January 2021 Page 1 Disclosure Regarding Forward-Looking Statements

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January 2021 Page 1 Disclosure Regarding Forward-Looking Statements January 2021 Page 1 Disclosure Regarding Forward-Looking Statements 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 2021 Page 2 PACCAR A Global Technology Company in Commercial Vehicles 2020 Revenues $18.7B 2020 Net Income $1.30B 2020 Avg Dividend Yield 2.5% 82 Years of Consecutive Profitability; Dividend Paid Every Year Since 1941 Truck and Other $13.2B Revenues Aftermarket Parts Premium Quality Light, Medium and $3.9B Revenues Heavy Commercial Vehicles, Diesel and Distribute Aftermarket Parts through Global Alternative Fuel Powertrains Network of over 2,200 Dealerships Parts 21% Financial Services Truck $1.6B Revenues and Finance and leasing portfolio of 203,000 Other Fin Svcs trucks and trailers, with assets of $15.80B 71% 8% January 2021 Page 3 Our Culture PACCAR is a company with a great culture and a bright future. Our focus is on doing things in an ethical and disciplined manner. We make decisions utilizing conservative financial principles and common sense for the long-term benefit of our customers, employees and shareholders. Conservative Highest Operational Long-Term Quality Financial Integrity Excellence Perspective Management January 2021 Page 4 PACCAR’s business segments include Commercial Vehicles, Powertrain, Aftermarket Parts, Financial Services and Information Technology. PACCAR’s premium brands Kenworth, Peterbilt and DAF are the premier light, medium and heavy duty commercial trucks in their markets. Other brands include PACCAR Powertrain, PACCAR Parts, PACCAR Financial, and PACCAR Leasing. January 2021 Page 5 Products 6-16t Vocational >16t • PACCAR’s product investments deliver industry-leading performance and value to our customers • Our products reflect our core brand values of quality, innovation and technology January 2021 Page 6 The integrated PACCAR Powertrain is the most advanced powertrain in the market. The PACCAR MX-13 and MX-11 engines are optimally matched to the advanced PACCAR 12-Speed automated transmission and the efficient 40K tandem drive axle to achieve exceptional performance and fuel economy. The PACCAR MX-13 engine offers 510 hp and 1,850 lb.-ft. of torque and the PACCAR MX-11 engine features 430 hp and 1,650 lb.-ft. of torque. PACCAR designs MX engines to an industry-leading B10 life of one million miles. This means 90% of PACCAR MX- 13 and MX-11 engines are expected to reach one million miles without the need for a major overhaul. In addition to the PACCAR tandem drive axle, Kenworth and Peterbilt offer the PACCAR steer axle. DAF trucks include a range of lightweight and durable PACCAR front and rear axles. January 2021 Page 7 PACCAR Truck Production Over 1.5 Million Trucks Produced 2011 - 2020 PACCAR produced 133,300 trucks in 2020 Units 198.8 (000s) 189.1 200 Brasil 154.7 158.9 142.9 Australia 138.0 140.4 137.1 140.9 133.3 Mexico 150 Canada US 100 Europe 50 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 January 2021 Page 8 PACCAR Excellent Financial Performance Throughout the Business Cycle $ Billions Revenues $ Billions • Reputation for superior operational 28 28 excellence and premium-quality 24 24 20 20 products and services 16 16 12 12 8 8 • Long-term growth in revenues and net 4 4 income reflect increased market share 0 0 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 in North America and Europe, excellent aftermarket parts performance and growth in financial $ Billions Net Income $ Billions services 2.5 2.5 2.0 2.0 1.5 1.5 • Maintain profitability throughout the 1.0 1.0 cycle due to strong cost control 0.5 0.5 discipline and experienced 0.0 0.0 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 management team January 2021 Page 9 Strong Liquidity PACCAR maintains a strong liquidity position to manage through all phases of the business cycle $ Billions PACCAR Liquidity Reserve $ Billions • Strong cash & marketable securities 10 10 position: $5.0 billion as of Dec 31, 2020 8 8 • No manufacturing debt 6 6 • Excellent liquidity reserve for Financial 4 4 Services debt maturities 2 2 • Credit ratings: S&P A+, Moody’s A1 • Finance Company: - - − High quality portfolio secured by truck (2) (2) collateral (4) (4) − Conservative debt to equity ratio of 3.1 (6) (6) as of Dec 31, 2020 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 − Matched-term funding Debt Maturing Next 12 Months Cash & Securities − Currency matched Committed Credit Lines Liquidity Reserve January 2021 Page 10 Best-in-Class Operating Efficiency Commercial Vehicle Segment Operating Margin • PACCAR’s operating margin 12% 12% has been at the top of the industry since 2012, reflecting 9% 9% the premium value of our 6% 6% products and our leadership in operating efficiency. 