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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Commercial Vehicles Aftermarket Support Powertrain Information Technology Financial Services Page 3
>16t Truck Manufacturing 2015 Production (Units 000 s) Daimler Volvo Volkswagen PACCAR Dongfeng Sinotruk Tata Motors FAW Shaanxi Beijing Foton Hino Navistar Iveco Ashok Leyland Jianghuai Isuzu KAMaz Ford Hualing Dayun 0 50 100 150 200 250 300 #4 Total Production 2015 = 1.6 Million Page 4
PACCAR Revenues and Profit 77 consecutive years of net profit Dividends every year since 1941 ($ Millions) 3 rd Quarter Nine Months 2016 2015 2016 2015 Revenues $4,249 $4,847 $12,963 $14,760 Adjusted Net Income (Non GAAP) 346 431 1,066 1,257 Return on Revenue 8.1% 8.9% 8.2% 8.5% Adjusted Diluted EPS 0.98 1.21 3.03 3.53 Net Income 346 431 233 1,257 Diluted EPS 0.98 1.21 0.66 3.53 Note: See appendix for supplementary information on non-gaap financial measures Page 5
PACCAR Inc A+/A1 Credit Ratings ($ Millions) 9/30/16 Cash & Securities $ 2,801 Manufacturing Assets 5,794 Financial Services Assets 12,374 Total Assets $ 20,969 Manufacturing Debt $ 0 Manufacturing Liabilities 4,154 Financial Services Liabilities 9,837 Shareholders' Equity 6,978 Total Liabilities & Equity $ 20,969 Page 6
PACCAR Overview Q3 2016 Consolidated Sales & Revenues $4.25 Billion $346 Million Net Income PACCAR Financial Pre Tax Profit $71 Million PACCAR Parts Pre Tax Profit $138 Million $6.98 Billion Stockholders Equity A1/A+ Credit Ratings Regular Dividend Increased Over 30% in Last 5 Years Total Dividend Yield of Over 4% Note: See appendix for supplementary information on non-gaap financial measures Page 7
$ Billions Revenue 20 15 10 5 0 $ Billions 3.0 2.5 2.0 1.5 1.0 0.5 0.0 PACCAR Excellent Financial Performance Throughout the Business Cycle 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Operating Cash Flow 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 $ Billions 20 15 10 5 0 $ Billions 3.0 2.5 2.0 1.5 1.0 0.5 0.0 $ Millions Net Income 1.8 1.5 1.2 0.9 0.6 0.3 0.0 $ Millions 900 750 600 450 300 150 0 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Capital Investments and R&D Expenses 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Capital R&D $ Millions 1.8 1.5 1.2 0.9 0.6 0.3 0.0 $ Millions 900 750 600 450 300 150 0 Page 8
Net Income per Truck Units (000s) 180 160 140 120 100 80 60 40 20 $/Truck 11,250 10,000 8,750 7,500 6,250 5,000 3,750 2,500 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 Trucks Delivered Net Income per Truck 0 Page 9
Industry Operating Margin 15% 12% 9% 6% 3% 0% -3% -6% -9% 05 06 07 08 09 10 11 12 13 14 15 PACCAR Daimler Volkswagen Volvo Iveco Navistar 15% 12% 9% 6% 3% 0% -3% -6% -9% Page 10
Annualized Shareholder Total Return % Fifteen Years, As of September 30, 2016 Volvo Deere Caterpillar Isuzu Volkswagen Hino Daimler S&P 500 Toyota Ford Navistar -5 0 5 10 15 20 Page 11
Dividends Declared and Stock Repurchases $ Millions 1,050 900 750 600 450 300 150 $ Millions 1,050 900 750 600 450 300 150 0 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 0 Dividends Stock Repurchased Page 12
Quality Technology Innovation Kenworth T880 Commercial Truck of the Year 2015 Operational and Workplace Leadership Awards DAF XF U.K. Fleet Truck of the Year 2016 Fenabrave Brasil Brand of the Year 2016 Engineering and Production Technology Leadership Awards Page 13
New Products and Technologies Remote Diagnostics Fault Detected Off-Board Diagnostics Automated Notification Action Plan Resolution Page 14
New Facility Investments Westerlo Peterbilt, Denton, Texas DAF, Westerlo, Belgium Kenworth, Chillicothe, Ohio PACCAR Parts Distribution Center, Renton, WA Page 15
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 16
PACCAR MX Engines In Operation Engines (000s) Engines (000s) 450 400 350 300 250 200 150 100 50 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 450 400 350 300 250 200 150 100 50 0 DAF MX-13 KW/PB MX-13 DAF MX-11 Page 17
Heavy Duty Commercial Vehicles Units 000s 350 Units (000s) 350 300 300 250 250 200 200 150 150 100 100 50 50 0 98 00 02 04 06 08 10 12 14 16 Fcst US & Canada Europe South America 0 Page 18
