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Page 1: This presentation may contain statements that are · PDF fileWarning •Object Detection ... •Automatic Routing Automated Vehicle 2025+ Greater Vehicle Autonomy • Improves Safety,
Page 2: This presentation may contain statements that are · PDF fileWarning •Object Detection ... •Automatic Routing Automated Vehicle 2025+ Greater Vehicle Autonomy • Improves Safety,

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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Page 2October 2017

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Page 3October 2017

Aftermarket Support

Financial ServicesInformation Technology

Powertrain

Commercial Vehicles

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Page 4October 2017

PACCAR Strategy

Premium Products and Services

Profitable Market Share Growth

Geographic Expansion

QualityQuality TechnologyTechnology InnovationInnovation

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Page 5October 2017

PACCAR Values

Highest Integrity

Operational Excellence

Conservative Financial 

ManagementQuality Long Term 

Perspective

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Page 6October 2017

Trucking Moves the EconomyIf you bought it, it probably was delivered by a truck

71%

13% 10% 6%Truck Rail Pipeline Water

% Total U.S. Freight Tonnage Hauled by Transportation Mode

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Page 7October 2017

Units in ThousandsPACCAR Truck Assembly

2011 – 2.9 Million2016 – 2.7 Million

2011 2016

330

100

North America

South America

275

235

355

215

Africa & Middle East

EU28

305

205

332583 295

1172.559

132.4

60960

India213

355210

Rest of Asia

Russia/CIS China 

17 2017

Australia

1301,175

335

Global >6T Truck Markets

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Page 8October 2017

Heavy Duty Commercial Vehicles

0

50

100

150

200

250

300

350

0

50

100

150

200

250

300

350

99 01 03 05 07 09 11 13 15 17 Fcst

Units (000s)Units (000s)

US & Canada Europe South America

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Page 9October 2017

PACCAR Heavy Duty Market Share

0%

5%

10%

15%

20%

25%

30%

35%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

S. America Europe Australia U.S. and Canada Mexico

2006 2016

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Page 10October 2017

>16T Truck Manufacturing2016 Production (Units 000’s)

0 50 100 150 200 250Hualing

HongyanDayunIsuzu

NavistarKAMaz

HinoIveco

JianghuaiAshok Leyland

Beijing FotonTata Motors

ShaanxiSinotrukPACCAR

DongfengVolkswagen

FAWVolvo

Daimler

#6

Total Production 2016 = 1.8 Million

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Page 11October 2017

0

20

40

60

80

100

120

140

160

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Brasil

Australia

Europe

Mexico

Canada

US

133,900125,900

61,000

78,800

138,000140,400

137,100

PACCAR Truck Production1.3 Million Trucks Produced 2007‐2016

142,900154,700

140,900

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Page 12October 2017

0150300450600750900

0150300450600750900

96 98 00 02 04 06 08 10 12 14 16

Capital Investments and R&D Expenses

Capital R&D

PACCARExcellent Financial Performance Throughout the Business Cycle

0.00.51.01.52.02.53.0

0.00.51.01.52.02.53.0

96 98 00 02 04 06 08 10 12 14 16

Operating Cash Flow$ Millions$ Millions$ Billions$ Billions

0

5

10

15

20

0

5

10

15

20

96 98 00 02 04 06 08 10 12 14 16

$ Billions$ Billions Revenue

0.00.30.60.91.21.51.8

0.00.30.60.91.21.51.8

96 98 00 02 04 06 08 10 12 14 16*

$ Billions$ Billions Net Income

Net Income Adjusted Net Income *

7% 5% (10% Adj. NI)**

10%

* 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.

