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S T A T E M E N T O F C O M P A N Y B U S I N E S S
PACCAR is a global technology company that designs and manufactures premium
quality light, medium and heavy duty commercial vehicles sold worldwide under
the Kenworth, Peterbilt and DAF nameplates. PACCAR designs and manufactures
diesel engines and other powertrain components for use in its own products and
for sale to third party manufacturers of trucks and buses. PACCAR distributes
aftermarket truck parts to its dealers through a worldwide network of Parts
Distribution Centers. Finance and leasing subsidiaries facilitate the sale of
PACCAR products in many countries worldwide. PACCAR manufactures and
markets industrial winches under the Braden, Carco and Gearmatic nameplates.
PACCAR maintains exceptionally high standards of quality for all of its products:
they are well engineered, highly customized for specific applications and sell in
the premium segments of their markets, where they have a reputation for superior
performance and pride of ownership.
C ONTE NTS
Financial Highlights
1
3 Message from the Executive Chairman
4 Message from the Chief Executive Officer
8 PACCAR Operations
26 Financial Charts
27 Stockholder Return Performance Graph
28 Management’s Discussion and Analysis
46 Consolidated Statements of Income
47 Consolidated Statements
of Comprehensive Income
48 Consolidated Balance Sheets
50 Consolidated Statements of Cash Flows
51 Consolidated Statements
of Stockholders’ Equity
52 Notes to Consolidated Financial Statements
91
Management’s Report on Internal Control
Over Financial Reporting
91 Report of Independent Registered Public
Accounting Firm on the Company’s
Consolidated Financial Statements
93 Report of Independent Registered Public
Accounting Firm on the Company’s
Internal Control Over Financial Reporting
94 Market Risks and Derivative Instruments
95 Officers and Directors
96 Divisions and Subsidiaries
F I N A N C I A L H I G H L I G H T S
Truck, Parts and Other Net Sales and Revenues
$ 33,315.5
$ 27,314.3
2023
2022
(millions, except per share data)
1
Financial Services Revenues
Total Revenues
Net Income
Adjusted Net Income*
Total Assets:
Truck, Parts and Other
Financial Services
Financial Services Debt
Stockholders’ Equity
Per Common Share:
Net Income:
Basic
Diluted
Adjusted Diluted *
Cash Dividends Declared Per Share
1,811.9
35,127.4
4,600.8
5,047.2
19,859.5
20,963.9
14,234.5
15,878.8
1,505.4
28,819.7
3,011.6
16,095.9
17,179.6
11,471.6
13,167.1
$
8.78
$
5.76
8.76
9.61
4.24
5.75
2.80
* See Reconciliation of GAAP to Non-GAAP Financial Measures on Page 42.
R E V E N U E S
billions of dollars
N E T I N C O M E
billions of dollars
S T O C K H O L D E R S ’ E Q U I T Y
billions of dollars
36
4.8
16%
16
27
3.6
12%
12
18
2.4
9
0
1.2
0.0
8%
4%
0%
8
4
0
14
15
16
17
18
19
20
21
22
23
14
15
16
17
18
19
20
21
22
23
14
15
16
17
18
19
20
21
22
23
(cid:81) Revenues
(cid:81) Net Income
(cid:81) Stockholders’ Equity
Return on Revenues (percent)
Return on Equity (percent)
36
27
18
9
0
40%
30%
20%
10%
0%
T O O U R S H A R E H O L D E R S
PACCAR celebrated 118 years of success and delivered record revenues of $35.13 billion and record net income of
$4.60 billion to its shareholders in 2023. The PACCAR team did an excellent job managing record production at the
3
factories and delivering record aftermarket parts to our dealers and customers. This is the 85th consecutive year of
earning a net profit — a notable achievement considering the cyclicality of the capital goods market.
PACCAR achieved very good financial results by continuing to focus on the premium segment of our industry.
The company has enhanced its leadership in developing products and services that reflect the rapidly changing world
with the development of e-commerce, zero emissions vehicles and connected services.
The company is a recognized environmental leader and is partnering with industry groups to reduce the effects of
climate change. In addition to the production of the company’s battery-electric truck models, PACCAR continues to
emphasize “zero waste to landfill,” solar power generation, water recycling and increasing the recyclable material
content in its trucks.
PACCAR’s excellent year in 2023 is due to many positive factors, including the performance of the new Kenworth
and Peterbilt heavy- and medium-duty vehicles, and DAF’s award-winning XG, XD, XF and XB product range that
delivers operational excellence and luxury for its customers. These truck models were complemented by the
company’s strong business performance in every geographic region. PACCAR’s new trucks have redefined product
quality and operating performance for our industry. PACCAR Parts and PACCAR Financial Services delivered
excellent profits in 2023 by deploying innovative technologies that bundle services for our customers. PACCAR Parts
implemented new sales programs to a growing population of connected PACCAR vehicles. PACCAR Parts is building
a new Parts Distribution Center in Germany and opened additional TRP stores. PACCAR Financial Services,
including PacLease, had a great year, generating strong new and used truck business in all major markets. PACCAR’s
Information Technology Division unveiled a range of programs to increase annual revenue streams generated from
e-commerce and connected vehicle subscriptions. PACCAR benefits from its global diversification, industry leading
independent dealer organizations and increased investments in all segments of the business.
PACCAR’s superb credit rating of A+/A1 results from consistent profitability, a strong balance sheet and excellent
cash flow. Our shareholders enjoyed excellent returns of 55% in 2023, with annual dividend growth of 15.5% in the last
five years including a $3.20 per share extra cash dividend paid in early 2024.
PACCAR is committed to a strong, diverse and inclusive culture and the company’s excellent financial results
reflect its commitment to premium quality products and services. I would like to thank our employees for their
innovation and dedication, their many ideas and suggestions to enhance our daily operations and their personal
outreach to local communities.
M A R K C . P I G O T T
E xecutive Chairman
Februar y 21, 2024
T O O U R S H A R E H O L D E R S
PACCAR had an outstanding year in 2023, delivering a record 204,200 new trucks and generating record revenues and
4
profits as well as industry leading profit margins. Revenues increased to $35.13 billion and net income of $4.60 billion was
the highest in the company’s history. The after-tax return on revenue increased to 13.1%. The company’s results reflect the
performance of PACCAR’s outstanding employees who provide our customers with the highest quality, most efficient and
most innovative trucks and transportation solutions in the industry.
PACCAR has earned an annual net income for 85 consecutive years due to the company’s industry leading trucks and
powertrains, excellent aftermarket parts and financial services businesses and continued technology leadership. PACCAR’s
financial strength enabled the company to invest $1.11 billion in capital projects and research and development to expand its
range of trucks, enhance its manufacturing operations and grow its global aftermarket parts and financial services businesses.
Kenworth celebrated its 100th anniversary in 2023 with special editions of its flagship T680 and the W990. Peterbilt
furthered its design leadership with the introduction of the new Model 589, the successor to the iconic Model 389. DAF
expanded its new range of trucks in Europe with the introduction of the DAF XB medium-duty trucks, including the zero
emissions XB Electric model. PACCAR continues to develop industry leading advanced vehicle technologies in the areas
of zero emissions, connected services and autonomous vehicles.
PACCAR Parts achieved record sales of $6.41 billion and record pre-tax profits of $1.70 billion. PACCAR’s A+/A1
credit rating supported PACCAR Financial Services’ strong pre-tax profits of $540 million, including $7.21 billion of new
loan and lease volume.
PACCAR’s strong financial performance generated an industry leading after-tax return on beginning stockholders’
equity of 35% in 2023. Year-end stockholders’ equity was a record $15.88 billion. PACCAR’s financial performance has
enabled the company to declare $10.5 billion in dividends during the last ten years.
INVESTING FOR THE FUTURE — PACCAR’s consistently strong profits and balance sheet have allowed the company to
invest $7.8 billion in capital projects and research and development over the last decade. These investments have
supported the development of advanced new vehicle models, new manufacturing and distribution facilities and innovative
technologies. PACCAR’s investments create transportation solutions that provide our customers with the highest levels of
quality, safety and reliability, as well as the lowest total cost of operation.
In 2023, capital investments were $698 million and research and development expenses were $411 million. These
investments enabled PACCAR’s truck factories to build zero emissions vehicles, increase global production capacity and
implement advanced technologies to enhance manufacturing efficiency, including expanded use of automated guided
vehicles.
PACCAR is a leader in the development of battery-electric vehicles. Kenworth, Peterbilt and DAF delivered 270
battery-electric trucks to customers and have nine zero emissions vehicle models in production. PACCAR announced that
it will participate in a U.S.-based joint venture that will manufacture high performing lithium-iron-phosphate (LFP)
battery cells designed specifically for its electric trucks. Production of the battery cells is expected to begin in 2027.
PACCAR is also a leader in developing hydrogen energy solutions, including the development of hydrogen combustion
and fuel cell vehicles. In 2023, PACCAR progressed toward low volume production of hydrogen fuel cell electric vehicles
in a partnership with Toyota.
Peterbilt, Kenworth and DAF continued to enhance their industry leading connected services offerings that provide
valuable vehicle performance data to our customers, while also providing PACCAR with a steady flow of revenue and
profit. To prepare for the future, PACCAR continued its development of a proprietary autonomous vehicle platform.
PACCAR’s three global embedded software development centers and global connected truck teams are providing
proprietary, customer-focused solutions for all parts of the business.
5
CONTINUOUS IMPROVEMENT — Six Sigma, data analytics, machine learning, Industry 4.0 and lean process development
are integrated into all business activities at PACCAR as well as at many of its suppliers, dealers and customers. These tools
enable the company to continuously enhance the creation of state-of-the-art new product designs, customer services and
manufacturing processes. Thousands of PACCAR employees and many dealers and suppliers have been trained in the use
of Six Sigma tools and have delivered billions of dollars in savings in all areas of the company.
INFORMATION TECHNOLOGY — PACCAR’s Information Technology Division (ITD) is an industry leader in innovative
digital technology solutions that enhance the quality of PACCAR business processes and products. These solutions provide
secure, customized products for customers, dealers and suppliers. In 2023, PACCAR’s state-of-the-art connected services
platform, PACCAR Connect, was installed in over 145,000 PACCAR vehicles. This configurable system consists of
proprietary hardware and software that provide robust data security, over-the-air software updates and advanced fleet
management tools. The innovative system enables customers to optimize vehicle performance and cost-effectively integrate
their existing fleet management systems and applications. The ITD team maintains a rigorous focus on ensuring
PACCAR’s leadership in vehicle and infrastructure cybersecurity.
TRUCKS — U.S. and Canadian Class 8 truck industry retail sales in 2023 were 297,000 units and the Mexican market
totaled 34,400 units. European industry 16+ tonne truck registrations were 343,000 units. PACCAR delivered 204,200
trucks in 2023 as customers benefited from the premium performance of PACCAR’s new vehicles.
DAF’s European 16+ tonne market share was a good 15.6%. Peterbilt and Kenworth’s Class 8 retail sales share in the
U.S. and Canada was a healthy 29.5%.
Industry Class 6 and 7 truck retail sales in the U.S. and Canada were 105,300 units. The European 6 to 16-tonne
market was 46,800 units. PACCAR’s market share in the U.S. and Canada medium-duty truck segment was 14.5%. DAF’s
share of the European medium-duty truck market was 9.1%. In 2023, PACCAR delivered 30,400 medium-duty trucks to
its customers, more than 6,000 above 2022.
DAF Brasil celebrated its 10th anniversary, increased its 16+ tonne market share from 6.9% to 10.2% and delivered
more than 8,600 trucks in 2023.
PACCAR Mexico achieved record sales, production volume and profits and had industry leading heavy-duty market
share of 36.0%. PACCAR Mexico launched the DAF brand to the Mexican market in 2023 and continued to make
significant investments in production capacity and efficiency improvements to support its future growth.
PACCAR Australia achieved record sales and production volume, with combined Kenworth and DAF heavy-duty
market share of 25.5%, and delivered its 84,000th vehicle. PACCAR Australia continued to make investments in production
capacity and is expanding the PACCAR Parts Australia distribution center.
A tremendous team effort by the company’s employees and dealer network contributed to industry leading truck, parts
and other gross margins of 19.3%. New technology, process improvements, data analytics and partnership with suppliers
enabled PACCAR to establish industry leading factory and distribution center safety and quality.
PACCAR’s innovation and manufacturing expertise continued to be recognized as the industry leader in 2023. The
DAF XF was awarded “Green Truck 2023” as Europe’s most fuel-efficient long-haul tractor and the Kenworth Australia
K220 was recognized as the “Truck of the Year Australasia” at the 2023 Brisbane Truck Show. PACCAR’s manufacturing
teams continued to integrate the latest Industry 4.0 technologies and data analytics tools throughout its global operations to
6
drive accelerated efficiency and reliability enhancements.
PACCAR PARTS — PACCAR Parts increased annual revenues by 11% to a record $6.41 billion and achieved record pre-tax
profits of $1.70 billion. Dealers and customers benefited from innovative technology solutions, including e-commerce,
managed dealer inventory and global fleet service programs that offer online purchasing, national pricing and centralized
billing. PACCAR Parts is the primary source for aftermarket parts and services for PACCAR vehicles and also offers its
TRP-branded parts for all makes of trucks, trailers and buses. PACCAR dealers expanded TRP aftermarket parts retail
stores to 300 locations in 45 countries. Over seven million heavy-duty trucks operate in North America and Europe. This
large vehicle parc, combined with more than 352,000 PACCAR MX engines installed in Peterbilt and Kenworth trucks in
North America, creates excellent demand for parts and service and moderates the cyclicality of truck sales.
To further enhance its logistics performance for dealers, PACCAR Parts opened 62 new TRP Parts stores and began
construction on a new 240,000 square-foot Parts Distribution Center in Massbach, Germany, scheduled to open in 2024.
FINANCIAL SERVICES — PACCAR Financial Services’ (PFS) conservative business approach, complemented by PACCAR’s
superb credit rating of A+/A1, excellent business growth and strong dealer network, enabled PFS to achieve a pre-tax profit
of $540 million, the second-best year in the company’s history. PACCAR issued $2.9 billion in medium-term notes at
attractive rates during the year. PFS has operations covering 26 countries on four continents. The global breadth of PFS and
its rigorous credit application process support a portfolio of 233,000 trucks and trailers, with total assets of $21.0 billion.
PACCAR Financial and PACCAR Leasing are the preferred funding sources for DAF, Peterbilt and Kenworth trucks in the
markets where PFS operates. PFS opened a new retail used truck center in Madrid, Spain and now has thirteen strategically
located centers around the world. PFS successfully sold over 12,500 premium DAF, Kenworth and Peterbilt used trucks in 2023.
PACCAR Leasing (PacLease) is one of the largest full-service truck rental and leasing operations in North America,
Germany and Australia. PacLease placed over 8,950 new PACCAR vehicles in service. PacLease grew its fleet to over 44,200
vehicles at the end of 2023. PacLease supports the growth of PACCAR’s zero emissions vehicle sales by offering customers
the opportunity to rent or lease battery-electric trucks and battery chargers.
ENVIRONMENTAL LEADERSHIP — PACCAR is a global environmental leader. PACCAR discloses its comprehensive
sustainability program in the environmental report published by CDP, which evaluates and scores companies on how
effectively they are addressing climate change and the environment. PACCAR earned an “A-” score in 2023, which places it
in the Leadership tier of the over 21,000 reporting companies from around the world. For the past nine years, PACCAR has
earned an “A” or “A-” score. PACCAR is ranked in the top 16% of peer companies by the S&P Global Corporate
Sustainability Assessment for its environmental, social and governance practices. PACCAR, in partnership with the Science
Based Targets Initiative (SBTi), has committed to vehicle emissions reductions of 25% and 35% from internal operations by
2030 and is on schedule to meet those objectives. PACCAR’s manufacturing facilities have earned ISO 14001 environmental
certification and continued to enhance their zero-waste-to-landfill programs during the year.
PACCAR is a leader in diversity and inclusion and PACCAR was again recognized as a top workplace for women by the
Women in Trucking Association.
A LOOK AHEAD — PACCAR employees enable the company to distinguish itself as a global quality leader in trucks,
technology, financial services and the aftermarket parts business. PACCAR’s strong internal processes, engineering
capabilities and relationships with suppliers contribute to its excellent results in global markets.
