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Transcription:

This presentation may contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. A summary of risks and uncertainties is described in more detail in our periodic reports filed with the Securities and Exchange Commission (SEC). We undertake no duty to update or revise this presentation, whether as a result of new information, future events or otherwise. For the most recent financial, risk and other information about PACCAR, please see our SEC filings and most recent earnings release available on the Investor Relations page of www.paccar.com.

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Powertrain Aftermarket Support Commercial Vehicles Information Technology Financial Services Page 3

PACCAR Strategy Quality Technology Innovation Premium Products and Services Profitable Market Share Growth Geographic Expansion Page 4

PACCAR Values Quality Highest Integrity Operational Excellence Conservative Financial Management Long Term Perspective Page 5

Trucking Moves the Economy If you bought it, it probably was delivered by a truck 69% 15% 10% 6% Truck Rail Pipeline Water % Total U.S. Freight Tonnage Hauled by Transportation Mode Page 6

Global >6T Truck Markets 2011 2.9 Million 2016 2.7 Million 2021 2.9 Million EU28 355 305 320 Russia/CIS 130 132.4 120 55 1172.559 1,175 China 960 920 North America 275 330 330 Rest of Asia South America Africa & Middle East 332583 335 India 213 295 360 210 361.135 355 360 235 100 185 205 215 240 Australia PACCAR Truck Assembly 2011 2016 2021 Units in Thousands 17 20 22.6 Page 7

Heavy Duty Commercial Vehicles Units 000s 350 Units (000s) 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 99 01 03 05 07 09 11 13 15 17 Fcst US & Canada Europe South America Page 8

PACCAR Heavy Duty Market Share 40% 40% 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% S. America Europe Australia U.S. and Canada Mexico 2006 2016 0% Page 9

>16T Truck Manufacturing 2016 Production (Units 000 s) Daimler Volvo FAW Volkswagen Dongfeng PACCAR Sinotruk Shaanxi Tata Motors Beijing Foton Ashok Leyland Jianghuai Iveco Hino KAMaz Navistar Isuzu Dayun Hongyan Hualing 0 50 100 150 200 250 #6 Total Production 2016 = 1.8 Million Page 10

PACCAR Truck Production 1.3 Million Trucks Produced 2007-2016 160 140 120 100 80 60 40 20 0 133,900 125,900 61,000 78,800 138,000 140,400 142,900 137,100 154,700 140,900 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Brasil Australia Europe Mexico Canada US Page 11

PACCAR Excellent Financial Performance Throughout the Business Cycle $ Billions Revenue 20 15 10 5 0 $ Billions 3.0 2.5 2.0 1.5 1.0 0.5 0.0 96 98 00 02 04 06 08 10 12 14 16 Operating Cash Flow 96 98 00 02 04 06 08 10 12 14 16 $ Billions $ Millions 20 1.8 1.8 7% 1.5 5% (10% Adj. NI)** 1.5 15 1.2 1.2 10% 10 5 0 $ Billions 3.0 2.5 2.0 1.5 1.0 0.5 0.0 $ Millions Net Income 0.9 0.6 0.3 0.0 $ Millions 900 750 600 450 300 150 0 96 98 00 02 04 06 08 10 12 14 16* Net Income Adjusted Net Income * Capital Investments and R&D Expenses 96 98 00 02 04 06 08 10 12 14 16 Capital * 2016 adjusted net income excludes non-recurring European Commission charge of $833 million. See appendix for supplementary information on Non-GAAP measures. ** 10% Compounded Annual Growth Rate was determined using Adjusted Net Income of $1,355 million. R&D 0.9 0.6 0.3 0.0 $ Millions 900 750 600 450 300 150 0 Page 12

Best-in-Class Operating Efficiency Commercial Vehicle Segment Operating Margin 15% 12% 9% 6% 3% 0% -3% -6% -9% 07 08 09 10 11 12 13 14 15 16 PACCAR Volkswagen Daimler Volvo Iveco Navistar 15% 12% 9% 6% 3% 0% -3% -6% -9% Page 13

Best-in-Class Operating Efficiency Inventory Turns # Inventory Turns 25 # Inventory Turns 25 20 20 15 15 10 10 5 5 0 07 08 09 10 11 12 13 14 15 16 0 PACCAR Volkswagen Daimler Volvo CNH Navistar Page 14

Best-in-Class Operating Efficiency SG&A % of Sales 20% 20% 15% 15% 10% 10% 5% 5% 0% 07 08 09 10 11 12 13 14 15 16 PACCAR Volkswagen Daimler Volvo CNH Navistar 0% Page 15