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Page 13October 2017

Best‐in‐Class Operating EfficiencyCommercial Vehicle Segment Operating Margin

-9%

-6%

-3%

0%

3%

6%

9%

12%

15%

-9%

-6%

-3%

0%

3%

6%

9%

12%

15%

07 08 09 10 11 12 13 14 15 16

PACCAR Volkswagen Daimler Volvo Iveco Navistar

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Page 14October 2017

Best‐in‐Class Operating Efficiency Inventory Turns

0

5

10

15

20

25

0

5

10

15

20

25

07 08 09 10 11 12 13 14 15 16

# Inventory Turns# Inventory Turns

PACCAR Volkswagen Daimler Volvo CNH Navistar

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Page 15October 2017

Best‐in‐Class Operating EfficiencySG&A % of Sales

0%

5%

10%

15%

20%

0%

5%

10%

15%

20%

07 08 09 10 11 12 13 14 15 16

PACCAR Volkswagen Daimler Volvo CNH Navistar

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Page 16October 2017

Net Income per Truck

0

1,250

2,500

3,750

5,000

6,250

7,500

8,750

10,000

11,250

0

20

40

60

80

100

120

140

160

180

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 *

Units (000s) $/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.

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Page 17October 2017

Annualized Shareholder Total Return %Fifteen Years, As of September 30, 2017

Volvo

Caterpillar

Deere

Eaton

Hino

Volkswagen

Daimler

Toyota

Navistar

Ford

S&P 500

0 4 8 12 16 20

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Page 18October 2017

PACCAR IncA+/A1 Credit Ratings

9/30/17Cash & Securities $   3,421Manufacturing Assets 6,621Financial Services Assets 13,062Total Assets $ 23,104

Manufacturing Debt  $           0Manufacturing Liabilities 4,885Financial Services Liabilities 10,284Shareholders' Equity 7,935Total Liabilities & Equity $ 23,104

($ Millions)

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Page 19October 2017

PACCAR Overview – Q3 2017

Consolidated Sales & Revenues $5.1 Billion

Net Income $403 Million

PACCAR Financial Pre‐Tax Profit $71 Million

PACCAR Parts Record Pre‐Tax Profit $153 Million

Stockholders’ Equity $7.9 Billion

A1/A+ Credit Ratings

Regular Dividend Increased 25% in Last 5 Years

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Page 20October 2017

PACCAR Revenues and Profit

($ Millions) 3rd Quarter Nine Months2017 2016 2017 2016

Revenues $5,060 $4,249 $14,002 $12,963

Net Income  403 346 1,086 233Diluted EPS 1.14 0.98 3.08 0.66

Adjusted Net Income (Non‐GAAP) 1,066Adjusted Diluted EPS 3.03

78 consecutive years of net profit

Dividends every year since 1941

Note: See appendix for supplementary information on non-GAAP financial measures

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Page 21October 2017

PACCAR Capital Allocation

• 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

Capex$1.9

R&D$1.2

Dividend$3.2

Share Repurchase

$0.5 Finance Company

$1.0

Debt Repayment

$0.2

Uses of Cash Flow2012 – 2016: $8 Billion 

Capital Allocation Strategy

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Page 22October 2017

New Products and Technologies

Platooning HoloLens – Augmented Reality

2017 DAF CF & XF PACCAR Axles

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Page 23October 2017

PACCAR Investments

DAF Sales Office, Haddenham, U.K.

PACCAR Engine Factory, Columbus, Mississippi PACCAR Parts Distribution Center, Toronto, Canada

DAF, Westerlo, Belgium

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Page 24October 2017

Dividends Declared and Stock Repurchases

0

200

400

600

800

1,000

1,200

0

200

400

600

800

1,000

1,200

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

$ Millions$ Millions

Dividends Stock Repurchased

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Page 25October 2017

PACCAR PR9.2 Liter

PACCAR MX‐1312.9 Liter

PACCAR PX‐76.7 Liter

PACCAR PX‐5 4.5 Liter

PACCAR Engines Worldwide

PACCAR MX‐1110.8 Liter

PACCAR PX‐98.9 Liter

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Page 26October 2017

0

50

100

150

200

250

300

350

400

450

500

550

0

50

100

150

200

250

300

350

400

450

500

550

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Engines (000s)Engines (000s)