The economic outlook for 2024 is modest GDP growth in North and South America and Europe. Based on continued
freight activity, and the customer benefit of replacing older vehicles with the new fuel-efficient DAF, Kenworth and
7
Peterbilt trucks, we forecast 2024 truck markets to be strong. The U.S. and Canada Class 8 truck market in 2024 is
projected to be in the range of 260,000–300,000 vehicles. Retail sales for Class 6-7 trucks are expected to be between
70,000–80,000 vehicles. The European 16+ tonne truck market is also forecast to be in the range of 260,000–300,000
vehicles and medium-duty trucks in the range of 36,000–40,000 units. The South American market is expected to be in
the range of 105,000–115,000 units.
PACCAR Parts’ best-in-class technology and services, combined with the large, aging vehicle parc and overall freight
markets, should provide good demand for the company’s aftermarket parts business. PACCAR Financial is expected to
continue to perform well due to its high quality portfolio and good used truck business.
PACCAR provides the industry’s highest quality and efficient vehicles, operates state-of-the-art factories and delivers
superb customer service in parts and financial services. PACCAR continues to invest in the development of aerodynamic
trucks, next generation clean diesel and zero emissions powertrains, advanced driver assistance systems, autonomous
driving technologies, truck connectivity and data analytics.
PACCAR is well positioned to continue generating excellent results for its customers and shareholders.
P R E S T O N F E I G H T
Chief E xecutive Officer
Februar y 21, 2024
PACCAR Executive Operating Committee
First Row Left to Right: Harald Seidel, Paulo Bolgar, Preston Feight, Darrin Siver, Jason Skoog, Mike Walton.
Second Row Left to Right: Lily Ley, Harry Wolters, Kevin Baney, Mike Dozier, Harrie Schippers, Todd Hubbard, Laura Bloch,
John Rich, Brice Poplawski.
8
K E N W O R T H T R U C K C O M P A N Y
Kenworth celebrated its 100th anniversary in 2023 and introduced two special edition
models – the T680 Signature Edition and the W900 Limited Edition. Kenworth
9
achieved heavy-duty market share of 14.8 percent and delivered 54,650 trucks in 2023.
Kenworth commemorated its centennial with the introduction of two special edition trucks – the T680
Signature Edition and the W900 Limited Edition. A T680 Signature Edition traveled across the United States and
Canada with a 100th anniversary trailer showcasing Kenworth’s history.
Kenworth introduced the zero emissions T680 fuel cell electric vehicle, which provides an operating range up
to 450 miles. It can be refilled in 20 minutes for extended regional haul applications.
Kenworth increased production of its T680E, K270E and K370E battery-electric
vehicles that assist customers to achieve their operational and environmental goals.
Kenworth also launched the medium-duty T380V and T480V vocational models to
serve municipal and urban markets.
Kenworth expanded its suite of advanced technologies with the launch of the
Kenworth Digital Mirror System for the flagship T680. The aerodynamic mirrors
increase fuel economy by up to 1.5 percent and enhance driver visibility by
providing a wider view around the truck.
Kenworth added 45,000 vehicles to TruckTech+, Kenworth’s innovative connected
services platform, increasing the number of connected vehicles to 125,000.
TruckTech+ delivers real-time vehicle and engine information to fleet managers and
Kenworth dealers to optimize uptime and productivity.
Kenworth introduced the PACCAR TX-18 Pro transmission for demanding off-road applications.
The TX-18 Pro’s advanced calibrations and superior durability deliver best-in-class performance for the T880,
T880S and W990 vocational models. Kenworth installed the efficient PACCAR TX-8 transmission in 15 percent
of its medium-duty vehicles in 2023.
Kenworth’s Chillicothe factory completed construction of its 105,000 square-foot expansion that increases the
plant’s manufacturing capacity and earned the Ohio Environmental Protection Agency’s Silver Award for its
commitment to environmental excellence. The Chillicothe facility produced its 750,000th Kenworth truck since
opening in 1974.
The Kenworth dealer network grew to 480 locations, including 282 PremierCare Gold Certified dealerships. Dealers
invested a record $417 million to enhance their world-class facilities throughout the United States and Canada.
A Kenworth T680 Signature Edition transported the U.S. Capitol Christmas Tree for the 2023 tree-lighting
ceremony. For the eighth year in a row, the “Transition Trucking: Driving for Excellence” program awarded a
Kenworth T680 to America’s top military veteran who transitioned from active duty to driving for a commercial
fleet. The Women in Trucking Association recognized Kenworth as a “Top Company for Women to Work for in
Transportation” for the sixth consecutive year.
Since its beginning in 1923 in the rugged forests of the Pacific Northwest, Kenworth has designed and manufactured trucks to operate
in the world’s most challenging conditions. The 100th anniversary W900 Limited Edition exemplifies Kenworth’s core values of quality,
innovation and technology integrated into The World’s Best® trucks.
10
D A F T R U C K S
DAF Trucks N.V. celebrated 95 years in 2023 and built 69,800 trucks. DAF opened its
electric truck assembly plant in Eindhoven, enhancing DAF’s environmental leadership.
11
DAF manufactured a record 69,800 trucks in 2023. DAF opened a 54,000 square-foot electric truck assembly
plant in Eindhoven, the Netherlands. The state-of-the-art facility produces zero emissions DAF XD and XF
Electric vehicles with driving ranges up to 300 miles. DAF also introduced a new range of XB urban distribution
vehicles, including the XB Electric vehicle designed for city delivery.
DAF produced the 50,000th New Generation truck in 2023, emphasizing the success of the award-winning XD,
XF, XG and XG+ vehicles. DAF expanded the New Generation DAF range to include tandem axle tractors and
rigids for demanding vocational applications. DAF is the leading truck manufacturer to utilize new European
mass and dimension regulations that allow a more aerodynamic and spacious vehicle design.
DAF achieved market share of 15.6 percent in the 16+ tonne segment with market leadership in the United
Kingdom, the Netherlands, Belgium, Hungary and Bulgaria. DAF is the largest import brand in Germany.
DAF earned the “Fleet Manufacturer of the Year” award at the 2023 U.K. Fleet News Awards in recognition of
DAF’s excellent support for customers transitioning to electric vehicles. The versatile DAF XD and LF
distribution trucks were also honored as “Best Rigid Trucks.”
The DAF XF earned awards from leading European trade
magazines, including: “Green Truck 2023” from
VerkehrsRundschau and Trucker; “Drivers Choice” from Truck
& Trailer Welt; and the “European Transport Award for
Sustainability 2024” from Transport magazine.
DAF sold more than 7,500 trucks outside the EU in 2023
and delivered a record number of vehicles in Australia. DAF introduced updated PACCAR MX-11 and MX-13
engines for coaches and buses at the Busworld exhibition in Brussels. DAF sold over 2,800 engines to leading
coach, bus and specialty vehicle manufacturers worldwide.
PACCAR Parts’ TRP all-makes aftermarket parts program consists of over 84,000 truck, bus and trailer parts
and is supported by DAF’s worldwide dealer network. DAF dealers opened 27 TRP stores in Europe, Asia, Africa
and South America, increasing the total to 112 in those markets.
PACCAR Parts began construction of a 240,000 square-foot Parts Distribution Center (PDC) in Massbach,
Germany, which will open in 2024. The new Massbach PDC will enhance parts delivery to dealers and customers
in the region.
DAF signed its 250,000th DAF MultiSupport service contract in 2023. This premium service maximizes
uptime by tailoring truck maintenance to customers’ operational goals. DAF’s global dealer network opened 44
new locations throughout Europe, South America, Africa and Oceania, expanding the worldwide network to
over 1,100 locations.
The DAF XB and XB Electric deliver outstanding performance in urban and regional distribution applications. The XB Electric provides a zero
emissions driving range up to 220 miles.
12
P E T E R B I L T M O T O R S C O M P A N Y
Peterbilt launched the new Model 589, combining iconic Peterbilt design with advanced
technologies and a modern interior. Peterbilt achieved a 14.7 percent Class 8 market
13
share and delivered its 750,000th truck from its Denton, Texas factory.
Peterbilt introduced the new Model 589 in 2023, continuing Peterbilt’s legacy of traditionally styled trucks for
on-highway and vocational applications. The Model 589 features classic Peterbilt design with an aluminum hood
and external stainless steel air cleaners, a 15-inch customizable digital display and advanced driver assistance
systems. The spacious 2.1-meter cab and best-in-class interior deliver industry leading ergonomics to enhance
productivity and driver comfort. The Model 589 Legendary package offers Peterbilt’s original script logo from
1939. Peterbilt produced the 100,000th Model 389 in 2023, and the limited-edition Model 389X generated
unparalleled demand.
Peterbilt achieved 14.7 percent Class 8 market share in 2023.
Medium-duty market share increased to 7.7 percent, driven by
strong customer demand for the new medium-duty lineup.
Peterbilt also earned an 18.9 percent vocational/refuse market
share, led by the rugged Model 567 and the Low Cab Forward
Model 520.
Peterbilt leads the industry with a portfolio of zero emissions
trucks for multiple applications. The Models 579EV, 520EV and 220EV feature advanced battery-electric
technology and have hauled freight for over 1,000,000 miles.
The Denton, Texas factory produced the 750,000th Peterbilt truck since the factory opened in 1980. Peterbilt
celebrated the 30th anniversary of its division headquarters in Denton. The Denton plant added automated guided
vehicles to its cab trim line to enhance operational efficiency.
Peterbilt announced upgrades to its SmartLINQ connected services platform and the PACCAR Solutions
portal. New features, scheduled to launch in 2024, include real-time fleet data dashboards and over-the-air
vehicle parameter updates to optimize customer efficiency and enhance uptime.
Peterbilt grew its sales and service network to a record 432 locations throughout North America, including 35
TRP Stores. 132 locations are designated as Platinum Service Centers, delivering expanded service capacity and
driver amenities. The Peterbilt dealer network invested a record $280 million in new and upgraded facilities and
dealers added 170 mobile service units to reach a record total of 970.
Peterbilt Technician Institute (PTI) has provided highly trained technicians to the Peterbilt dealer network for
ten years. PTI graduated its 1,000th technician in 2023, added a campus in Nashville, Tennessee and expanded its
outreach to transitioning military veterans.
The new Peterbilt Model 589 inherits the iconic legacy of Peterbilt’s traditionally styled trucks. The Model 589 provides drivers with
modern amenities and ergonomics, and is available in day cab and sleeper cab configurations with a wide range of fuel-efficient
diesel engines.
P A C C A R A U S T R A L I A
PACCAR Australia achieved record truck production and delivered its 84,000th
14
vehicle in 2023. PACCAR Australia’s Kenworth and DAF vehicles operate in one of
the world’s most demanding environments.
PACCAR Australia produced a record 4,600 Kenworth and DAF trucks in 2023, including its 1,300th locally
assembled DAF vehicle. PACCAR Australia achieved a combined Kenworth and DAF market share of 25.5
percent. The new Kenworth K220 earned the inaugural “Truck of the Year Australasia” award at the 2023
Brisbane Truck Show.
PACCAR Parts Australia earned record revenue in 2023. PACCAR Parts Fleet Services, which provides fleet
customers with national pricing and centralized billing, grew by 49 percent and the TRP all-makes aftermarket
business expanded to 16 locations across Australia and New Zealand.
PACCAR Financial grew its portfolio to a record A$2.1 billion. PacLease Australia delivers outstanding
full-service lease, rental and contract maintenance services and is the leading Class 8 leasing company in Australia.
The 97 Kenworth and DAF dealer locations in Australia, New Zealand and Papua New Guinea invested A$45
million in capital projects in 2023.
Kenworth and DAF trucks are renowned in Australia for their reliability and durability in the most challenging operating conditions.
The rugged Kenworth T610SAR combines traditional styling with advanced powertrain technologies to deliver best-in-class
performance and efficiency.
P A C C A R M E X I C O
PACCAR Mexico increased its market leadership in 2023, achieving a 36.0 percent
Class 8 share, and introduced the DAF brand to the Mexican market. PACCAR
15
Mexico has manufactured over 370,000 vehicles since its founding in 1959.
PACCAR Mexico produces a broad range of Kenworth and Peterbilt Class 5-8 vehicles for North, Central and
South America in its state-of-the-art 590,000 square-foot production facilities in Mexicali, Mexico. PACCAR
Mexico produced 18,400 vehicles in 2023, including over 5,400 Kenworth and Peterbilt trucks exported to the U.S.
and Canadian markets.
PACCAR Mexico launched the DAF brand in Mexico with an exciting display of XF and CF models at the
2023 Expo Transporte truck show. DAF’s award-winning cab over engine (COE) vehicles complement Kenworth’s
conventional trucks and provide customers expanded offerings to meet their business needs. Kenworth and DAF
deliver best-in-class quality, fuel efficiency and driver comfort to customers in Mexico.
PACCAR Financial Mexico and PacLease Mexicana financed over 50 percent of Kenworth truck retail sales in
Mexico. PACCAR Mexico’s 146 dealer locations and 1,095 service bays offer the most extensive parts and service
network in the country. PACCAR Mexico earned an award from the Employers Confederation of Mexico
(COPARMEX) in recognition of its exemplary service to the community.
PACCAR Mexico has produced the most iconic and reliable trucks in Mexico for over 60 years. The Kenworth T880 is one of
the most versatile heavy-duty trucks in the industry, delivering excellent performance in vocational and on-highway
applications.
L E Y L A N D T R U C K S
Leyland Trucks – the United Kingdom’s leading truck manufacturer – celebrated 25
16
years as a PACCAR company and delivered a record 20,300 DAF vehicles to
customers in Europe, Asia, Australia, the Americas and the Middle East.
Leyland produces the complete range of DAF vehicles for right- and left-hand drive markets in its advanced
710,000 square-foot manufacturing facility. The state-of-the-art production system incorporates automated
guided vehicles, a robotic chassis paint facility and sophisticated wheel alignment technologies. Leyland has
produced 375,000 DAF vehicles for customers around the world since becoming a PACCAR company in 1998.
DAF introduced the new XB medium-duty vehicle for city and regional distribution in 2023. The DAF XB is
available in day cab and sleeper configurations and features best-in-class maneuverability, a customizable 12-inch
digital display and connected services through DAF Connect. The new range includes the XB Electric vehicle,
with a zero emissions driving range of over 200 miles, and the XBC for urban construction applications. DAF is
the first manufacturer in Europe to produce a 12-tonne battery-electric vehicle.
DAF was the market leader in the U.K. for the 28th consecutive year and achieved a 30 percent market share.
DAF won the “Fleet Manufacturer of the Year” award at the prestigious U.K. Fleet News Awards.
Leyland manufactures the full DAF product range of LF, CF, XB, XD, XF, XG and XG+ models for right- and left-hand drive markets. The
new XB delivers outstanding performance in a variety of urban and vocational applications.
P A C C A R G L O B A L G R O W T H
PACCAR sells DAF, Kenworth and Peterbilt trucks and parts to customers in 95
countries on six continents. DAF Brasil celebrated its 10th anniversary and PACCAR
17
expanded its business in South America, Asia and Africa in 2023.
DAF Brasil produced a record 8,600 trucks in 2023 as it celebrated a decade of operation. DAF Brasil achieved a
record 10.2 percent market share in the 16+ tonne segment and has over 34,000 trucks in service. DAF introduced
new PACCAR engines to meet Brasil EURO 6 emissions regulations, increasing fuel economy by up to eight percent.
DAF dealers in Brasil have invested over $134 million in 61 service locations, including eleven TRP stores, and
opened the largest dealership in South America with 57 service bays. PACCAR expanded its South American
business by delivering DAF trucks to Peru. DAF delivered a record number of trucks in Australia and will begin
sales of the New Generation DAF vehicles for long-distance applications in 2024.
PACCAR sold over 2,800 PACCAR MX and PX engines to leading manufacturers of coaches, buses and specialty
vehicles worldwide. DAF introduced new PACCAR MX-11 and MX-13 engines for coach and bus applications at the
Busworld exhibition in Brussels, Belgium. The PACCAR MX-11 was selected to power articulated hybrid buses in
Rome, Italy. The PACCAR India Technical Center provides information technology, engineering and purchasing
expertise to PACCAR operations worldwide.
The DAF assembly facility in Taiwan builds the full range of DAF models. DAF Brasil has produced over 34,000 trucks as it celebrates
ten years of operation. PACCAR engineering teams in India support the PACCAR truck divisions around the world. PACCAR engines
power buses throughout Europe and Asia.