Net Income per Truck Units (000s) 180 $/Truck 11,250 160 10,000 140 8,750 120 7,500 100 6,250 80 5,000 60 3,750 40 2,500 20 1,250 0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16* Trucks Net Income per Truck Adjusted Net Income Per Truck * 0 * 2016 Adjusted Net Income Per Truck was determined using Adjusted Net Income of $1,355 million, which excludes non-recurring European Commission charge of $833 million. See appendix for supplementary information on non-gaap measures. Page 16

Annualized Shareholder Total Return % Fifteen Years, As of March 31, 2017 Deere Volvo Eaton Caterpillar Hino Volkswagen S&P 500 Daimler Toyota Ford Navistar -4 0 4 8 12 16 Page 17

PACCAR Inc A+/A1 Credit Ratings ($ Millions) 3/31/17 Cash & Securities $ 2,895 Manufacturing Assets 5,879 Financial Services Assets 12,266 Total Assets $ 21,040 Manufacturing Debt $ 0 Manufacturing Liabilities 4,273 Financial Services Liabilities 9,687 Shareholders' Equity 7,080 Total Liabilities & Equity $ 21,040 Page 18

PACCAR Overview Q1 2017 Consolidated Sales & Revenues $4.24 Billion Net Income $310 Million PACCAR Financial Pre-Tax Profit $57 Million PACCAR Parts Pre-Tax Profit $152 Million Stockholders Equity $7.08 Billion A1/A+ Credit Ratings Regular Dividend Increased 33% in Last 5 Years Page 19

PACCAR Revenues and Profit 78 consecutive years of net profit Dividends every year since 1941 ($ Millions) 1 ST Quarter 2017 2016 Revenues $4,238 $4,300 Net Income (Loss) 310 (595) Diluted Net Income (Loss) Per Share 0.88 (1.69) Adjusted Net Income (Non-GAAP) 348 Adjusted Diluted EPS (Non-GAAP) 0.99 Note: See appendix for supplementary information on non-gaap financial measures Page 20

PACCAR Capital Allocation Uses of Cash Flow 2012 2016: $8 Billion Capital Allocation Strategy Share Repurchase $0.5 Dividend $3.2 Debt Repayment $0.2 Finance Company $1.0 Capex $1.9 R&D $1.2 R&D and capex investments drive future growth Credit rating of A+/A1 reflects strategic nature of our financial services operations Long history of successful acquisitions; highly selective, strategic, clear path to value creation Quarterly plus special dividends Strategic share repurchases Page 21

New Products and Technologies Remote Diagnostics Fault Detected Off-Board Diagnostics Automated Notification Action Plan Resolution Page 22

PACCAR Investments DAF Sales Office, Haddenham, U.K. DAF, Westerlo, Belgium PACCAR Engine Factory, Columbus, Mississippi PACCAR Parts Distribution Center, Toronto, Canada Page 23

Dividends Declared and Stock Repurchases $ Millions 1,200 $ Millions 1,200 1,000 1,000 800 800 600 600 400 400 200 200 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 0 Dividends Stock Repurchased Page 24

PACCAR Engines Worldwide PACCAR PX-5 4.5 Liter PACCAR PX-7 6.7 Liter PACCAR PX-9 8.9 Liter PACCAR PR 9.2 Liter PACCAR MX-11 10.8 Liter PACCAR MX-13 12.9 Liter Page 25

Cumulative PACCAR MX Engines Produced Engines (000s) 550 500 450 400 350 300 250 200 150 100 50 Engines (000s) 550 500 450 400 350 300 250 200 150 100 50 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0 DAF MX-13 KW/PB MX-13 MX-11 Page 26

PACCAR Parts Revenue $ Millions $ Millions 3,500 3,500 3,000 2,500 8% 3,000 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 0 Page 27

PACCAR Parts Distribution Centers and Dealers PACCAR Distribution Centers KW, PB, DAF Dealers Page 28

PACCAR Parts Investments Eindhoven, NL Lancaster, PA Renton, WA Ponta Grossa, BR Page 29

PACCAR Global Dealer Network Page 30

PACCAR Global Expansion Taiwan Russia Brasil India Page 31

Road to Autonomous Commercial Vehicles Component Controls System Integration Network Integration Automated Vehicle 1980-2014 2015-2017 2018-2024 2025+ Anti Lock Braking Lane Departure Warning Object Detection Adaptive Cruise Control Collision Avoidance Lane Keeping Assist Predictive Cruise Control Vehicle to Vehicle Network Driver Monitoring Vehicle to Infrastructure Network Automatic Lane Change Automatic Routing Greater Vehicle Autonomy Improves Safety, Fuel Efficiency and Truck Utilization Increases Truck Content Increases Parts Demand Page 32