PACCAR Heavy Duty Market Share 45% 45% 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 0% 2005 2015 Page 19
PACCAR Truck Production 1.3 Million Trucks Produced 2006 2015 180 160 140 166,800 133,900 125,900 154,700 138,000 140,400 142,900 137,100 Brasil 120 Australia 100 80 60 40 20 0 61,000 78,800 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Europe Mexico Canada US Page 20
PACCAR Parts Revenue $ Millions $ Millions 3,500 3,500 3,000 3,000 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 06 07 08 09 10 11 12 13 14 15 0 Page 21
PACCAR Parts Distribution Centers and Dealers PACCAR Distribution Centers Page 22
PACCAR Parts Investments Eindhoven, NL Lancaster, PA Renton, WA Ponta Grossa, BR Page 23
PACCAR Global Dealer Network Page 24
$ Millions 500 Rigorous Cost Control SG&A % 5 400 4 300 3 200 06 07 08 09 10 11 12 13 14 15 Dollars % to Sales 2 Reliability Fast & Easy Assembly Robust Design Efficiency Productivity Streamlined Processes Eliminate Defects Reduce Variation Consistent Performance Page 25
Global >6T Truck Markets 2010 2.7 Million 2015 2.5 Million 2020 2.7 Million EU28 Russia/CIS 87.1 85 55 115 China 1280.266 1,280 235 320 315 750 845 North America 390 340 190 Rest of Asia South America 215 130 170 Africa & Middle East 175 225 225 276100 275 255 India 201 330 200 Australia 362.7 365 365 PACCAR Truck Assembly 2010 2015 2020 Units in Thousands 15 20 20.6 21 Page 26
PACCAR Global Expansion Taiwan Russia Brasil India Page 27
Environmental Leadership Member 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 Page 28
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PACCAR Financial Services Q3 2016 $12.4 Billion in Assets $71 Million Pre tax Profit 176,000 Vehicles Financed Dealer Floorplan Retail Financing Full Service Leasing Page 30
PACCAR Financial Services Bellevue Salt Lake City Mexicali Toronto Chicago Philadelphia Denton Spartanburg Atlanta Eindhoven London Paris Madrid Freshen, Germany Warsaw Prague Milan Mexico City PACCAR Financial Regional Offices Melbourne Page 31
PACCAR Financial Services Assets Australia & Mexico $0.8 Billion 9% Australia & Mexico $1.2 Billion 9% PacLease $1.2 Billion 14% Europe $1.8 Billion 22% U.S. & Canada $4.6 Billion 55% Europe $2.7 Billion 22% PacLease $2.3 Billion 18% U.S. & Canada $6.2 Billion 51% 2005 - $8.4 Billion 3Q16 - $12.4 Billion Page 32
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 45,800 Vehicles 0.5 0.5 200 DAF Dealers 0.0 06 07 08 09 10 11 12 13 14 15 0.0 16 European Countries Page 33
PACCAR Leasing Trucks 000 s 40 Trucks 000 s 40 35 35 30 30 25 25 20 20 564 Service Locations 15 15 37,600 Vehicles 10 06 07 08 09 10 11 12 13 14 15 10 $2.3 Billion Assets Page 34
PACCAR Financial Services Delivers Strong Performance Low 30+ Days Past Due % % 8 8 7 7 6 6 Assets $ Billions 16 14 12 Assets and Pre tax Profit Pre-tax Profit $ Millions 400 350 300 5 5 10 250 4 4 8 200 3 3 6 150 2 2 4 100 1 1 2 50 0 91 93 95 97 99 01 03 05 07 09 11 13 15 0 0 06 07 08 09 10 11 12 13 14 15 0 Avg. Earning Assets Pre-tax Profit Page 35
PACCAR Financial Services ($ Millions) 9/30/16 Finance & Other Receivables $9,078 Equipment on Operating Leases 2,609 Other Assets 687 Total Financial Services Assets $12,374 Commercial Paper & Bank Loans $2,516 Term Notes 6,014 Deferred Taxes & Other Liabilities 1,307 Total Financial Services Liabilities 9,837 Equity 2,537 Total Liabilities & Equity $12,374 Page 36
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 37
Appendix Reconciliation of Non GAAP to 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. 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 of adjusted net income (non-gaap) and adjusted net income per diluted share (non-gaap) to the most directly comparable GAAP measures are as follows: Nine Months Ended (in millions) September 30, 2016 Adjusted Net Income (Non-GAAP) $ 1,065.9 Non-recurring European Commission Charge (833.0) Net Income $ 232.9 Nine Months Ended September 30, 2016 Per Diluted Share: Adjusted Net Income (Non-GAAP) $ 3.03 Non-Recurring European Commission Charge (2.37) Net Loss $ 0.66 Page 38
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