P A C C A R P A R T S
PACCAR Parts celebrated its 50th anniversary with a record pre-tax profit of $1.70
18
billion and record worldwide revenue of $6.41 billion in 2023. PACCAR Parts delivered
3.0 million parts shipments to over 2,300 DAF, Kenworth, Peterbilt and TRP locations.
PACCAR Parts celebrated 50 years of supporting customer uptime with industry leading aftermarket
transportation solutions. PACCAR Parts’ 365 Customer Experience Center and Fleet Services program provide
exceptional customer support to 2,400 commercial fleets operating 1.4 million vehicles.
PACCAR Parts’ data analytics tools use connected truck data and machine learning to increase part
availability and optimize dealer inventory. PACCAR Parts’ global e-commerce program offers 24/7 access to
1.7 million aftermarket parts. PACCAR Parts’ successful TRP aftermarket brand provides parts for all makes and
models of trucks, trailers, buses and engines by offering over 157,000 part numbers. In 2023, TRP aftermarket
parts retail stores expanded to a record 300 locations in 45 countries.
PACCAR Parts operates 18 Parts Distribution Centers (PDCs) globally, delivering industry leading part
availability. PACCAR Parts began construction of a new PDC in Massbach, Germany, which is planned to open
in 2024. The Massbach PDC will increase PACCAR’s global capacity to more than 3.6 million square feet of
warehouse space.
PACCAR Parts celebrated the opening of its Louisville, Kentucky PDC in 2023. PACCAR Parts’ 18 global distribution centers use industry
leading technology, including voice-directed picking, to deliver best-in-class customer service. TRP aftermarket parts retail stores
expanded to a record 300 locations.
P A C C A R P O W E R T R A I N
PACCAR MX engines are installed in DAF 16+ tonne vehicles and Kenworth and
Peterbilt Class 8 vehicles in North America. PACCAR Powertrain introduced a
19
medium-duty electric powertrain in Europe.
PACCAR is a premier diesel engine manufacturer, with over 800,000 square feet of production facilities in
Columbus, Mississippi, Eindhoven, the Netherlands and Ponta Grossa, Brasil. PACCAR’s MX-11 and MX-13
engines provide customers with excellent fuel economy and superior durability. PACCAR has delivered over two
million PACCAR MX engines, with the Columbus engine facility manufacturing over 344,000 engines since
opening in 2010. PACCAR has two world-class research and development centers, operating 47 advanced engine
test cells and a climatic chassis dynamometer to enhance engine and powertrain design.
PACCAR’s new EX electric motors deliver smooth power and increase the zero emissions vehicle driving
range to up to 300 miles on a single charge. PACCAR EX electric motors are installed in New Generation DAF
XF, XD and XB battery-electric vehicles.
PACCAR introduced a new series of PACCAR MX-11 and MX-13 engines specifically designed for coaches
and buses. The PACCAR engines feature state-of-the-art innovations to deliver outstanding performance for
transit operations.
PACCAR engine factories are technology leaders in commercial vehicle powertrain production. PACCAR Powertrains are installed in
DAF, Kenworth and Peterbilt vehicles worldwide, where they have earned a reputation for superior reliability, durability and operating
efficiency.
P A C C A R F I N A N C I A L S E R V I C E S
PACCAR Financial Services (PFS) supports the sale of PACCAR trucks worldwide.
20
PFS earned excellent pre-tax profits of $540 million and achieved retail market
share of 24.0 percent in 2023.
The PFS portfolio is comprised of 233,000 trucks and trailers, with record total assets of $21.0 billion.
PACCAR’s excellent balance sheet, complemented by its industry leading A+/A1 credit rating, enabled PFS to
issue $2.9 billion in three- and five-year medium-term notes in 2023. PFS supports the sale of Kenworth,
Peterbilt and DAF trucks in 26 countries on four continents. PFS sold 12,500 pre-owned PACCAR trucks
worldwide in 2023 by leveraging its network of 13 used truck centers.
PACCAR Financial Corp. (PFC) financed 71 percent of dealers’ new truck inventory and 15.1 percent of
Kenworth and Peterbilt Class 8 trucks sold in the U.S. and Canada. PFC launched a next generation business
system to further enhance its industry leading efficiency in generating, funding and servicing retail loans and
leases.
PACCAR Financial Brasil supports the growth of DAF Brasil by providing retail financing for 41 percent of
new DAF trucks sold in Brasil in 2023. PACCAR Financial Europe has $4.8 billion in assets and provides a broad
array of financial services to DAF dealers and customers in 18 European countries.
PACCAR Financial facilitates the sale of premium-quality new and used PACCAR vehicles worldwide by
offering a full range of financial products and utilizing technology to streamline financing and leasing for
dealers and customers.
P A C C A R L E A S I N G C O M P A N Y
PACCAR Leasing (PacLease) achieved its 34th consecutive year of profitability with a
record worldwide fleet of 44,200 Kenworth, Peterbilt and DAF vehicles.
21
PacLease offers premium Kenworth, Peterbilt and DAF vehicles for full-service lease and rental customers.
PacLease is an industry leader in providing innovative and complete transportation solutions to fleet customers.
PacLease delivered over 8,950 Kenworth, Peterbilt and DAF vehicles in North America, Europe and Australia in
2023 and expanded its global network to a record 632 locations.
PacLease delivered its 7,000th vehicle equipped with the PACCAR Integrated Powertrain, which combines the
fuel efficiency and reliability of the PACCAR MX engine and the durability of the PACCAR Transmission.
PACCAR MX engines power over 55 percent of the new PacLease Class 8 trucks purchased in 2023. PacLease’s
Customized Fleet Services program provides tailored maintenance and fleet management services to over 5,300 vehicles.
PacLease Mexico is the largest Class 8 full-service lease provider in Mexico with a fleet of 7,300 trucks and
trailers. PacLease Europe operates a fleet of over 2,750 DAF trucks and trailers. PacLease Australia grew its fleet
by ten percent and has the largest network coverage in the country with 27 locations.
The Women in Trucking Association recognized PacLease as a “Top Company for Women to Work for in
Transportation.”
PacLease provides its customers with innovative transportation solutions and premium-quality PACCAR vehicles. PacLease
offers new Peterbilt, Kenworth and DAF trucks with the PACCAR engine and powertrain.
P A C C A R T E C H N I C A L C E N T E R S
PACCAR Technical Centers’ world-class engineering, analysis and validation capabilities
22
accelerate the deployment of advanced technologies such as electric, autonomous and
connected vehicles.
PACCAR’s Technical Centers in Europe, North America and India provide technical leadership in product
development, validation and innovation. Engineers, scientists and technicians with expertise in powertrain and
vehicle development accelerate the launch of new technologically advanced products.
The Technical Center in Mount Vernon, Washington and its project partners successfully completed the U.S.
Department of Energy SuperTruck 2 program, which demonstrated record vehicle and engine efficiency.
PACCAR earned a SuperTruck grant to further develop fleet electrification, SuperTruck 3.
Technical Center computer simulation tools, laboratories and test tracks are used to develop and validate
emerging technologies for PACCAR products, including hydrogen fuel cell and electric powertrains, diesel and
hydrogen combustion engines, autonomous driving, and connectivity to other road users and surrounding
infrastructure. Data analytics tools based on machine learning provide faster response times and proactively
recommend maintenance schedules to enhance the daily performance of PACCAR vehicles. Investments in
battery testing and fast charging technology support electric vehicles.
PACCAR Technical Centers in Eindhoven, the Netherlands, Silicon Valley, California, Mount Vernon, Washington and Pune, India
advance the quality and competitiveness of PACCAR products worldwide.
I N F O R M A T I O N T E C H N O L O G Y D I V I S I O N
PACCAR’s Information Technology Division (ITD) is an industry leader in innovative digital
technologies that enhance the quality of PACCAR business processes and products. These
23
technologies systematically connect PACCAR with its customers, dealers and suppliers.
PACCAR’s connected services platform, PACCAR Connect, transmits real-time over-the-air vehicle data to
optimize performance and maximize uptime. PACCAR ITD added new features to PACCAR Connect in 2023 to
enable dealers and customers to update vehicle software, access vehicle performance analytics and download vehicle
data from a centralized online location.
PETERBILT ARTech is an innovative virtual reality (VR) service tool that enables technicians to have an “X-Ray”
view underneath a truck’s exterior body panels. PACCAR ITD enhanced this advanced VR technology in 2023 by
adding new truck parts and components to the system and increasing graphics processing speed.
DAF’s sophisticated Manufacturing Execution System (MES) oversees and controls every aspect of its
manufacturing process to deliver superior product quality and maximize production efficiency. PACCAR ITD
expanded the MES system in 2023 to the DAF axle assembly facility in Westerlo, Belgium, including the production
of eAxles for DAF’s award-winning range of zero emissions vehicles.
PACCAR is a leader in applied technology including: Customer Technology Center; augmented reality training guides use a full-scale
hologram; connected truck services increase uptime and productivity; and e-commerce platforms enhance the customer experience.
P A C C A R P H I L A N T H R O P Y
The PACCAR Foundation has contributed over $240 million to educational, social
24
services and arts organizations since 1951.
PACCAR’s philanthropy reflects its support of charitable institutions in many countries. PACCAR donates
generously to education, the arts and social services in locations in which its employees work and live worldwide.
PACCAR’s philanthropy recognizes that education is the key to providing people an opportunity to improve their
livelihood. The PACCAR Foundation funds university scholarships and professorships in science, business and
humanities, as well as supports the construction of world-class facilities for students and faculty. PACCAR supports
many institutions, including Whitworth University, University of Mississippi and Queen’s University Belfast.
PACCAR’s philanthropy is focused on health and social well-being, including funding for medical equipment,
cancer research and the United Way. PACCAR employees contribute their time and resources as volunteers and
fundraisers for organizations worldwide.
PACCAR contributes generously to nonprofit organizations that promote diverse and inclusive communities,
including UNCF, YWCA, Landesa, Northwest African American Museum, The Lighthouse for the Blind, Habitat
for Humanity, Page Ahead Children’s Literacy, United Way and independent colleges.
PACCAR Philanthropy supports institutions in many locales: PACCAR Environmental Technology Building, Washington State University;
Swedish Hospital Mobile Mammography Truck in Seattle, Washington; PACCAR Hall, University of Washington; Van Gogh Museum,
Amsterdam, the Netherlands.
P A C C A R E N V I R O N M E N T A L L E A D E R S H I P
PACCAR is an environmental leader, investing in and delivering technologically
advanced trucks and powertrains, operating resource-efficient factories and
25
responsibly managing its supply chain to further its sustainability goals.
PACCAR earned an “A-” rating from CDP in 2023, placing it in the Leadership tier of over 21,000
reporting companies, and has earned an “A” or “A-” rating for the past nine years. PACCAR is internationally
recognized for its innovative vehicles and powertrains, including state-of-the-art clean diesel and zero
emissions battery-electric, hydrogen fuel cell and hydrogen combustion. Kenworth, Peterbilt and DAF lead the
industry with their battery-electric truck models and are increasing production of zero emissions trucks to
meet customer demand. PACCAR announced a joint venture to produce commercial vehicle battery cells in
the United States.
PACCAR is an environmental leader in its factory operations throughout the world, with all manufacturing
locations being ISO 14001 environmental management system certified and over 80 percent achieving
zero-waste-to-landfill. PACCAR sources the majority of its components from Tier 1 suppliers located in the
same regions as its manufacturing operations. This benefits the environment by shortening inbound supply lines
and utilizing suppliers in countries with strong environmental practices.
PACCAR invests in state-of-the-art environmental technologies at its manufacturing facilities and distribution centers worldwide,
including solar power generation, advanced engine test cells with energy recapture, automated paint robots that utilize recycled water,
and energy-efficient lighting.
F I N A N C I A L C H A R T S
26
U.S. AND CANADA
CLASS 8 MARKET SHARE
trucks (000)
WESTERN AND CENTRAL EUROPE
16+ TONNE MARKET SHARE
retail sales
32%
trucks (000)
360
registrations
19%
320
240
160
80
0
44
33
22
11
0
29%
270
26%
180
23%
20%
90
0
14
15
16
17
18
19
20
21
22
23
14
15
16
17
18
19
20
21
22
23
(cid:81) Total U.S. and Canada Class 8 Units
(cid:81) Total Western and Central Europe
16+ Tonne Units
PACCAR Market Share (percent)
PACCAR Market Share (percent)
T O TA L A S S E T S
billions of dollars
GEOGRAPHIC REVENUE
billions of dollars
44
33
22
11
0
36
27
18
9
0
14
15
16
17
18
19
20
21
22
23
14
15
16
17
18
19
20
21
22
23
(cid:81) Truck, Parts and Other
(cid:81) Financial Services
(cid:81) United States
(cid:81) Rest of World
17%
15%
13%
11%
36
27
18
9
0
S T O C K H O L D E R R E T U R N P E R F O R M A N C E G R A P H
27
The following line graph compares the yearly percentage change in the cumulative total stockholder return on the
Company’s common stock, to the cumulative total return of the Standard & Poor’s Composite 500 Stock Index and
the return of the industry peer group of companies identified below (the “Current Peer Group Index” and “Prior
Peer Group Index”) for the last five fiscal years ended December 31, 2023. Effective January 1, 2023, the Company
revised its peer group to include Daimler Truck Holdings AG (effective January 1, 2022) and Iveco Group N.V.
(effective January 1, 2022), direct competitors and publicly traded companies, and Terex Corporation (effective
January 1, 2019), a more representative Company peer. The Company removed CNH Industrial N.V., which spun-
off Iveco, and Dana Incorporated. The Current Peer Index also includes AGCO Corporation, Caterpillar Inc.,
Cummins Inc., Deere & Company, Eaton Corporation, Oshkosh Corporation, TRATON SE (effective January 1,
2021), Navistar International Corporation (from 2018 through 2020) and AB Volvo. The Prior Peer Group Index
consisted of AGCO Corporation, Caterpillar Inc., CNH Industrial N.V., Cummins Inc., Dana Incorporated, Deere &
Company, Eaton Corporation, Navistar International Corporation, Oshkosh Corporation, TRATON SE and AB
Volvo. Standard & Poor’s has calculated a return for each company in the Peer Group Index weighted according to
its respective capitalization at the beginning of each period with dividends reinvested on a monthly basis.
Management believes that the identified companies and methodology used in the graph for the Peer Group Index
provide a better comparison than other indices available. The comparison assumes that $100 was invested December
31, 2018, in the Company’s common stock and in the stated indices and assumes reinvestment of dividends.
PACCAR Inc
S&P 500 Index
Current Peer Group Index
Prior Peer Group Index
350
300
250
200
150
100
50
2018
2019
2020
2021
2022
PACCAR Inc
S&P 500 Index
Current Peer Group Index
Prior Peer Group Index
2018
100
100
100
100
2019
145.05
131.49
128.46
128.32
2020
162.08
155.68
171.67
170.13
2021
171.19
200.37
209.23
209.74
2022
200.29
164.08
228.09
230.29
350
300
250
200
150
100
50
2023
2023
310.48
207.21
275.53
272.34
M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S O F F I N A N C I A L
C O N D I T I O N A N D R E S U L T S O F O P E R A T I O N S
28
O V E RV I E W:
PACCAR is a global technology company whose Truck segment includes the design and manufacture of high-
quality light-, medium- and heavy-duty commercial trucks. In North America, trucks are sold under the Kenworth
and Peterbilt nameplates, in Europe, under the DAF nameplate and in Australia and South America, under the
Kenworth and DAF nameplates. The Parts segment includes the distribution of aftermarket parts for trucks and
related commercial vehicles. The Company’s Financial Services segment derives its earnings primarily from
financing or leasing PACCAR products in North America, Europe, Australia and South America. The Company’s
Other business includes the manufacturing and marketing of industrial winches.
2023 Financial Highlights
• Worldwide net sales and revenues were $35.13 billion in 2023 compared to $28.82 billion in 2022, primarily due
to higher truck and parts revenues.
• Truck sales were $26.85 billion in 2023 compared to $21.49 billion in 2022, primarily due to higher truck
deliveries and price realization in all markets.
• Parts sales were $6.41 billion in 2023 compared to $5.76 billion in 2022 reflecting higher price realization in all
markets.