3% 3% 0% 0% • This is a testament to the outstanding performance of -3% -3% PACCAR’s employees. -6% -6% -9% -9% 11 12 13 14 15 16 17 18 19 20 PACCAR Volvo Daimler Traton Iveco Navistar January 2021 Page 11 Best-in-Class Operating Efficiency Inventory Turns PACCAR’s inventory turns are the highest in the industry, a result of the PACCAR Production System, Lean Manufacturing and Six Sigma 24 24 20 20 16 16 12 12 8 8 4 4 0 0 11 12 13 14 15 16 17 18 19 20 PACCAR Volvo Daimler Traton CNH Navistar January 2021 Page 12 Best-in-Class Operating Efficiency SG&A % of Sales PACCAR’s SG&A as a percentage of sales is much lower than its peer group, reflecting strong financial discipline 16% 16% 12% 12% 8% 8% 4% 4% 0% 0% 11 12 13 14 15 16 17 18 19 20 PACCAR Volvo Daimler Traton CNH Navistar January 2021 Page 13 Net Income per Truck • Net income per truck is Truck Units $/Truck PACCAR’s net income divided by (000s) total truck unit sales. 200 14,000 175 12,250 • Truck sales not only generate 150 10,500 profit from the sale, but also 125 8,750 parts and finance profit. This illustrates the strength of 100 7,000 PACCAR’s business model, 75 5,250 providing the highest quality trucks, aftermarket support and 50 3,500 financing. 25 1,750 0 0 • PACCAR achieved $9,700 net 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 income per truck in 2020. Trucks Net Income per Truck January 2021 Page 14 Capital Allocation Strategy • High ROI Capital Investments • Pay Regular Quarterly and Annual Dividend − Dividend paid every year since 1941 − Total dividends paid approximately 50% of net income for many years − Regular quarterly dividend 10-year annualized growth of 13% • Share Buybacks − $500 Million authorized; $390 Million remaining as of 12/31/2020 • Strategic M&A − Disciplined valuation and screening process − Clear path to value creation • No Unfunded Pension Obligation January 2021 Page 15 Dividends Declared and Stock Repurchases $ Millions CAGR = 8% $ Millions 1,500 1,500 1,200 1,200 900 900 600 600 300 300 0 0 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Dividends Stock Repurchased January 2021 Page 16 Excellent Dividend Yield Average Dividend Yield = 3.5% • PACCAR’s dividend yield, 6% 6% reflects the total quarterly + special dividends declared 5% 5% in the year, divided by the average stock price for the 4% 4% year 3% 3% • PACCAR’s dividend yield has averaged 3.5% over the 2% 2% last ten years 1% 1% 0% 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 January 2021 Page 17 Trucking Moves the Economy 74% of U.S. Freight is Moved by Truck Trucking is the lifeblood of the economy. In the U.S., the economy depends on trucks to deliver ten billion tons of virtually every commodity consumed - 74% of all the freight transported in 2020. 36.9 million commercial trucks, including Rail 3.9 million heavy-duty trucks, move that 11% freight. The percentage of tonnage by mode is stable over time. Truck 74% Pipeline 10% Water 5% January 2021 Page 18 >6t Truck Market >6t Global Truck Market 2000000 2015 – 2.4 Million China 2020 –3.0 Million 1,750 Europe Russia/CIS 1500000 320 270 60 90 1000000 750 500000 North America 0 385 310 Rest of Asia 300299 210 India Africa & South America Middle East 260 120 185 115 125 125 Australia 20 21 PACCAR Truck Assembly 2015 2020 Units in Thousands >16t Truck Market Size Units (000s) Units (000s) 350 350 300 300 2021 Market Forecast Estimate 250 250 U.S. and Canada 250,000 – 280,000 200 200 Europe 250,000 – 280,000 150 150 S. America 100,000 – 110,000 100 100 50 50 0 0 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 US & Canada Europe South America January 2021 Page 20 January 2021 Page 21 PACCAR Strategy Quality Technology Innovation Brand Values Premium Products and Services Profitable Market Share Growth Profitable Growth Geographic Expansion January 2021 Page 22 PACCAR Investing Throughout the Business Cycle Operating Cash Flow • Operating cash flow has averaged $2.8 billion for the $ Billions $ Billions last five years and has grown 9% annually over the 3.0 3.0 2.5 2.5 last 20 years 2.0 2.0 • Strong operating cash flow enables PACCAR to 1.5 1.5 invest in growth throughout the business cycle 1.0 1.0 0.5 0.5 • PACCAR has invested $7.3 billion in
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