Number 333-111504). |
|                                          |   |   |   |   |
|                                          | 10.1   | Support  Agreement between the Company and PACCAR dated as of June 19, 1989  (incorporated by reference to Exhibit 28.1 to the Company’s Registration  Statement on Form S-3 dated June 23, 1989, Registration Number 33-29434). |

 

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|   | 12.1   | Statement re: computation of ratio of earnings to fixed  charges of the Company pursuant to SEC reporting requirements for the three-month  periods ended March 31, 2005 and 2004.                           |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                         |   |   |
|   | 12.2   | Statement re: computation of ratio of earnings to fixed  charges of the Company pursuant to the Support Agreement between the Company  and PACCAR for the three-month periods ended March 31, 2005 and 2004. |
|   |   |                                                                                                                                                                                                         |   |   |
|   | 12.3   | Statement re: computation of ratio of earnings to fixed  charges of PACCAR and subsidiaries pursuant to SEC reporting requirements for  the three-month periods ended March 31, 2005 and 2004.               |
|   |   |                                                                                                                                                                                                         |   |   |
|   | 31.1   | Rule  13a-14(a)/15d-14(a) Certification - Certification of Principal Executive  Officer.                                                                                                                     |
|   |   |                                                                                                                                                                                                         |   |   |
|   | 31.2   | Rule  13a-14(a)/15d-14(a) Certification - Certification of Principal Financial  Officer.                                                                                                                     |
|   |   |                                                                                                                                                                                                         |   |   |
|   | 32.1   | Section  1350 Certifications - Certification pursuant to Rule 13a-14(b) and Section  906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. section 1350).                                                         |

 

 

Other exhibits listed in Item 601 of Regulation S-K arenot applicable.

 

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