• Financial Services revenues were $1.81 billion in 2023 compared to $1.51 billion in 2022, primarily due to
portfolio growth and higher portfolio yields.
• In 2023, PACCAR earned net income for the 85th consecutive year. Net income was $4.60 billion ($8.76 per
diluted share) in 2023 compared to $3.01 billion ($5.75 per diluted share) in 2022 reflecting higher Truck and
Parts operating results.
• Adjusted net income (non-GAAP), excluding a $446.4 million after-tax non-recurring charge related to civil
litigation in Europe was $5.05 billion ($9.61 per diluted share). After-tax return on beginning equity (ROE) was
34.9% in 2023, which includes the $446.4 million after-tax non-recurring charge related to civil litigation in
Europe in the first quarter of this year. Excluding the one-time charge, adjusted ROE (non-GAAP) was 38.3%.
This compares to an ROE of 26.0% in 2022. See Reconciliation of GAAP to Non-GAAP Financial Measures on
page 42.
• Capital investments were $698.3 million in 2023 compared to $505.0 million in 2022.
• Research and development (R&D) expenses were $410.9 million in 2023 compared to $341.2 million in 2022.
PACCAR has begun construction of a new 240,000 square-foot PACCAR Parts Distribution Center (PDC) to be
opened in Massbach, Germany, in 2024. This PDC will improve parts delivery to dealers and customers in the region.
PACCAR, Cummins, Daimler Trucks and EVE Energy are partnering to create state-of-the-art commercial vehicle
battery cell production. The joint venture partners expect growing demand for zero emissions vehicles throughout
the decade. The planned factory in Marshall County, Mississippi, will provide cost effective scale and industry
leading battery cell technology, which will benefit our commercial vehicle customers. The total investment is
expected to be in the range of $2-3 billion, with PACCAR, Cummins and Daimler Truck each owning 30% of the
joint venture and EVE Energy having 10% ownership and contributing its industry leading battery cell design and
manufacturing expertise. Subject to regulatory approval, the 21-gigawatt hour (GWh) factory is expected to begin
producing battery cells in 2027.
The PACCAR Financial Services (PFS) group of companies has operations covering four continents and 26
countries. The global breadth of PFS and its rigorous credit application process support a portfolio of loans and
leases with total assets of $20.96 billion. PFS issued $2.91 billion in medium-term notes during 2023 to support new
business volume and repay maturing debt.
Truck Outlook
Heavy-duty truck industry retail sales in the U.S. and Canada in 2024 are expected to be 260,000 to 300,000 units
compared to 297,000 in 2023. In Europe, the 2024 truck industry registrations for over 16-tonne vehicles are
expected to be 260,000 to 300,000 units compared to 343,300 in 2023. In South America, heavy-duty truck industry
registrations in 2024 are projected to be 105,000 to 115,000 compared to 105,000 in 2023.
Parts Outlook
In 2024, PACCAR Parts sales are expected to increase 4-8% compared to 2023 levels reflecting strong freight
demand. If economic conditions were to worsen, lower freight volumes could reduce the demand for replacement
parts, resulting in lower parts revenues and operating results.
29
Financial Services Outlook
In 2024, average earning assets are expected to increase 3-5% compared to 2023. If current freight transportation
conditions decline due to weaker economic conditions, then past due accounts, truck repossessions and credit losses
would likely increase from the current low levels and new business volume would likely decline.
Capital Spending and R&D Outlook
Capital investments in 2024 are expected to be $700 to $750 million, and R&D is expected to be $460 to $500
million. The Company is increasing its investment in fuel efficient diesel and electric powertrain technologies,
connected vehicle services, and next-generation manufacturing and parts distribution capabilities.
See the Forward-Looking Statements section of Management’s Discussion and Analysis for factors that may affect
these outlooks.
R E S U LT S O F O P E R AT I O N S :
The Company’s results of operations for the years ended December 31, 2023 and 2022 are presented below. For
information on the year ended December 31, 2021, refer to Part II, Item 7 in the 2022 Annual Report on Form 10-K.
($ in millions, except per share amounts)
Year Ended December 31,
Net sales and revenues:
Truck
Parts
Other
Truck, Parts and Other
Financial Services
Income before income taxes:
Truck
Parts
Other*
Truck, Parts and Other
Financial Services
Investment income
Income taxes
Net Income
Diluted earnings per share
After-tax return on revenues
2023
2022
$ 26,846.4
6,414.4
54.7
33,315.5
1,811.9
$ 35,127.4
$ 3,799.9
1,702.6
(616.8)
4,885.7
540.3
292.2
(1,117.4)
$ 4,600.8
8.76
$
$ 21,486.2
5,764.3
63.8
27,314.3
1,505.4
$ 28,819.7
$ 1,753.3
1,446.6
(1.1)
3,198.8
588.9
61.0
(837.1)
$ 3,011.6
5.75
$
13.1%
10.4%
*
In 2023, Other includes a $600.0 million non-recurring charge related to civil litigation in Europe (EC-related
claims) in the first quarter 2023.
30
The following provides an analysis of the results of operations for the Company’s three reportable segments - Truck,
Parts and Financial Services. Where possible, the Company has quantified the impact of factors identified in the
following discussion and analysis. In cases where it is not possible to quantify the impact of factors, the Company
lists them in estimated order of importance. Factors for which the Company is unable to specifically quantify the
impact include market demand, fuel prices, freight tonnage and economic conditions affecting the Company’s
results of operations.
2023 Compared to 2022:
Truck
The Company’s Truck segment accounted for 77% of revenues in 2023 compared to 75% in 2022.
The Company’s new truck deliveries are summarized below:
Year Ended December 31,
U.S. and Canada
Europe
Mexico, South America, Australia and other
Total units
2023
109,100
63,200
31,900
204,200
2022
95,600
62,400
27,900
185,900
% change
14
1
14
10
The increase in new truck deliveries worldwide in 2023 compared to 2022 was driven by higher build rates and
increased demand in all major markets.
Market share data discussed below is provided by third-party sources and is measured by either retail sales or
registrations for the Company’s dealer network as a percentage of total retail sales or registrations depending on the
geographic market. In the U.S. and Canada, market share is based on retail sales. In Europe, market share is based
on registrations.
In 2023, industry retail sales in the heavy-duty market in the U.S. and Canada increased to 297,000 units from
283,500 units in 2022. The Company’s heavy-duty truck retail market share was 29.5% in 2023 compared to 29.8%
in 2022. The medium-duty market was 105,300 units in 2023 compared to 88,300 units in 2022. The Company’s
medium-duty market share was 14.5% in 2023 compared to 10.9% in 2022.
The over 16-tonne truck market in Europe in 2023 increased to 343,300 units from 297,500 units in 2022, and
DAF’s market share was 15.6% in 2023 compared to 17.3% in 2022. The 6 to 16-tonne market was 46,800 units in
2023 and 38,800 units in 2022. DAF’s market share in the 6 to 16-tonne market in 2023 was 9.1% compared to 9.7%
in 2022.
The over 16-tonne truck market in Brasil in 2023 decreased to 82,100 units from 97,900 units in 2022, and DAF
Brasil achieved a record 10.2% market share in 2023 compared to 6.9% in 2022.
The Company’s worldwide truck net sales and revenues are summarized below:
($ in millions)
Year Ended December 31,
Truck net sales and revenues:
U.S. and Canada
Europe
Mexico, South America, Australia and other
Truck income before income taxes
2023
2022
% change
$ 15,898.5
6,871.3
4,076.6
$ 26,846.4
$ 3,799.9
$ 12,521.8
5,866.5
3,097.9
$ 21,486.2
$ 1,753.3
27
17
32
25
117
Pre-tax return on revenues
14.2%
8.2%
The Company’s worldwide truck net sales and revenues increased to $26.85 billion in 2023 from $21.49 billion in
2022 primarily due to higher truck unit deliveries, improved price realization in all markets and favorable currency
translation effects, primarily the euro. Truck segment income before income taxes and pretax return on revenues
reflect the impact of higher truck unit deliveries and improved margins.
The major factors for the Truck segment changes in net sales and revenues, cost of sales and revenues and gross
margin between 2023 and 2022 are as follows:
31
($ in millions)
2022
Increase (decrease)
Truck sales volume
Average truck sales prices
Average per truck material, labor and other direct costs
Factory overhead and other indirect costs
Extended warranties, operating leases and other
Currency translation
Total increase
2023
net
sales and
revenues
cost of
sales and
revenues
gross
margin
$ 21,486.2
$ 19,205.4
$ 2,280.8
2,465.8
2,785.9
40.5
68.0
5,360.2
$ 26,846.4
1,918.0
916.7
204.3
134.2
62.0
3,235.2
$ 22,440.6
547.8
2,785.9
(916.7)
(204.3)
(93.7)
6.0
2,125.0
$ 4,405.8
• Truck sales volume reflects higher truck deliveries in all major markets.
• Average truck sales prices increased sales by $2.79 billion, primarily due to higher price realization worldwide
reflecting the positive effect of new truck models as well as inflationary cost increases.
• Average cost per truck increased cost of sales by $916.7 million, primarily reflecting higher raw material, labor
and product support costs, mainly warranty expense.
• Factory overhead and other indirect costs increased $204.3 million, primarily due to higher labor costs,
maintenance, depreciation and utilities.
• Extended warranties, operating leases and other increased revenues by $40.5 million and increased cost of sales
by $134.2 million. The increase in cost of sales was primarily due to higher costs from extended warranty and
service contracts.
• The currency translation effect on sales and cost of sales reflects an increase in the value of the euro and Brazilian
real relative to the U.S. dollar, partially offset by the decrease in the value of the Canadian dollar and Australian
dollar relative to the U.S. dollar.
• Truck gross margin was 16.4% in 2023 compared to 10.6% in 2022 due to the factors noted above.
Truck selling, general and administrative expenses (SG&A) in 2023 decreased to $278.5 million from $280.0 million
in 2022. The decrease was primarily due to lower professional expenses, and lower sales and marketing expenses,
offset by higher salaries and travel related costs. As a percentage of sales, Truck SG&A was 1.0% in 2023 and 1.3%
in 2022.
Parts
The Company’s Parts segment accounted for 18% of revenues in 2023 compared to 20% in 2022.
($ in millions)
Year Ended December 31,
Parts net sales and revenues:
U.S. and Canada
Europe
Mexico, South America, Australia and other
Parts income before income taxes
2023
2022
% change
$ 4,441.7
1,357.0
615.7
$ 6,414.4
$ 1,702.6
$ 4,087.5
1,141.1
535.7
$ 5,764.3
$ 1,446.6
9
19
15
11
18
Pre-tax return on revenues
26.5%
25.1%
32
The Company’s worldwide parts net sales and revenues increased to $6.41 billion in 2023 from $5.76 billion in 2022
primarily due to higher price realization in all markets. The increase in Parts segment income before income taxes
and pre-tax return on revenues was primarily due to higher price realization in all markets.
The major factors for the Parts segment changes in net sales and revenues, cost of sales and revenues and gross
margin between 2023 and 2022 are as follows:
($ in millions)
2022
Increase (decrease)
Aftermarket parts volume
Average aftermarket parts sales prices
Average aftermarket parts direct costs
Warehouse and other indirect costs
Currency translation
Total increase
2023
net
sales and
revenues
cost of
sales and
revenues
gross
margin
$ 5,764.3
$ 4,009.6
$ 1,754.7
22.5
614.2
13.4
650.1
$ 6,414.4
9.2
297.6
44.8
8.4
360.0
$ 4,369.6
13.3
614.2
(297.6)
(44.8)
5.0
290.1
$ 2,044.8
• Aftermarket parts sales volume increased by $22.5 million and related cost of sales increased by $9.2 million
primarily reflecting higher sales volume in Brasil, Australia and Europe, partially offset by lower sales volume in
the U.S.
• Average aftermarket parts sales prices increased sales by $614.2 million primarily due to higher price realization
in North America and Europe.
• Average aftermarket parts direct costs increased $297.6 million due to higher material costs, primarily in the U.S.
and Europe.
• Warehouse and other indirect costs increased $44.8 million primarily due to higher salaries and related expenses
and costs of supplies.
• The currency translation effect on sales and cost of sales primarily reflects an increase in the value of the euro
relative to the U.S. dollar, partially offset by a decrease in the value of the Australian dollar and the Canadian
dollar relative to the U.S. dollar.
• Parts gross margin was 31.9% in 2023 compared to 30.4% in 2022 due to the factors noted above.
Parts SG&A expense in 2023 increased to $238.0 million from $216.3 million in 2022. The increase was primarily
due to higher salaries and related expenses, partially offset by lower sales and marketing costs. As a percentage of
sales, Parts SG&A was 3.7% in 2023 and 3.8% in 2022.
Financial Services
The Company’s Financial Services segment accounted for 5% of revenues in 2023 and 2022.
33
($ in millions)
Year Ended December 31,
New loan and lease volume:
U.S. and Canada
Europe
Mexico, Australia, Brasil and other
New loan and lease volume by product:
Loans and finance leases
Equipment on operating lease
New loan and lease unit volume:
Loans and finance leases
Equipment on operating lease
Average earning assets:
U.S. and Canada
Europe
Mexico, Australia, Brasil and other
Average earning assets by product:
Loans and finance leases
Dealer wholesale financing
Equipment on lease and other
Revenues:
U.S. and Canada
Europe
Mexico, Australia, Brasil and other
Revenues by product:
Loans and finance leases
Dealer wholesale financing
Equipment on lease and other
Income before income taxes
2023
2022
% change
$ 3,662.3
1,586.6
1,956.4
$ 7,205.3
$ 6,538.6
666.7
$ 7,205.3
47,200
7,200
54,400
$ 9,478.5
4,465.9
3,596.5
$ 17,540.9
$ 11,903.3
3,100.2
2,537.4
$ 17,540.9
$
759.7
555.7
496.5
$ 1,811.9
$
839.8
169.5
802.6
$ 1,811.9
540.3
$
$ 3,376.5
1,483.4
1,355.8
$ 6,215.7
$ 5,209.6
1,006.1
$ 6,215.7
42,100
11,600
53,700
$ 8,647.4
3,810.0
2,544.0
$ 15,001.4
$ 10,279.4
1,933.9
2,788.1
$ 15,001.4
$
684.3
498.3
322.8
$ 1,505.4
$
532.0
96.7
876.7
$ 1,505.4
588.9
$
8
7
44
16
26
(34)
16
12
(38)
1
10
17
41
17
16
60
(9)
17
11
12
54
20
58
75
(8)
20
(8)
New loan and lease volume increased to $7.21 billion in 2023 from $6.22 billion in 2022. The increase in new loan
and finance lease volume reflected higher retail sales of PACCAR trucks and a higher amount financed per truck in
all major markets. The decrease in equipment on operating leases new business volume reflected lower market
demand, partially offset by a higher amount financed per truck in all major markets. The effect of currency
translation increased new loan and lease volume by $98.7 million, primarily due to the stronger Mexican peso and
euro relative to the U.S. dollar. PFS finance market share of new PACCAR truck sales was 24.0% in 2023 compared
to 25.6% in 2022.
PFS revenues increased to $1.81 billion in 2023 from $1.51 billion in 2022. The increase was primarily due to higher
interest and fee income driven by portfolio growth and higher portfolio yields. The effects of currency translation
increased PFS revenues by $40.8 million in 2023, primarily due to a stronger Mexican peso and euro relative to the
U.S. dollar.
34
PFS income before income taxes decreased to $540.3 million in 2023 from $588.9 million in 2022, primarily due to
lower operating lease margins, reflecting lower results on returned lease assets, partially offset by higher finance
margins. The effect of currency translation increased PFS income before income taxes by $15.0 million in 2023,
primarily due to a stronger Mexican peso and euro relative to the U.S. dollar.
Included in Financial Services “Other Assets” on the Company’s Consolidated Balance Sheets are used trucks held
for sale, net of impairments, of $309.8 million at December 31, 2023 and $141.7 million at December 31, 2022.
These trucks are primarily units returned from matured operating leases in the ordinary course of business, and
also include trucks acquired from repossessions, through acquisitions of used trucks in trades related to new truck
sales and trucks returned from residual value guarantees (RVGs).
The Company recognized gains on used trucks, excluding repossessions, of $43.5 million in 2023 compared to
$140.1 million in 2022, including losses on multiple unit transactions of $12.3 million in 2023 compared to $.8
million in 2022. Used truck losses related to repossessions, which are recognized as credit losses, in 2023 were $4.6
million and were insignificant in 2022.
