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.
January 2017 Page 2
Powertrain Aftermarket Support Commercial Vehicles Information Technology Financial Services January 2017 Page 3
PACCAR Strategy Quality Quality Technology Technology Innovation Innovation Premium Products and Services Profitable Market Share Growth Geographic Expansion January 2017 Page 4
PACCAR Values Conservative Highest Operational Long Term Quality Financial Integrity Excellence Perspective Management January 2017 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 January 2017 Page 6
Global >6T Truck Markets 2011 – 2.9 Million Russia/CIS China 2016 – 2.7 Million 2021 – 2.9 Million 1,175 EU28 1172.559 130 120 132.4 55 960 355 320 920 305 North America 330 330 275 Rest of Asia 345 360 India 360.074 210 213 Africa & 332583 300 360 South America 335 Middle East 215 240 205 235 100 185 Australia 2011 2016 2021 18 20 17 20.4 17 PACCAR Truck Assembly Units in Thousands January 2017 Page 7
Heavy Duty Commercial Vehicles Units 000s Units (000s) 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 99 01 03 05 07 09 11 13 15 17 Fcst US & Canada Europe South America January 2017 Page 8
PACCAR Heavy Duty Market Share 40% 40% 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% S. America Europe Australia U.S. and Canada Mexico 2006 2016 January 2017 Page 9
>16T Truck Manufacturing Estimated 2016 Production (Units 000’s) Daimler Volvo Volkswagen FAW Dongfeng PACCAR #6 Sinotruk Shaanxi Tata Motors Beijing Foton Ashok Leyland Hino Jianghuai Iveco Navistar KAMaz Isuzu Dayun Total Production 2016 = 1.8 Million Hongyan Hualing 0 50 100 150 200 250 January 2017 Page 10
PACCAR Truck Production 1.3 Million Trucks Produced 2007 ‐ 2016 154,700 160 140,400 142,900 140,900 138,000 137,100 133,900 140 125,900 Brasil 120 Australia 100 78,800 Europe 80 61,000 Mexico 60 Canada 40 US 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 January 2017 Page 11
PACCAR Excellent Financial Performance Throughout the Business Cycle Revenue Net Income $ Billions $ Billions $ Millions $ Millions 1.8 1.8 20 20 5% (10% Adj. NI)** 7% 1.5 1.5 15 15 1.2 1.2 0.9 0.9 10 10 0.6 0.6 5 5 0.3 0.3 0.0 0.0 0 0 96 98 00 02 04 06 08 10 12 14 16* 96 98 00 02 04 06 08 10 12 14 16 Net Income Adjusted Net Income * Capital Investments and R&D Expenses Operating Cash Flow $ Billions $ Billions $ Millions $ Millions 900 900 3.0 3.0 10% 750 750 2.5 2.5 600 600 2.0 2.0 450 450 1.5 1.5 300 300 1.0 1.0 150 150 0.5 0.5 0 0 0.0 0.0 96 98 00 02 04 06 08 10 12 14 16 96 98 00 02 04 06 08 10 12 14 16 Capital R&D * 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. January 2017 Page 12
Best ‐ in ‐ Class Operating Efficiency CV Segment Operating Margin Inventory Turns 15% 15% 25 25 12% 12% 20 20 9% 9% 6% 6% 15 15 3% 3% 10 10 0% 0% -3% -3% 5 5 -6% -6% -9% -9% 0 0 06 07 08 09 10 11 12 13 14 15 06 07 08 09 10 11 12 13 14 15 PACCAR Volkswagen Daimler PACCAR Volkswagen Daimler Volvo Iveco Navistar Volvo CNH Navistar SG&A % of Sales After-Tax Return on Equity % 20% 20% 40% 40% 30% 30% 15% 15% 20% 20% 10% 10% 10% 10% 5% 5% 0% 0% -10% -10% 0% 0% 06 07 08 09 10 11 12 13 14 15 06 07 08 09 10 11 12 13 14 15 PACCAR Volkswagen Daimler PACCAR Volkswagen Daimler Volvo CNH Navistar Volvo CNH January 2017 Page 13
Net Income per Truck Units (000s) $/Truck 180 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 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 * * 2016 Adjusted Net Income Per Truck was determined using Adjusted Net Income of $1,355 million, which excludes non-recurring European Commission charge of $833 million. See appendix for supplementary information on non-GAAP measures. January 2017 Page 14