Environmental Leadership Ranked in Top 10% of Companies Reporting to CDP (Carbon Disclosure Project) Reduce Environmental Impact Through Product Design Product Recyclability 90%+ Reduction in NOx and Particulate Emissions Alternative Fuel Vehicles (Natural Gas, Hybrid) Zero Waste to Landfill Environmental Certification (ISO 14001) EPA SmartWay January 2017 Page 33

PACCAR Financial Services Q1 2017 $12.3 Billion in Assets Pre-tax Profit $57 Million 178,000 Vehicles Financed Dealer Floorplan Retail Financing Full Service Leasing Page 34

PACCAR Financial Services 23 Countries on Four Continents PACCAR Financial Regional Offices Page 35

PACCAR Financial Services Assets Australia & Mexico $0.9 Billion 9% Australia & Mexico $1.3 Billion 10% PacLease $1.5 Billion 16% Europe $2.2 Billion 22% U.S. & Canada $5.2 Billion 53% Europe $2.7 Billion 22% PacLease $2.2 Billion 18% U.S. & Canada $6.1 Billion 50% 2006 - $9.8 Billion 1Q17 - $12.3 Billion Page 36

Assets Billions 3.0 PACCAR Financial Europe Assets Billions 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 47,800 Vehicles 0.5 0.5 200 DAF Dealers 0.0 07 08 09 10 11 12 13 14 15 16 0.0 16 European Countries Page 37

PACCAR Leasing Trucks 000 s 40 Trucks 000 s 40 35 35 30 30 25 25 20 20 566 Service Locations 15 15 37,100 Vehicles 10 07 08 09 10 11 12 13 14 15 16 10 $2.2 Billion Assets Page 38

PACCAR Financial Services Delivers Strong Performance % 8 Low 30+ Days Past Due % 8 Assets $ Billions 16 Assets and Pretax Profit Pre-tax Profit $ Millions 400 7 7 14 350 6 6 12 300 5 5 10 250 4 4 8 200 3 3 6 150 2 2 4 100 1 1 2 50 0 90 92 94 96 98 00 02 04 06 08 10 12 14 16 0 0 07 08 09 10 11 12 13 14 15 16 0 Pretax Profit Avg Earnings Assets Page 39

PACCAR Financial Services ($ Millions) 3/31/17 Finance & Other Receivables $8,971 Equipment on Operating Leases 2,646 Other Assets 649 Total Financial Services Assets $12,266 Commercial Paper & Bank Loans $2,516 Term Notes 5,849 Deferred Taxes & Other Liabilities 1,322 Total Financial Services Liabilities 9,687 Equity 2,579 Total Liabilities & Equity $12,266 Page 40

PACCAR Competitive Advantages Excellent Shareholder Return Experienced Management Team Highest Quality Products Rigorous Cost Control Balanced Global Diversification Excellent Supplier Partnerships Extensive Capital Investments Innovative Technology Global Aftermarket Parts Sales Profitable Financial Services Strongest Dealer Network Page 41

Appendix Reconciliation of GAAP to Non-GAAP Financial Measures This presentation includes adjusted net income (non-gaap) and adjusted net income per diluted share (non-gaap), which are financial measures that are not in accordance with U.S. generally accepted accounting principles ( GAAP ), since they exclude the non-recurring European Commission charge in 2016. These measures differ from the most directly comparable measures calculated in accordance with GAAP and may not be comparable to similarly titled non-gaap financial measures used by other companies. Management utilizes these non-gaap measures to evaluate the Company s performance and believes these measures allow investors and management to evaluate operating trends by excluding a significant non-recurring charge that is not representative of underlying operating trends. Reconciliations from the most directly comparable GAAP measures to adjusted net income (non-gaap) and adjusted net income per diluted share (non-gaap) are as follows: Quarter Ended (in millions) March 31, 2016 Net Loss $ (594.6) Non-Recurring European Commission Charge 942.6 Adjusted Net Income (Non-GAAP) $ 348.0 Year Ended December 31, 2016 Per Diluted Share: Net Loss $ (1.69) Non-Recurring European Commission Charge 2.68 Adjusted Net Income (Non-GAAP) $ 0.99 Page 42

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