The major factors for the changes in interest and fees, interest and other borrowing expenses and finance margin
between 2023 and 2022 are outlined below:
($ in millions)
2022
Increase (decrease)
Average finance receivables
Average debt balances
Yields
Borrowing rates
Currency translation and other
Total increase
2023
interest
and fees
interest and other
borrowing expenses
finance
margin
$
628.7
$
216.3
$
412.4
183.6
177.7
19.3
380.6
$ 1,009.3
76.1
200.2
8.0
284.3
500.6
$
183.6
(76.1)
177.7
(200.2)
11.3
96.3
508.7
$
• Average finance receivables increased $2.77 billion (excluding foreign exchange effects) in 2023 primarily due to
higher average loan, finance lease and dealer wholesale balances.
• Average debt balances increased $1.91 billion (excluding foreign exchange effects) in 2023, reflecting higher
funding requirements for the portfolio, which includes loans, finance leases, dealer wholesale and equipment on
operating lease.
• Higher portfolio yields (6.7% in 2023 compared to 5.1% in 2022) increased interest and fees by $177.7 million.
The higher portfolio yields were primarily due to higher market rates in all markets.
• Higher borrowing rates (3.9% in 2023 compared to 2.0% in 2022) were primarily due to higher debt market rates
in all markets.
• The currency translation effects reflect a increase in the value of foreign currencies relative to the U.S. dollar,
primarily the Mexican peso, Brazilian real and euro.
The following table summarizes operating lease, rental and other revenues and depreciation and other expenses:
35
($ in millions)
Year Ended December 31,
Operating lease and rental revenues
Used truck sales
Insurance, franchise and other revenues
Operating lease, rental and other revenues
Depreciation of operating lease equipment
Vehicle operating expenses
Cost of used truck sales
Insurance, franchise and other expenses
Depreciation and other expenses
2023
751.8
23.0
27.8
802.6
488.6
73.1
24.1
4.9
590.7
$
$
$
$
2022
807.2
50.5
19.0
876.7
474.9
33.9
49.3
2.7
560.8
$
$
$
$
The major factors for the changes in operating lease, rental and other revenues, depreciation and other expenses
and lease margin between 2023 and 2022 are outlined below:
($ in millions)
2022
(Decrease) increase
Used truck sales
Results on returned lease assets
Average operating lease assets
Revenue and cost per asset
Currency translation and other
Total (decrease) increase
2023
operating lease, rental
and other revenues
depreciation and
other expenses
lease
margin
$
876.7
$
560.8
$
315.9
(27.8)
(129.4)
53.1
30.0
(74.1)
802.6
$
(25.6)
107.6
(110.3)
42.1
16.1
29.9
590.7
$
(2.2)
(107.6)
(19.1)
11.0
13.9
(104.0)
211.9
$
• Lower sales volume and lower market prices of used truck on trade, primarily in Europe, decreased revenues by
$27.8 million and related depreciation and other expenses by $25.6 million.
• Results on returned lease assets increased depreciation and other expenses by $107.6 million primarily due to
lower gains on sales of returned lease units as a result of lower used truck market values.
• Average operating lease assets decreased $280.7 million (excluding foreign exchange effects), which decreased
revenues by $129.4 million and related depreciation and other expenses by $110.3 million.
• Revenue per asset increased $53.1 million primarily due to higher lease rates reflecting higher average truck value
financed and higher market rates. Cost per asset increased $42.1 million due to higher depreciation and operating
expenses.
• The currency translation effects reflect an increase in the value of foreign currencies relative to the U.S. dollar,
primarily the Mexican peso and euro.
36
Financial Services SG&A expense increased to $149.0 million in 2023 from $133.9 million in 2022. The increase
was primarily due to higher salaries and related expenses, higher travel costs and unfavorable currency translation
effects, primarily the Mexican peso and euro. As a percentage of average earning assets, Financial Services SG&A
was .8% in 2023 and .9% in 2022.
The following table summarizes the provision for losses on receivables and net charge-offs:
2023
2022
($ in millions)
U.S. and Canada
Europe
Mexico, Australia, Brasil and other
provision for
losses on
receivables
$
$
7.9
4.4
19.0
31.3
$
net
charge-offs
8.6
2.9
11.8
23.3
$
provision for
losses on
receivables
$
(5.1)
.8
9.8
5.5
$
$
net
charge-offs
(.9)
.6
(.4)
(.7)
$
The provision for losses on receivables increased to $31.3 million in 2023 from $5.5 million in 2022, primarily
driven by higher charge-offs, portfolio growth and higher past due balances in 2023.
The Company modifies loans and finance leases as a normal part of its Financial Services operations. The Company
may modify loans and finance leases for commercial reasons or for credit reasons. Modifications for commercial
reasons are changes to contract terms for customers that are not considered to be in financial difficulty.
Insignificant delays are modifications extending terms up to three months for customers experiencing some short-
term financial stress, but not considered to be in financial difficulty. Modifications for credit reasons are changes to
contract terms for customers considered to be in financial difficulty. The Company’s modifications typically result
in granting more time to pay the contractual amounts owed and charging a fee and interest for the term of the
modification. When considering whether to modify customer accounts for credit reasons, the Company evaluates
the creditworthiness of the customers and modifies those accounts that the Company considers likely to perform
under the modified terms.
The post-modification balances of accounts modified during the years ended December 31, 2023 and 2022 are
summarized below:
($ in millions)
Commercial
Insignificant delay
Credit
2023
2022
amortized
cost basis
% of total
portfolio*
amortized
cost basis
% of total
portfolio*
$
$
200.1
232.5
55.2
487.8
1.5%
1.7%
.4%
3.6%
$
$
225.4
79.3
59.8
364.5
2.0%
.7%
.5%
3.2%
* Amortized cost basis immediately after modification as a percentage of the year-end retail portfolio balance.
Modification activity increased to $487.8 in 2023 from $364.5 in 2022. The decrease in modifications for
commercial reasons primarily reflects lower volumes of refinancing. The increase related to Insignificant Delay
reflects an increase in customers requesting payment relief for up to three months, primarily in the U.S. The
decrease in Credit modifications reflects lower volumes of contract modifications and requests for payment relief,
primarily in Brasil, partially offset by higher volumes of credit modifications in Europe.
37
The following table summarizes the Company’s 30+ days past due accounts:
At December 31,
Percentage of retail loan and lease accounts 30+ days past due:
U.S. and Canada
Europe
Mexico, Australia, Brasil and other
Worldwide
2023
.8%
.5%
1.9%
1.0%
2022
.1%
.2%
1.6%
.4%
Accounts 30+ days past due increased to 1.0% at December 31, 2023 from .4% at December 31, 2022. The Company
continues to focus on maintaining low past due balances.
When the Company modifies a 30+ days past due account, the customer is then generally considered current under
the revised contractual terms. The Company modified $35.0 million, primarily in Europe, and $8.9 million of
accounts worldwide during the fourth quarter of 2023 and the fourth quarter of 2022, respectively, which were 30+
days past due and became current at the time of modification. Had these accounts not been modified and continued
to not make payments, the pro forma percentage of retail loan and lease accounts 30+ days past due would have
been as follows:
At December 31,
Pro forma percentage of retail loan and lease accounts 30+ days past due:
U.S. and Canada
Europe
Mexico, Australia, Brasil and other
Worldwide
2023
.8%
1.8%
2.0%
1.2%
2022
.1%
.2%
2.0%
.5%
Modifications of accounts in prior quarters that were more than 30 days past due at the time of modification are
included in past dues if they were not performing under the modified terms at December 31, 2023 and 2022. The
effect on the allowance for credit losses from such modifications was not significant at December 31, 2023 and 2022.
The Company’s annualized pre-tax return on average total assets for Financial Services was 2.9% in 2023 compared
to 3.7% in 2022, respectively.
Other
Other includes the winch business as well as sales, income and expenses not attributable to a reportable segment.
Other also includes non-service cost components of pension expense and a portion of corporate expense. Other
sales represent less than 1% of consolidated net sales and revenues for 2023 and 2022. Other SG&A decreased to
$87.8 million in 2023 from $96.1 million in 2022 primarily due to lower corporate expenses.
38
Other loss before tax was $616.8 million in 2023 compared to $1.1 million in 2022. The increase was primarily due
to the EC-related charge in the first quarter 2023 which is discussed in Note L of the consolidated financial
statements.
Investment income increased to $292.2 million in 2023 from $61.0 million in 2022, primarily due to higher market
interest rates in all regions, as well as higher investment balances.
Income Taxes
In 2023, the effective tax rate was 19.5% compared to 21.8% in 2022. The lower effective tax rate in 2023 was
primarily due to a $119.7 million discrete tax benefit for the release of a valuation allowance on deferred tax assets in
Brasil, and the change in mix of income generated in jurisdictions with lower tax rates in 2023 as compared to 2022.
($ in millions)
Year Ended December 31,
Domestic income before taxes
Foreign income before taxes
Total income before taxes
Domestic pre-tax return on revenues
Foreign pre-tax return on revenues
Total pre-tax return on revenues
2023
$ 3,913.7
1,804.5
$ 5,718.2
2022
$ 2,322.9
1,525.8
$ 3,848.7
20.4%
11.3%
16.3%
14.7%
11.7%
13.4%
In 2023, both domestic and foreign income before income taxes and domestic pre-tax return on revenues increased
primarily due to the improved results from Truck and Parts operations. In 2023, foreign income before income taxes
and pre-tax return on revenues includes a one-time expense for the EC-related charge of $600.0 million in the first
quarter 2023.
L I Q U I D I T Y A N D C A P I TA L R E S O U R C E S :
($ in millions)
At December 31,
Cash and cash equivalents
Marketable securities
2023
$ 7,181.7
1,822.6
$ 9,004.3
2022
$ 4,690.9
1,614.2
$ 6,305.1
The Company’s total cash and marketable securities at December 31, 2023, increased $2.70 billion from the balances
at December 31, 2022. Total cash and marketable securities are primarily intended to provide liquidity while
preserving capital.
The change in cash and cash equivalents is summarized below:
39
($ in millions)
Year Ended December 31,
Operating activities:
Net income
Net income items not affecting cash
Pension contributions
Changes in operating assets and liabilities, net
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by financing activities
Effect of exchange rate changes on cash
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
2023
2022
$ 4,600.8
698.0
(27.3)
(1,081.5)
4,190.0
(2,871.0)
1,102.2
69.6
2,490.8
4,690.9
$ 7,181.7
$ 3,011.6
601.6
(39.1)
(547.1)
3,027.0
(2,033.0)
304.9
(36.3)
1,262.6
3,428.3
$ 4,690.9
Operating activities: Cash provided by operations increased by $1.16 billion to $4.19 billion in 2023 from $3.03 billion
in 2022. Higher operating cash flows reflect higher net income of $1,589.2 million and higher accruals of $750.7
million, including EC-related charge and product support liabilities. The higher operating cash flows were partially
offset by lower accruals in 2023 compared to 2022 of $464.5 million for accounts payable and current accrued
expenses. Additionally, there were higher cash outflows for income taxes of $567.2 million and higher cash used of
$331.0 million for wholesale receivables.
Investing activities: Cash used in investing activities increased by $838.0 million to $2.87 billion in 2023 from $2.03
billion in 2022. Higher net cash used in investing activities primarily reflects higher net originations for retail loans
and financing leases of $877.1 million and higher cash used in the acquisition of property, plant and equipment of
$170.0 million. The higher net cash usage was partially offset by lower acquisitions of equipment for operating leases
of $298.0 million.
Financing activities: Cash provided by financing activities was $1.10 billion in 2023 compared to $304.9 million in
2022. The Company paid $1.52 billion in dividends in 2023 compared to $1.00 billion in 2022, primarily due to a
higher year-end dividend paid in January 2023. Cash provided from net borrowing activities was $2.57 billion, $1.30
billion higher than the cash provided by net borrowing activities of $1.28 billion in 2022 reflecting higher funding to
support financial services portfolio growth.
40
The Company expects to continue paying dividends, although there is no assurance as to future dividends because
they are dependent upon future earnings, capital requirements and financial conditions. Cash dividends declared for
the last two years were as follows:
QUARTER
First
Second
Third
Fourth
Year-End Extra (paid in January of the following year)
Total dividends declared per share*
2023
.25
.25
.27
.27
3.20
4.24
$
$
2022
.23
.23
.23
.25
1.87
2.80
$
$
*
The sum of quarterly per share amounts do not equal per share amounts reported for the full year due to
rounding.
Credit Lines and Other:
The Company has line of credit arrangements of $4.20 billion, of which $3.66 billion were unused at December 31,
2023. Included in these arrangements are $3.00 billion of committed bank facilities, of which $1.00 billion expires in
June 2024, $1.00 billion expires in June 2026 and $1.00 billion expires in June 2028. The Company intends to extend
or replace these credit facilities on or before expiration to maintain facilities of similar amounts and duration. These
credit facilities are maintained primarily to provide backup liquidity for commercial paper borrowings and maturing
medium-term notes. There were no borrowings under the committed bank facilities for the year ended December
31, 2023.
On December 4, 2018, PACCAR’s Board of Directors approved the repurchase of up to $500.0 million of the
Company’s outstanding common stock without an expiration. The objective of the repurchase plan is to return value
to PACCAR shareholders. As of December 31, 2023, the Company has repurchased $110.0 million of shares under
this plan. There were no repurchases made under this plan during the year ended December 31, 2023.
Truck, Parts and Other
The Company provides funding for working capital, capital expenditures, R&D, dividends, stock repurchases and
other business initiatives and commitments primarily from cash provided by operations. Management expects this
method of funding to continue in the future.
Investments for manufacturing property, plant and equipment in 2023 were $679.4 million compared to $491.2
million in 2022. Over the past decade, the Company’s combined investments in worldwide capital projects and R&D
totaled $7.68 billion and have significantly increased the operating capacity and efficiency of its facilities and
enhanced the quality and operating efficiency of the Company’s premium products.
Capital investments in 2024 are expected to be $700 to $750 million, and R&D is expected to be $460 to $500
million. The Company is increasing its investment in fuel efficient diesel and electric powertrain technologies,
connected vehicle services, and next-generation manufacturing and parts distribution capabilities.
PACCAR, Cummins, Daimler Trucks and EVE Energy are partnering to produce state of the art commercial vehicle
batteries in a factory in Marshall County, Mississippi. The total investment is expected to be in the range of $2-3
billion, of which PACCAR’s share is 30%. The 21-gigawatt hour (GWh) factory is expected to begin producing
batteries in 2027, subject to regulatory approval.
Financial Services
The Company funds its financial services activities primarily from collections on existing finance receivables and
borrowings in the capital markets. The primary sources of borrowings in the capital markets are commercial paper
and medium-term notes issued in the public markets and, to a lesser extent, bank loans.
In November 2021, the Company’s U.S. finance subsidiary, PACCAR Financial Corp. (PFC), filed a shelf registration
under the Securities Act of 1933. The total amount of medium-term notes outstanding for PFC as of December 31,
2023 was $6.10 billion. In January 2024, PFC issued $600.0 million of medium-term notes under this registration.
The registration expires in November 2024 and does not limit the principal amount of debt securities that may be
issued during that period.
41
As of December 31, 2023, the Company’s European finance subsidiary, PACCAR Financial Europe, had €911.7
million available for issuance under a €2.50 billion medium-term note program listed on the Euro MTF Market of
the Luxembourg Stock Exchange. This program renews annually and expires in September 2024.
In August 2021, PACCAR Financial Mexico registered a 10.00 billion Mexican peso program with the Comision
Nacional Bancaria y de Valores to issue medium-term notes and commercial paper. The registration expires in
August 2026 and limits the amount of commercial paper (up to one year) to 5.00 billion Mexican pesos. At
December 31, 2023, 6.32 billion Mexican pesos were available for issuance.
In August 2018, the Company’s Australian subsidiary, PACCAR Financial Pty. Ltd. (PFPL Australia), registered a
medium-term note program. The program does not limit the principal amount of debt securities that may be issued
under the program. The total amount of medium-term notes outstanding for PFPL Australia as of December 31,
2023 was 850.0 million Australian dollars.