Cumulative PACCAR MX Engines Produced

KW/PB MX-13 MX-11DAF MX-13

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Page 27October 2017

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

$ Millions $ Millions

PACCAR Parts Revenue

8%

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Page 28October 2017

PACCAR Parts Distribution Centers and Dealers

PACCARDistributionCentersKW, PB, DAF Dealers

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Page 29October 2017

PACCAR Parts Investments

Renton, WA Ponta Grossa, BR

Eindhoven, NL Lancaster, PA

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Page 30October 2017

PACCAR Global Dealer Network

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Page 31October 2017

DAF Brasil

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Page 32October 2017

Road to Autonomous Commercial Vehicles

• Anti Lock Braking

• Lane Departure Warning

• Object Detection

• Adaptive Cruise Control

Component Controls

1980‐2014

• Collision Avoidance

• Lane Keeping Assist

• Predictive Cruise Control

System Integration

2015‐2017

• Vehicle to Infrastructure Network

• Automatic Lane Change

• Automatic Routing

Automated Vehicle

2025+

Greater Vehicle Autonomy

• Improves Safety, Fuel Efficiency and Truck Utilization

• Increases Truck Content

• Increases Parts  Demand

• Vehicle to Vehicle Network

• Driver Monitoring

Network Integration

2018‐2024

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Page 33October 2017

Environmental Leadership

Ranked in Top 10% of Companies Reporting to CDP (Carbon Disclosure Project)

Reduce Environmental Impact Through Product Design

Product Recyclability90%+ Reduction in NOx and Particulate Emissions

Alternative Fuel Vehicles (Natural Gas, Hybrid)Zero Waste to Landfill

Environmental Certification (ISO 14001) EPA SmartWay

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Page 34October 2017

$13.1 Billion in Assets

Pre‐tax Profit $71 Million

Full Service Leasing

Dealer FloorplanRetail Financing

184,000 Vehicles Financed

PACCAR Financial Services – Q3 2017

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Page 35October 2017

PACCAR Financial Services24 Countries on Four Continents

PACCAR Financial Regional Offices

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Page 36October 2017

PACCAR Financial Services Assets

2006 - $9.8 Billion 3Q17 - $13.1 Billion

U.S. & Canada

$6.4 Billion 49%

PacLease$2.3 Billion

17%

Europe$3.0 Billion

23%U.S. &

Canada$5.2 Billion

53%

Europe$2.2 Billion

22%

Australia & Mexico$0.9 Billion

9%

PacLease$1.5 Billion

16%

Australia & Mexico$1.4 Billion

11%

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Page 37October 2017

48,500 Vehicles

200 DAF Dealers

16 European Countries

PACCAR Financial Europe

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

07 08 09 10 11 12 13 14 15 16

Assets € Billions

Assets € Billions

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Page 38October 2017

10

15

20

25

30

35

40

10

15

20

25

30

35

40

07 08 09 10 11 12 13 14 15 16

Trucks000’s

Trucks000’s

PACCAR Leasing

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Page 39October 2017

PACCAR Financial Services Delivers Strong Performance 

0

1

2

3

4

5

6

7

8

0

1

2

3

4

5

6

7

8

90 92 94 96 98 00 02 04 06 08 10 12 14 16

%%

Low 30+ Days Past Due Assets and Pretax Profit

0

50

100

150

200

250

300

350

400

0

2

4

6

8

10

12

14

16

07 08 09 10 11 12 13 14 15 16

Assets $ Billions

Pretax Profit Avg Earnings Assets

Pre-tax Profit$ Millions

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Page 40October 2017

PACCAR Financial Services9/30/17

Finance & Other Receivables $9,549Equipment on Operating Leases 2,836Other Assets 677Total Financial Services Assets $13,062

Commercial Paper & Bank Loans $2,865Term Notes 5,967Deferred Taxes & Other Liabilities 1,452Total Financial Services Liabilities 10,284Equity 2,778Total Liabilities & Equity $13,062

($ Millions)

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Page 41October 2017

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

Strongest Dealer Network

Profitable Financial Services

PACCAR Competitive Advantages

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Page 42October 2017

AppendixReconciliation 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:

Nine Months Ended

(in millions) September 30, 2016

Net Income $ 232.9

Non-recurring European Commission Charge 833.0

Adjusted Net Income (Non-GAAP) $ 1,065.9

Per Diluted Share:

Net Income $ .66

Non-recurring European Commission Charge 2.37

Adjusted Net Income (Non-GAAP) $ 3.03