Annualized Shareholder Total Return % Fifteen Years, As of December 31, 2016 Deere Volvo Eaton Caterpillar Volkswagen Hino Toyota S&P 500 Daimler Ford Navistar -4 0 4 8 12 16 January 2017 Page 15
PACCAR Inc A+/A1 Credit Ratings ($ Millions) 12/31/16 Cash & Securities $ 2,923 Manufacturing Assets 5,521 Financial Services Assets 12,195 Total Assets $ 20,639 Manufacturing Debt $ 0 Manufacturing Liabilities 4,056 Financial Services Liabilities 9,805 Shareholders' Equity 6,778 Total Liabilities & Equity $ 20,639 January 2017 Page 16
PACCAR Overview – Q4 2016 Consolidated Sales & Revenues $4.07 Billion Net Income $289 Million PACCAR Financial Pre ‐ Tax Profit $78 Million PACCAR Parts Pre ‐ Tax Profit $138 Million Stockholders’ Equity $6.78 Billion A1/A+ Credit Ratings Regular Dividend Increased 30% in Last 5 Years Note: See appendix for supplementary information on non-GAAP financial measures January 2017 Page 17
PACCAR Revenues and Profit 78 consecutive years of net profit Dividends every year since 1941 4 th Quarter ($ Millions) Full Year 2016 2015 2016 2015 Revenues $4,071 $4,355 $17,033 $19,115 Net Income 289 347 522 1,604 Diluted EPS 0.82 0.98 1.48 4.51 Adjusted Net Income (Non ‐ GAAP) 1,355 Adjusted Diluted EPS (Non ‐ GAAP) 3.85 Note: See appendix for supplementary information on non-GAAP financial measures January 2017 Page 18
PACCAR Capital Allocation Uses of Cash Flow Capital Allocation Strategy 2012 – 2016: $8.1 Billion Debt • R&D and capex investments Repayment Share $0.2 drive future growth Repurchase Finance $0.5 Company • Credit rating of A+/A1 reflects Capex $1.0 $2.0 strategic nature of our financial services operations R&D • Long history of successful $1.2 Dividend $3.2 acquisitions; highly selective, strategic, clear path to value creation • Quarterly plus special dividends • Strategic share repurchases January 2017 Page 19
New Products and Technologies Remote Diagnostics Fault Off-Board Automated Action Resolution Detected Diagnostics Notification Plan January 2017 Page 20
New Facility Investments Peterbilt, Denton, Texas DAF, Westerlo, Belgium Kenworth, Chillicothe, Ohio PACCAR Parts Distribution Center, Renton, WA January 2017 Page 21
Dividends Declared and Stock Repurchases $ Millions $ Millions 1,200 1,200 1,000 1,000 800 800 600 600 400 400 200 200 0 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Dividends Stock Repurchased January 2017 Page 22
PACCAR Engines Worldwide PACCAR PX ‐ 5 PACCAR PX ‐ 7 PACCAR PX ‐ 9 4.5 Liter 6.7 Liter 8.9 Liter PACCAR PR PACCAR MX ‐ 11 PACCAR MX ‐ 13 9.2 Liter 10.8 Liter 12.9 Liter January 2017 Page 23
Cumulative PACCAR MX Engines Produced Engines (000s) Engines (000s) 550 550 500 500 450 450 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 DAF MX-13 KW/PB MX-13 MX-11 January 2017 Page 24
PACCAR Parts Revenue $ Millions $ Millions 3,500 3,500 3,000 3,000 8% 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 0 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 January 2017 Page 25
PACCAR Parts Distribution Centers and Dealers PACCAR Distribution Centers January 2017 Page 26
PACCAR Parts Investments Eindhoven, NL Lancaster, PA Renton, WA Ponta Grossa, BR January 2017 Page 27
PACCAR Global Dealer Network January 2017 Page 28
PACCAR Global Expansion Taiwan Russia Brasil India January 2017 Page 29
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