In May 2021, the Company’s Canadian subsidiary, PACCAR Financial Ltd. (PFL Canada), established a medium-
term note program. The program does not limit the principal amount of debt securities that may be issued under
the program. The total amount of medium-term notes outstanding for PFL Canada as of December 31, 2023 was
150.0 million Canadian dollars.
The Company’s Brazilian subsidiary, Banco PACCAR S.A., established a lending program in December 2021 with
the local development bank, Banco Nacional de Desenvolvimento Economico e Social (BNDES) for qualified
customers to receive preferential conditions and generally market interest rates. This program is limited to 1.15
billion Brazilian reais and has 775.5 million Brazilian reais outstanding as of December 31, 2023.
The Company believes its cash balances and investments, collections on existing finance receivables, committed
bank facilities, and current investment-grade credit ratings of A+/A1 will continue to provide it with sufficient
resources and access to capital markets at competitive interest rates and therefore contribute to the Company
maintaining its liquidity and financial stability. In the event of a decrease in the Company’s credit ratings or a
disruption in the financial markets, the Company may not be able to refinance its maturing debt in the financial
markets. In such circumstances, the Company would be exposed to liquidity risk to the degree that the timing of
debt maturities differs from the timing of receivable collections from customers. The Company believes its various
sources of liquidity, including committed bank facilities, would continue to provide it with sufficient funding
resources to service its maturing debt obligations.
Commitments
The following summarizes the Company’s contractual cash commitments at December 31, 2023:
($ in millions)
Borrowings*
Interest on debt**
Purchase obligations
Lease liabilities
Other obligations
within
1 year
$ 7,448.5
282.7
104.0
18.8
94.0
$ 7,948.0
maturity
1-3 years
3-5 years
more than
5 years
$ 5,851.7
331.0
179.4
31.1
7.7
$ 6,400.9
$
988.4
41.7
139.2
18.4
1.3
$ 1,189.0
$
$
115.7
14.6
4.3
134.6
total
$ 14,288.6
655.4
538.3
82.9
107.3
$ 15,672.5
* Commercial paper included in borrowings is at par value.
** Interest on floating-rate debt is based on the applicable market rates at December 31, 2023.
42
Total cash commitments for borrowings and interest on term debt were $14.94 billion and were related to the
Financial Services segment. As described in Note J of the consolidated financial statements, borrowings consist
primarily of term notes and commercial paper issued by the Financial Services segment. The Company expects to
fund its maturing Financial Services debt obligations principally from funds provided by collections from customers
on loans and lease contracts, as well as from the proceeds of commercial paper and medium-term note borrowings.
Purchase obligations are the Company’s contractual commitments to acquire future production inventory and
capital equipment. Other obligations primarily include commitments to commodities.
The Company’s other commitments include the following at December 31, 2023:
($ in millions)
Loan and lease commitments
Residual value guarantees
Letters of credit
within
1 year
$
940.7
414.2
22.7
$ 1,377.6
commitment expiration
1-3 years
3-5 years
more than
5 years
$
$
385.6
385.6
$
$
52.8
52.8
$
$
11.1
1.0
12.1
total
$
940.7
863.7
23.7
$ 1,828.1
Loan and lease commitments are for funding new retail loan and lease contracts. Residual value guarantees
represent the Company’s commitment to acquire trucks at a guaranteed value if the customer decides to return the
truck at a specified date in the future.
I M PA C T O F E N V I R O N M E N TA L M AT T E R S :
The Company, its competitors and industry in general are subject to various domestic and foreign requirements
relating to the environment and greenhouse gases. The statutory and regulatory requirements governing greenhouse
gas and non-greenhouse gas emissions are included in Item 1A, “Risk Factors – Emissions Requirements and
Reduction Targets” in the Company’s 2023 Form 10-K. The Company believes its policies, practices and procedures
are designed to prevent unreasonable risk of environmental damage and that its handling, use and disposal of
hazardous or toxic substances have been in accordance with environmental laws and regulations in effect at the time
such use and disposal occurred.
The Company is involved in various stages of investigations and cleanup actions in different countries related to
environmental matters. In certain of these matters, the Company has been designated as a “potentially responsible
party” by domestic and foreign environmental agencies. The Company has accrued the estimated costs to investigate
and complete cleanup actions where it is probable that the Company will incur such costs in the future.
Expenditures related to environmental activities in the years ended December 31, 2023 and 2022 were $3.0 million
and $4.6 million, respectively. While the timing and amount of the ultimate costs associated with future
environmental cleanup cannot be determined, management expects that these matters will not have a significant
effect on the Company’s consolidated cash flow, liquidity or financial condition.
R E C O N C I L I AT I O N O F G A A P T O N O N - G A A P F I N A N C I A L M E A S U R E S :
This annual report 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 a charge for EC-related claims. 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. In addition, the annual report includes the financial ratios
noted below calculated on non-GAAP measures.
Adjustment for the EC-related claims relates to a pre-tax charge of $600.0 million ($446.4 million after-tax) for
estimable total costs recorded in Interest and other expenses (income), net in the year ended December 31, 2023
(recorded in the first quarter 2023).
Management utilizes these non-GAAP measures to evaluate the Company’s performance and believes these
measures allow investors and management to evaluate operating trends by excluding a significant non-recurring
charge that is not representative of underlying operating trends.
43
Reconciliations from the most directly comparable GAAP measures to adjusted net income (non-GAAP) and
adjusted net income per diluted shares (non-GAAP) are as follows:
($ in millions, except per share amounts)
Year Ended December 31, 2023
Net income
EC-related claims, net of taxes
Adjusted net income (non-GAAP)
Per diluted share
Net income
EC-related claims, net of taxes
Adjusted net income (non-GAAP)
After-tax return on revenues
EC-related claims, net of taxes
After-tax adjusted return on revenues (non-GAAP) *
After-tax return on beginning equity
EC-related claims, net of taxes
After-tax adjusted return on beginning equity (non-GAAP)*
* Calculated using adjusted net income.
$ 4,600.8
446.4
$ 5,047.2
$
$
8.76
.85
9.61
13.1%
1.3%
14.4%
34.9%
3.4%
38.3%
C R I T I C A L A C C O U N T I N G P O L I C I E S :
The Company’s significant accounting policies are disclosed in Note A of the consolidated financial statements. In
the preparation of the Company’s financial statements, in accordance with U.S. generally accepted accounting
principles, management uses estimates and makes judgments and assumptions that affect asset and liability values
and the amounts reported as income and expense during the periods presented. The following are accounting
policies which, in the opinion of management, are particularly sensitive and which, if actual results are different
from estimates used by management, may have a material impact on the financial statements.
Operating Leases
Trucks sold pursuant to agreements accounted for as operating leases are disclosed in Note F of the consolidated
financial statements. In determining its estimate of the residual value of such vehicles, the Company considers the
length of the lease term, the truck model, the expected usage of the truck and anticipated market demand.
Operating lease terms generally range from three to five years. The resulting residual values on operating leases
generally range between 30% and 70% of the original equipment cost. If the sales price of a truck at the end of the
term of the agreement differs from the Company’s estimated residual value, a gain or loss will result.
Future market conditions, changes in government regulations and other factors outside the Company’s control could
impact the ultimate sales price of trucks returned under these contracts. Residual values are reviewed regularly and
adjusted if market conditions warrant. A decrease in the estimated equipment residual values would increase annual
depreciation expense over the remaining lease term.
During 2023, market values on equipment returning upon operating lease maturity were generally higher than the
residual values on the equipment, resulting in a decrease in depreciation expense of $63.8 million.
44
At December 31, 2023, the aggregate residual value of equipment on operating leases in the Financial Services
segment and residual value guarantee on trucks accounted for as operating leases in the Truck segment was $1.49
billion. A 10% decrease in used truck values worldwide, if expected to persist over the remaining maturities of the
Company’s operating leases, would reduce residual value estimates and result in the Company recording additional
depreciation expense of approximately $73.6 million in 2024, $34.8 million in 2025, $20.5 million in 2026, $13.1
million in 2027, $6.8 million in 2028 and thereafter.
Allowance for Credit Losses
The allowance for credit losses related to the Company’s loans and finance leases is disclosed in Note E of the
consolidated financial statements. The Company has developed a systematic methodology for determining the
allowance for credit losses for its two portfolio segments, retail and wholesale. The retail segment consists of retail
loans and sales-type finance leases, net of unearned interest. The wholesale segment consists of truck inventory
financing loans to dealers that are collateralized by trucks and other collateral. The wholesale segment generally has
less risk than the retail segment. Wholesale receivables generally are shorter in duration than retail receivables, and
the Company requires periodic reporting of the wholesale dealer’s financial condition, conducts periodic audits of
the trucks being financed and in many cases, obtains guarantees or other security such as dealership assets. In
determining the allowance for credit losses, retail loans and finance leases are evaluated together since they relate to
a similar customer base, their contractual terms require regular payment of principal and interest, generally over
three to five years, and they are secured by the same type of collateral. The allowance for credit losses consists of
both specific and general reserves.
The Company individually evaluates certain finance receivables for expected credit losses. Finance receivables that
are evaluated individually consist of all wholesale accounts and certain large retail accounts with past due balances
or otherwise determined to be at a higher risk of loss. In general, finance receivables that are 90 days past due are
placed on non-accrual status. Finance receivables on non-accrual status which have been performing for 90
consecutive days are placed on accrual status if it is deemed probable that the Company will collect all principal and
interest payments.
Individually evaluated receivables on non-accrual status are generally considered collateral dependent. Large balance
retail and all wholesale receivables on non-accrual status are individually evaluated to determine the appropriate
reserve for losses. The determination of reserves for large balance receivables on non-accrual status considers the
fair value of the associated collateral. When the underlying collateral fair value exceeds the Company’s amortized
cost basis, no reserve is recorded. Small balance receivables on non-accrual status with similar risk characteristics
are evaluated as a separate pool to determine the appropriate reserve for losses using the historical loss information
discussed below.
The Company evaluates finance receivables that are not individually evaluated and share similar risk characteristics
on a collective basis and determines the general allowance for credit losses for both retail and wholesale receivables
based on historical loss information, using past due account data, current market conditions, and expected changes
in future macroeconomic conditions that affect collectability. Historical credit loss data provides relevant
information of expected credit losses. The historical information used includes assumptions regarding the likelihood
of collecting current and past due accounts, repossession rates, and the recovery rate on the underlying collateral
based on used truck values and other pledged collateral or recourse.
The Company has developed a range of loss estimates for each of its country portfolios based on historical
experience, taking into account loss frequency and severity in both strong and weak truck market conditions. A
projection is made of the range of estimated credit losses inherent in the portfolio from which an amount is
determined based on current market conditions and other factors impacting the creditworthiness of the Company’s
borrowers and their ability to repay. Adjustments to historical loss information are made for changes in forecasted
economic conditions that are specific to the industry and markets in which the Company conducts business.
The Company utilizes economic forecasts from third party sources and determines expected losses based on
historical experience under similar market conditions. After determining the appropriate level of the allowance for
credit losses, a provision for losses on finance receivables is charged to income as necessary to reflect management’s
estimate of expected credit losses, net of recoveries, inherent in the portfolio.
45
The adequacy of the allowance is evaluated quarterly based on the most recent past due account information and
current and future market conditions. As accounts become past due, the likelihood that they will not be fully
collected increases. The Company’s experience indicates the probability of not fully collecting past due accounts
ranges between 10% and 70%. Over the past two years, the Company’s year-end 30+ days past due accounts have
ranged between .4% and 1.0% of loan and lease receivables. Historically, a 100 basis point increase in the 30+ days
past due percentage has resulted in an increase in credit losses of 2 to 25 basis points of receivables. At December
31, 2023, 30+ days past dues were 1.0%. If past dues were 100 basis points higher or 2.0% as of December 31, 2023,
the Company’s estimate of credit losses would likely have increased by a range of $2 to $35 million depending on
the extent of the past dues, the estimated value of the collateral as compared to amounts owed and general
economic factors.
Product Warranty
Product warranty, including changes in estimates for pre-existing warranties, is disclosed in Note I of the
consolidated financial statements. The expenses related to product warranty are estimated and recorded at the time
products are sold based on historical and current data and reasonable expectations for the future regarding the
frequency and cost of warranty claims, net of recoveries. Estimates consider product type, geographical differences,
labor rates, and any other known factors affecting the number or amount of expected claim payments. For new
products with no historical experience, reference to similar products is utilized. Management takes actions to
minimize warranty costs through quality-improvement programs; however, actual claim costs incurred could
materially differ from the estimated amounts and require adjustments to the reserve. Historically those adjustments
have not been material. Over the past two years, warranty expense as a percentage of Truck, Parts and Other net
sales and revenues has ranged between 1.9% and 2.9%. If the 2023 warranty expense had been .2% higher as a
percentage of net sales and revenues in 2023, warranty expense would have increased by approximately $67 million.
F O RWA R D - L O O K I N G S TAT E M E N T S :
This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements include statements relating to future results of operations or financial
position and any other statement that does not relate to any historical or current fact. Such statements are based on
currently available operating, financial and other information and are subject to risks and uncertainties that may
affect actual results. Risks and uncertainties include, but are not limited to: a significant decline in industry sales;
competitive pressures; reduced market share; reduced availability of or higher prices for fuel; increased safety,
emissions, or other regulations or tariffs resulting in higher costs and/or sales restrictions; currency or commodity
price fluctuations; lower used truck prices; insufficient or under-utilization of manufacturing capacity; supplier
interruptions; insufficient liquidity in the capital markets; fluctuations in interest rates; changes in the levels of the
Financial Services segment new business volume due to unit fluctuations in new PACCAR truck sales or reduced
market shares; changes affecting the profitability of truck owners and operators; price changes impacting truck sales
prices and residual values; insufficient supplier capacity or access to raw materials and components, including
semiconductors; labor disruptions; shortages of commercial truck drivers; increased warranty costs; cybersecurity
risks to the Company’s information technology systems; pandemics; climate-related risks; global conflicts; litigation,
including European Commission (EC) settlement-related claims; or legislative and governmental regulations. A
more detailed description of these and other risks is included under the heading Part I, Item 1A, “Risk Factors” and
in Note L in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
C O N S O L I D A T E D S T A T E M E N T S O F I N C O M E
46
Year Ended December 31,
TRUCK, PARTS AND OTHER:
Net sales and revenues
Cost of sales and revenues
Research and development
Selling, general and administrative
Interest and other expenses (income), net
Truck, Parts and Other Income Before Income Taxes
FINANCIAL SERVICES:
Interest and fees
Operating lease, rental and other revenues
Revenues
Interest and other borrowing expenses
Depreciation and other expenses
Selling, general and administrative
Provision for losses on receivables
Financial Services Income Before Income Taxes
Investment income
Total Income Before Income Taxes
Income taxes
Net Income
Net Income Per Share
Basic
Diluted
Weighted Average Number of Common Shares Outstanding
Basic
Diluted
See notes to consolidated financial statements.
2023
2022
2021
(millions, except per share data)
$ 33,315.5
$ 27,314.3
$ 21,834.5
26,894.2
410.9
604.3
520.4
28,429.8
4,885.7
1,009.3
802.6
1,811.9
500.6
590.7
149.0
31.3
1,271.6
540.3
23,291.0
341.2
592.4
(109.1)
24,115.5
3,198.8
628.7
876.7
1,505.4
216.3
560.8
133.9
5.5
916.5
588.9
19,092.4
324.1
547.4
(72.6)
19,891.3
1,943.2
524.4
1,163.4
1,687.8
150.9
969.4
129.4
.5
1,250.2
437.6
292.2
5,718.2
1,117.4
$ 4,600.8
61.0
3,848.7
837.1
$ 3,011.6
15.5
2,396.3
530.8
$ 1,865.5
$
$
8.78
8.76
$
$
5.76
5.75
$
$
3.58
3.57
523.9
525.0
522.6
523.4
521.7
522.7
C O N S O L I D A T E D S T A T E M E N T S O F C O M P R E H E N S I V E I N C O M E
Year Ended December 31,
Net income
Other comprehensive income:
Unrealized (losses) gains on derivative contracts
Net (loss) gain arising during the period
Tax effect
Reclassification adjustment
Tax effect
Unrealized gains (losses) on marketable debt securities
Net holding gain (loss)
Tax effect
Reclassification adjustment
Tax effect
Pension plans
Net (loss) gain arising during the period
Tax effect
Reclassification adjustment
Tax effect
Foreign currency translation gain (loss)
Net other comprehensive income (loss)
Comprehensive Income
See notes to consolidated financial statements.
2023
2022
(millions)
2021
47
$ 4,600.8
$ 3,011.6
$ 1,865.5
(174.9)
37.0
111.8
(20.0)
(46.1)
43.2
(10.8)
(3.6)
.9
29.7
17.7
(9.1)
48.0
(8.0)
48.6
(54.9)
13.6
(1.6)
.4
(42.5)
54.2
(14.3)
(33.7)
9.5
15.7
(18.8)
4.7
(2.1)
.5
(15.7)
(5.8)
1.8
6.1
(1.5)
.6
275.3
259.5
$ 4,860.3
170.5
(34.1)
29.6
(7.1)
158.9
(197.3)
(32.3)
$ 2,979.3
343.2
(80.3)
59.5
(14.1)
308.3
(179.1)
129.2
$ 1,994.7
C O N S O L I D A T E D B A L A N C E S H E E T S
48
A S S E T S
December 31,
TRUCK, PARTS AND OTHER:
Current Assets
Cash and cash equivalents
Trade and other receivables, net (allowance for losses: 2023 - $.9, 2022 - $.6)
Marketable securities
Inventories, net
Other current assets
Total Truck, Parts and Other Current Assets
Equipment on operating leases, net
Property, plant and equipment, net
Other noncurrent assets, net
Total Truck, Parts and Other Assets
FINANCIAL SERVICES:
Cash and cash equivalents
Finance and other receivables, net (allowance for losses: 2023 - $133.0, 2022 - $121.1)
Equipment on operating leases, net
Other assets
Total Financial Services Assets
2023
2022
(millions)
$ 6,836.7
2,198.1
1,822.6
2,576.7
680.6
14,114.7
127.6
3,780.1
1,837.1
19,859.5
345.0
17,571.7
2,175.4
871.8
20,963.9
$ 40,823.4
$ 4,544.7
1,919.8
1,614.2
2,198.8
682.0
10,959.5
190.8
3,468.4
1,477.2
16,095.9
146.2
13,791.9
2,612.5
629.0
17,179.6
$ 33,275.5
C O N S O L I D A T E D B A L A N C E S H E E T S
L I A B I L I T I E S A N D S T O C K H O L D E R S ’ E Q U I T Y
December 31,
TRUCK, PARTS AND OTHER:
Current Liabilities
Accounts payable, accrued expenses and other
Dividend payable
Total Truck, Parts and Other Current Liabilities
Residual value guarantees and deferred revenues
Other liabilities
Total Truck, Parts and Other Liabilities
FINANCIAL SERVICES:
Accounts payable, accrued expenses and other
Commercial paper and bank loans
Term notes
Deferred taxes and other liabilities
Total Financial Services Liabilities
STOCKHOLDERS’ EQUITY:
Preferred stock, no par value - authorized 1.0 million shares, none issued
Common stock, $1 par value - authorized 1.2 billion shares;
issued 523.3 million and 522.0 million shares
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total Stockholders’ Equity
See notes to consolidated financial statements.
2023
2022
(millions)
49
$ 5,076.3
1,675.0
6,751.3
142.6
2,121.9
9,015.8
992.3
5,609.9
8,624.6
702.0
15,928.8
$ 4,511.7
974.6
5,486.3
209.2
1,490.1
7,185.6
826.8
3,604.9
7,866.7
624.4
12,922.8
523.3
269.1
15,780.3
(693.9)
15,878.8
$ 40,823.4
522.0
196.1
13,402.4
(953.4)
13,167.1
$ 33,275.5
C O N S O L I D A T E D S T A T E M E N T S O F C A S H F L O W S
50
Year Ended December 31,
OPERATING ACTIVITIES:
Net Income
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization:
Property, plant and equipment
Equipment on operating leases and other
Provision for losses on financial services receivables
Deferred taxes
Other, net
Pension contributions
Change in operating assets and liabilities:
(Increase) decrease in assets other than cash and cash equivalents:
Receivables:
Trade and other receivables
Wholesale receivables on new trucks
Inventories
Other assets, net
Increase (decrease) in liabilities:
Accounts payable and accrued expenses
Residual value guarantees and deferred revenues
Other liabilities, net
Net Cash Provided by Operating Activities
INVESTING ACTIVITIES:
Originations of retail loans and finance leases
Collections on retail loans and finance leases
Net (increase) decrease in wholesale receivables on used equipment
Purchases of marketable debt securities
Proceeds from sales and maturities of marketable debt securities
Payments for property, plant and equipment
Acquisitions of equipment for operating leases
Proceeds from asset disposals
Other, net
Net Cash Used in Investing Activities
FINANCING ACTIVITIES:
Payments of cash dividends
Purchases of treasury stock
Proceeds from stock compensation transactions
Net increase in commercial paper, short-term bank loans and other
Proceeds from term debt
Payments on term debt
Net Cash Provided by (Used in) Financing Activities
Effect of exchange rate changes on cash
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
See notes to consolidated financial statements.
2023
2022
(millions)
2021
$ 4,600.8
$ 3,011.6
$ 1,865.5
415.0
508.9
31.3
(303.7)
46.5
(27.3)
(430.7)
(1,266.4)
(350.7)
(127.2)
375.8
(36.8)
754.5
4,190.0
(6,378.2)
4,330.4
(29.1)
(967.2)
803.6
(695.0)
(567.5)
614.5
17.5
(2,871.0)
332.2
458.0
5.5
(208.0)
13.9
(39.1)
(441.7)
(935.4)
(272.7)
(31.9)
840.3
(44.3)
338.6
3,027.0
(5,058.7)
3,888.0
(15.9)
(888.4)
718.1
(525.0)
(865.5)
687.7
26.7
(2,033.0)
270.0
633.3
.5
(208.6)
20.3
(25.1)
(412.9)
90.8
(628.0)
(129.8)
693.4
(82.4)
99.7
2,186.7
(4,570.6)
4,113.3
12.2
(903.1)
727.0
(559.1)
(1,073.7)
904.1
(12.8)
(1,362.7)
(1,518.6)
(3.5)
51.5
1,721.0
3,085.0
(2,233.2)
1,102.2
69.6
2,490.8
4,690.9
$ 7,181.7
(1,004.7)
(2.1)
35.7
370.1
3,171.7
(2,265.8)
304.9
(36.3)
1,262.6
3,428.3
$ 4,690.9
(708.0)
(1.5)
37.5
24.7
2,101.1
(2,336.7)
(882.9)
(52.4)
(111.3)
3,539.6
$ 3,428.3
C O N S O L I D A T E D S T A T E M E N T S O F S T O C K H O L D E R S ’ E Q U I T Y
December 31,
COMMON STOCK, $1 PAR VALUE:
Balance at beginning of year
50% stock dividend
Stock compensation
Balance at end of year
ADDITIONAL PAID-IN CAPITAL:
Balance at beginning of year
Treasury stock retirement
Stock compensation
Balance at end of year
TREASURY STOCK, AT COST:
Balance at beginning of year
Purchases, shares: 2023 - .05; 2022 - .04; 2021 - .02
Retirements
Balance at end of year
RETAINED EARNINGS:
Balance at beginning of year
Net income
Cash dividends declared on common stock,
per share: 2023 - $4.24; 2022 - $2.80; 2021 - $1.89
50% stock dividend
Balance at end of year
ACCUMULATED OTHER COMPREHENSIVE LOSS:
Balance at beginning of year
Other comprehensive income (loss)
Balance at end of year
Total Stockholders’ Equity
See notes to consolidated financial statements.
2023
2022
2021
51
(millions, except per share data)
$
522.0
$
1.3
523.3
196.1
(3.5)
76.5
269.1
(3.5)
3.5
347.3
174.0
.7
522.0
142.0
(2.1)
56.2
196.1
(2.1)
2.1
$
346.6
.7
347.3
88.5
(1.5)
55.0
142.0
(1.5)
1.5
13,402.4
4,600.8
(2,222.9)
15,780.3
12,025.8
3,011.6
(1,461.0)
(174.0)
13,402.4
11,148.5
1,865.5
(988.2)
12,025.8
(953.4)
259.5
(693.9)
$ 15,878.8
(921.1)
(32.3)
(953.4)
$ 13,167.1
(1,050.3)
129.2
(921.1)
$ 11,594.0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
52
A .
S I G N I F I C A N T A C C O U N T I N G P O L I C I E S
Description of Operations: PACCAR Inc (the Company or PACCAR) is a multinational company operating in three
principal segments: (1) the Truck segment includes the design and manufacture of high-quality, light-, medium- and
heavy-duty commercial trucks; (2) the Parts segment includes the distribution of aftermarket parts for trucks and
related commercial vehicles; and (3) the Financial Services segment (PFS) includes finance and leasing products and
services provided to customers and dealers. PACCAR’s finance and leasing activities are principally related to PACCAR
products and associated equipment. PACCAR’s sales and revenues are derived primarily from North America and
Europe. The Company also operates in Australia and Brasil and sells trucks and parts to customers in Asia, Africa, the
Middle East and South America.
Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly
owned domestic and foreign subsidiaries. All significant intercompany accounts and transactions are eliminated in
consolidation.
Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those estimates.
Revenue Recognition:
Truck, Parts and Other: The Company enters into sales contracts with customers associated with purchases of the
Company’s products and services including trucks, parts, product support, and other related services. Generally, the
Company recognizes revenue for the amount of consideration it will receive for delivering a product or service to a
customer. Revenue is recognized when the customer obtains control of the product or receives benefits of the service.
The Company excludes sales taxes, value added taxes and other related taxes assessed by government agencies from
revenue. There are no significant financing components included in product or services revenue since generally
customers pay shortly after the products or services are transferred. In the Truck and Parts segments, when the
Company grants extended payment terms on selected receivables and charges interest, interest income is recognized
when earned.
The Company recognizes truck and parts sales as revenues when control of the products is transferred to customers
which generally occurs upon shipment, except for certain truck sales which are subject to a residual value guarantee
(RVG) by the Company. The standard payment term for trucks and aftermarket parts is typically within 30 days, but the
Company may grant extended payment terms on selected receivables. The Company recognizes revenue for the invoice
amount adjusted for estimated sales incentives and returns. Sales incentives and returns are estimated based on historical
experience and are adjusted to current period revenue when the most likely amount of consideration the Company
expects to receive changes or becomes fixed. Truck and parts sales include a standard product warranty which is
included in cost of sales. The Company has elected to treat delivery services as a fulfillment activity with revenues
recognized when the customer obtains control of the product. Delivery revenue is included in revenues and the related
costs are included in cost of sales. The Company is not disclosing truck order backlog, as a significant majority of the
backlog has a duration of less than one year.
Truck sales with RVGs that allow customers the option to return their truck are accounted for as a sale when the
customer does not have an economic incentive to return the truck to the Company, or as an operating lease when the
customer does have an economic incentive to return the truck. The estimate of customers’ economic incentive to return
the trucks is based on an analysis of historical guaranteed buyback value and estimated market value. When truck sales
with RVGs are accounted for as a sale, revenue is recognized when the truck is transferred to the customer less an
amount for expected returns. Expected return rates are estimated by using a historical return rate.
Aftermarket parts sales allow for returns which are estimated at the time of sale based on historical data. Parts dealer
services and other revenues are recognized as services are performed.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
The following table presents the balance sheet classification of the estimated value of the returned goods assets and the
related return liabilities:
53
At December 31,
2023
2022
assets
liabilities
assets
liabilities
Trucks:
Other current assets
Accounts payable, accrued expenses
and other
Other noncurrent assets, net
Other liabilities
Parts:
Other current assets
Accounts payable, accrued expenses
and other
$
147.3
$
183.0
186.7
334.0
86.8
86.8
$
$
$
$
$
$
$
149.5
196.4
345.9
216.3
216.3
284.6
467.6
77.7
77.7
$
$
$
$
$
$
$
185.0
298.9
483.9
181.4
181.4
The Company’s total commitment to acquire trucks at a guaranteed value for contracts accounted for as a sale was
$744.0 at December 31, 2023.
Revenues from extended warranties, operating leases and other include optional extended warranty and repair and
maintenance (R&M) service contracts which can be purchased for periods generally ranging up to five years. The
Company defers revenue based on stand-alone observable selling prices when it receives payments in advance and
generally recognizes the revenue on a straight-line basis over the warranty or R&M contract periods. See Note I,
Product Support Liabilities, in the Notes to the Consolidated Financial Statements for further information. Also
included are truck sales with an RVG accounted for as an operating lease. A liability is created for the residual value
obligation with the remainder of the proceeds recorded as deferred revenue. The deferred revenue is recognized on a
straight-line basis over the guarantee period, which typically ranges from three to five years. Total operating lease
revenue from truck sales with RVGs for the years ended December 31, 2023, 2022 and 2021 was $69.7, $105.9 and
$113.8, respectively.
Revenue from winch sales and other is primarily derived from the industrial winch business. Winch sales are recognized
when the product is transferred to a customer, which generally occurs upon shipment. Also within this category are
other revenues not attributable to a reportable segment.
Financial Services: The Company’s Financial Services segment products include loans to customers collateralized by the
vehicles being financed, finance leases for retail customers and dealers, dealer wholesale financing which includes
floating-rate wholesale loans to PACCAR dealers for new and used trucks, and operating leases which include rentals on
Company owned equipment. Interest income from finance and other receivables is recognized using the interest
method. Certain loan origination costs are deferred and amortized to interest income over the expected life of the
contracts using the straight-line method which approximates the interest method.
Operating lease rental revenue is recognized on a straight-line basis over the term of the lease. Customer contracts may
include additional services such as excess mileage, repair and maintenance and other services on which revenue is
recognized when earned. The Company’s full-service lease arrangements bundle these additional services. Rents for full-
service lease contracts are allocated between lease and non-lease components based on the relative stand-alone price of
each component. Taxes, such as sales and use and value added, which are collected by the Company from a customer,
are excluded from the measurement of lease income and expenses. Rental revenues for the years ended December 31,
2023, 2022 and 2021 were $736.9, $788.8 and $831.6, respectively. Depreciation and related leased unit operating
expenses were $551.9, $490.0 and $665.7 for the years ended December 31, 2023, 2022 and 2021, respectively.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
54
Recognition of interest income and rental revenue is suspended (put on non-accrual status) when the receivable
becomes more than 90 days past the contractual due date or earlier if some other event causes the Company to
determine that collection is not probable. Accordingly, no finance receivables more than 90 days past due were accruing
interest at December 31, 2023 or December 31, 2022. Recognition is resumed if the receivable becomes current by the
payment of all amounts due under the terms of the existing contract and collection of remaining amounts is
considered probable (if not contractually modified) or if the customer makes scheduled payments for three months
and collection of remaining amounts is considered probable (if contractually modified). Payments received while
the finance receivable is on non-accrual status are applied to interest and principal in accordance with the
contractual terms.
Finance leases are secured by the trucks and related equipment being leased and the lease terms generally range
from three to five years depending on the type and use of the equipment. The lessee is required to either purchase
the equipment or guarantee to the Company a stated residual value upon the disposition of the equipment at the
end of the finance lease term.
Operating lease terms generally range from three to five years. At the end of the operating lease term, the lessee has
the option to return the equipment to the Company or purchase the equipment at its fair market value.
The Company determines its estimate of the residual value of leased vehicles by considering the length of the lease
term, the truck model, the expected usage of the truck and anticipated market demand. If the sales price of the
truck at the end of the agreement differs from the Company’s estimated residual value, a gain or loss will result.
Future market conditions, changes in government regulations and other factors outside the Company’s control could
impact the ultimate sales price of trucks returned under these contracts. Residual values are reviewed regularly and
adjusted if market conditions warrant.
Cash and Cash Equivalents: Cash equivalents consist of liquid investments with a maturity at date of purchase of 90
days or less.
Investments in Marketable Securities:
Debt Securities: The Company’s investments in marketable debt securities are classified as available-for-sale. These
investments are stated at fair value and may include an allowance for credit losses. Changes in the allowance for
credit losses are recognized in the current period earnings and any unrealized gains or losses, net of tax, are
included as a component of accumulated other comprehensive income (loss) (AOCI).
The Company utilizes third-party pricing services for all of its marketable debt security valuations. The Company
reviews the pricing methodology used by the third-party pricing services, including the manner employed to collect
market information. On a quarterly basis, the Company also performs review and validation procedures on the
pricing information received from the third-party providers. These procedures help ensure the fair value
information used by the Company is determined in accordance with applicable accounting guidance.
The Company evaluates its investment in marketable debt securities at the end of each reporting period to
determine if a decline in fair value is the result of credit losses or unrealized losses. In assessing credit losses, the
Company considers the collectability of principal and interest payments by monitoring changes to issuers’ credit
ratings, specific credit events associated with individual issuers as well as the credit ratings of any financial
guarantor. The Company considers its intent for selling the security and whether it is more likely than not the
Company will be able to hold the security until the recovery of any credit losses and unrealized losses. Charges
against the allowance for credit losses occur when a security with credit losses is sold or the Company no longer
intends to hold that security.
Equity Securities: Marketable equity securities are traded on active exchanges and are measured at fair value. The
realized and unrealized gains (losses) are recognized in investment income.
Receivables:
Trade and Other Receivables: The Company’s trade and other receivables are recorded at cost, net of allowances. At
December 31, 2023 and 2022, respectively, trade and other receivables included trade receivables from dealers and
customers of $1,822.7 and $1,600.1 and other receivables of $375.4 and $319.7 relating primarily to value added tax
receivables and supplier allowances and rebates.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
Finance and Other Receivables:
Loans – Loans represent fixed or floating-rate loans to customers collateralized by the vehicles purchased and are
recorded at amortized cost.
55
Finance leases – Finance leases are sales-type finance leases, which lease equipment to retail customers and dealers.
These leases are reported as the sum of minimum lease payments receivable and estimated residual value of the
property subject to the contracts, reduced by unearned interest.
Dealer wholesale financing – Dealer wholesale financing is floating-rate wholesale loans to PACCAR dealers for new
and used trucks and are recorded at amortized cost. The loans are collateralized by the trucks being financed.
Operating lease receivables and other – Operating lease receivables and other include monthly rentals due on
operating leases, unamortized loan and lease origination costs, interest on loans and other amounts due within one
year in the normal course of business.
Allowance for Credit Losses:
Truck, Parts and Other: The Company historically has not experienced significant losses or past due amounts on
trade and other receivables in its Truck, Parts and Other businesses. Accounts are considered past due once the
unpaid balance is over 30 days outstanding based on contractual payment terms. Accounts are charged off against
the allowance for credit losses when, in the judgment of management, they are considered uncollectible. The
allowance for credit losses for Truck, Parts and Other were $.9 and $.6 for the years ended December 31, 2023 and
2022, respectively. Net charge-offs were nil for the year ended December 31, 2023, $.2 for the year ended December
31, 2022 and nil for the year ended December 31, 2021.
Financial Services: The Company continuously monitors the payment performance of its finance receivables. For
large retail finance customers and dealers with wholesale financing, the Company regularly reviews their financial
statements and makes site visits and phone contact as appropriate. If the Company becomes aware of circumstances
that could cause those customers or dealers to face financial difficulty, whether or not they are past due, the
customers are placed on a watch list.
The Company modifies loans and finance leases in the normal course of its Financial Services operations. The
Company may modify loans and finance leases for commercial reasons or for credit reasons. Modifications for
commercial reasons are changes to contract terms for customers that are not considered to be in financial difficulty.
Insignificant delays are modifications extending terms up to three months for customers experiencing some short-
term financial stress, but not considered to be in financial difficulty. Modifications for credit reasons are changes to
contract terms for customers considered to be in financial difficulty. The Company’s modifications typically result
in granting more time to pay the contractual amounts owed and charging a fee and interest for the term of the
modification.
When considering whether to modify customer accounts for credit reasons, the Company evaluates the
creditworthiness of the customers and modifies those accounts that the Company considers likely to perform under
the modified terms. The Company does not typically grant credit modifications for customers that do not meet
minimum underwriting standards since the Company normally repossesses the financed equipment in these
circumstances.
On average, commercial and other modifications extended contractual terms by approximately three months in
2023 and 2022, and did not have a significant effect on the weighted average term or interest rate of the total
portfolio at December 31, 2023 and 2022.
The Company has developed a systematic methodology for determining the allowance for credit losses for its two
portfolio segments, retail and wholesale. The retail segment consists of retail loans and sales-type finance leases, net
of unearned interest. The wholesale segment consists of truck inventory financing loans to dealers that are
collateralized by trucks and other collateral. The wholesale segment generally has less risk than the retail segment.
Wholesale receivables generally are shorter in duration than retail receivables, and the Company requires periodic
reporting of the wholesale dealer’s financial condition, conducts periodic audits of the trucks being financed and in
many cases, obtains guarantees or other security such as dealership assets. In determining the allowance for credit
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
56
losses, retail loans and finance leases are evaluated together since they relate to a similar customer base, their
contractual terms require regular payment of principal and interest, generally over three to five years, and they are
secured by the same type of collateral. The allowance for credit losses consists of both specific and general reserves.
The Company individually evaluates certain finance receivables for expected credit losses. Finance receivables that
are evaluated individually consist of all wholesale accounts and certain large retail accounts with past due balances
or otherwise determined to be at a higher risk of loss. In general, finance receivables that are 90 days past due are
placed on non-accrual status. Finance receivables on non-accrual status which have been performing for 90
consecutive days are placed on accrual status if it is deemed probable that the Company will collect all principal and
interest payments.
Individually evaluated receivables on non-accrual status are generally considered collateral dependent. Large balance
retail and all wholesale receivables on non-accrual status are individually evaluated to determine the appropriate
reserve for losses. The determination of reserves for large balance receivables on non-accrual status considers the
fair value of the associated collateral. When the underlying collateral fair value exceeds the Company’s amortized
cost basis, no reserve is recorded. Small balance receivables on non-accrual status with similar risk characteristics
are evaluated as a separate pool to determine the appropriate reserve for losses using the historical loss information
discussed below.
The Company evaluates finance receivables that are not individually evaluated and share similar risk characteristics
on a collective basis and determines the general allowance for credit losses for both retail and wholesale receivables
based on historical loss information, using past due account data, current market conditions, and expected changes
in future macroeconomic conditions that affect collectability. Historical credit loss data provides relevant
information of expected credit losses. The historical information used includes assumptions regarding the likelihood
of collecting current and past due accounts, repossession rates, and the recovery rate on the underlying collateral
based on used truck values and other pledged collateral or recourse.
The Company has developed a range of loss estimates for each of its country portfolios based on historical
experience, taking into account loss frequency and severity in both strong and weak truck market conditions. A
projection is made of the range of estimated credit losses inherent in the portfolio from which an amount is
determined based on current market conditions and other factors impacting the creditworthiness of the Company’s
borrowers and their ability to repay. Adjustments to historical loss information are made for changes in forecasted
economic conditions that are specific to the industry and markets in which the Company conducts business. The
Company utilizes economic forecasts from third party sources and determines expected losses based on historical
experience under similar market conditions. After determining the appropriate level of the allowance for credit
losses, a provision for losses on finance receivables is charged to income as necessary to reflect management’s
estimate of expected credit losses, net of recoveries, inherent in the portfolio.
In determining the fair value of the collateral, the Company uses a pricing matrix and categorizes the fair value as
Level 2 in the hierarchy of fair value measurement. The pricing matrix is reviewed quarterly and updated as
appropriate. The pricing matrix considers the make, model and year of the equipment as well as recent sales prices
of comparable equipment sold individually, which is the lowest unit of account, through wholesale channels to the
Company’s dealers (principal market). The fair value of the collateral also considers the overall condition of the
equipment.
Accounts are charged off against the allowance for credit losses when, in the judgment of management, they are
considered uncollectible, which generally occurs upon repossession of the collateral. Typically the timing between
the repossession and charge-off is not significant. In cases where repossession is delayed (e.g., for legal proceedings),
the Company records a partial charge-off. The charge-off is determined by comparing the fair value of the collateral,
less cost to sell, to the amortized cost basis.
Inventories: Inventories are stated at the lower of cost or net realizable value. Cost of inventories is determined
principally by the first-in, first-out (FIFO) method. Cost of sales and revenues include shipping and handling costs
incurred to deliver products to dealers and customers.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
Equipment on Operating Leases: The Company’s Financial Services segment leases equipment under operating
leases to its customers. In addition, in the Truck segment, equipment sold to customers in Europe subject to an
RVG by the Company may be accounted for as an operating lease. Equipment is recorded at cost and is depreciated
on the straight-line basis to the lower of the estimated residual value or guarantee value. Lease and guarantee
periods generally range from three to five years. Estimated useful lives of the equipment range from three to ten
years. The Company reviews residual values of equipment on operating leases periodically to determine that
recorded amounts are appropriate.
57
Property, Plant and Equipment: Property, plant and equipment are stated at cost. Depreciation is computed by the
straight-line method based on the estimated useful lives of various classes of assets. Certain production tooling and
equipment are amortized on a unit of production basis.
Long-lived Assets and Goodwill: The Company evaluates the carrying value of property, plant and equipment when
events and circumstances warrant a review. Goodwill is tested for impairment at least on an annual basis. There
were no significant impairment charges for the three years ended December 31, 2023. Goodwill was $107.4 and
$104.1 at December 31, 2023 and 2022, respectively. The increase in value was due to currency translation.
Product Support Liabilities: Product support liabilities include estimated future payments related to product
warranties and deferred revenues on optional extended warranties and R&M contracts. The Company generally
offers one year warranties covering most of its vehicles and related aftermarket parts. For vehicles equipped with
engines manufactured by PACCAR, the Company generally offers two year warranties on the engine. Specific terms
and conditions vary depending on the product and the country of sale. Optional extended warranty and R&M
contracts can be purchased for periods which generally range up to five years. Warranty expenses and reserves are
estimated and recorded at the time products or contracts are sold based on historical and current data and
reasonable expectations for the future regarding the frequency and cost of warranty claims, net of recoveries. The
Company periodically assesses the adequacy of its recorded liabilities and adjusts them as appropriate to reflect
actual experience. Revenue from extended warranty and R&M contracts is deferred and recognized to income
generally on a straight-line basis over the contract period. Warranty and R&M costs on these contracts are
recognized as incurred.
Derivative Financial Instruments: As part of its risk management strategy, the Company enters into derivative
contracts to hedge against the risks of interest rates, foreign currency rates and commodity prices. Certain derivative
instruments designated as fair value hedges, cash flow hedges or net investment hedges are subject to hedge
accounting. Derivative instruments that are not subject to hedge accounting are held as derivatives not designated as
hedged instruments. The Company’s policies prohibit the use of derivatives for speculation or trading. At the
inception of each hedge relationship, the Company documents its risk management objectives, procedures and
accounting treatment. All of the Company’s interest-rate, commodity as well as certain foreign-exchange contracts
are transacted under International Swaps and Derivatives Association (ISDA) master agreements. Each agreement
permits the net settlement of amounts owed in the event of default and certain other termination events. For
derivative financial instruments, the Company has elected not to offset derivative positions in the balance sheet with
the same counterparty under the same agreements and is not required to post or receive collateral.
Exposure limits and minimum credit ratings are used to minimize the risks of counterparty default. The Company’s
maximum exposure to potential default of its derivative counterparties is limited to the asset position of its
derivative portfolio. The asset position of the Company’s derivative portfolio was $21.0 at December 31, 2023.
The Company assesses hedges at inception and on an ongoing basis to determine the designated derivatives are
highly effective in offsetting changes in fair values or cash flow of the hedged items. Hedge accounting is
discontinued prospectively when the Company determines a derivative financial instrument has ceased to be a
highly effective hedge. Cash flows from derivative instruments are included in Operating activities in the
Consolidated Statements of Cash Flows.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
58
Government Grants: The Company receives incentives from U.S. and non-U.S. governmental entities in the form of
tax rebates or credits, grants, and loans. The benefit is generally recorded when all conditions attached to the
incentive have been met and there is reasonable assurance of the receipt. Government incentives are recorded in
accordance with their purpose as a reduction of expense, a reduction of the cost of the capital investment, or other
income. The amount of government incentives recorded as a reduction of expenses and the amount of grants
receivable for the years ended December 31, 2023, 2022 and 2021 are immaterial.
Foreign Currency Translation: For most of the Company’s foreign subsidiaries, the local currency is the functional
currency. All assets and liabilities are translated at year-end exchange rates and all income statement amounts are
translated at the weighted average rates for the period. Translation adjustments are recorded in AOCI. The
Company uses the U.S. dollar as the functional currency for all but one of its Mexican subsidiaries, which uses the
local currency. For the U.S. functional currency entities in Mexico, inventories, cost of sales, property, plant and
equipment and depreciation are remeasured at historical rates and resulting adjustments are included in net income.
Earnings per Share: Basic earnings per common share are computed by dividing earnings by the weighted average
number of common shares outstanding, plus the effect of any participating securities. Diluted earnings per common
share are computed assuming that all potentially dilutive securities are converted into common shares under the
treasury stock method.
On December 6, 2022, the Board of Directors declared a 50% common stock dividend paid on February 7, 2023, to
stockholders of record on January 17, 2023, with fractional shares paid in cash. This resulted in the issuance of
174,035,361 additional shares and 411 fractional shares paid in cash. For 2022 and 2021, net income per share,
weighted average number of common shares outstanding and cash dividends declared per share on common stock
have been restated for the effect of the 50% dividend.
New Accounting Pronouncements: In November 2023, the Financial Accounting Standards Board (FASB) issued ASU
2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this
ASU improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant
segment expenses. This ASU is effective for annual periods beginning after December 15, 2023, and interim periods
within annual periods beginning after December 15, 2024. Early adoption is permitted. The amendments in this ASU
should be applied retrospectively to all prior periods presented. The implementation of this ASU will result in
additional disclosures and will not have an impact on the Company’s consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax
Disclosures. The amendments in this ASU require entities to disclose certain, specific categories within the rate
reconciliation and enhance disclosures regarding income taxes paid and income tax expense. This ASU is effective for
annual periods beginning after December 15, 2024. Early adoption is permitted. The amendments in this ASU should
be applied on a prospective basis; however, retrospective application is permitted. The implementation of this ASU
will result in additional disclosures and will not have an impact on the Company’s consolidated financial statements.
The Company adopted the following standard on January 1, 2023, which had no material impact on the Company’s
consolidated financial statements.
standard
2022-02
Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings
and Vintage Disclosures
description
The FASB also issued the following standard, which is not expected to have a material impact on the Company’s
consolidated financial statements.
standard
2022-03*
Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities
Subject to Contractual Sale Restrictions
description
effective date
January 1, 2024
* The Company will adopt on the effective date.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
B .
S A L E S A N D R E V E N U E S
The following table disaggregates Truck, Parts and Other revenues by major sources:
59
2023
2022
2021
Year Ended December 31,
Truck
Truck sales
Revenues from extended warranties, operating leases and other
Parts
Parts sales
Revenues from dealer services and other
Winch sales and other
Truck, Parts and Other sales and revenues
$ 25,946.4
900.0
26,846.4
6,223.1
191.3
6,414.4
54.7
$ 33,315.5
The following table summarizes Financial Services lease revenues by lease type:
Year Ended December 31,
Finance lease revenues
Operating lease revenues
Total lease revenues
$
2023
271.5
736.9
$ 1,008.4
C .
I N V E S T M E N T S I N M A R K E TA B L E S E C U R I T I E S
Marketable securities consisted of the following at December 31:
$ 20,644.8
841.4
21,486.2
5,596.8
167.5
5,764.3
63.8
$ 27,314.3
2022
184.1
788.8
972.9
$
$
$ 15,989.7
810.0
16,799.7
4,809.7
134.6
4,944.3
90.5
$ 21,834.5
$
2021
187.0
831.6
$ 1,018.6
2023
Marketable debt securities
U.S. tax-exempt securities
U.S. taxable municipal / non-U.S.
provincial bonds
U.S. corporate securities
U.S. government securities
Non-U.S. corporate securities
Non-U.S. government securities
Other debt securities
Marketable equity securities
Total marketable securities
2022
Marketable debt securities
U.S. tax-exempt securities
U.S. taxable municipal / non-U.S.
provincial bonds
U.S. corporate securities
U.S. government securities
Non-U.S. corporate securities
Non-U.S. government securities
Other debt securities
Marketable equity securities
Total marketable securities
cost
unrealized
gains
unrealized
losses
fair
value
$
312.5
$
244.9
357.1
159.2
529.4
141.0
92.8
10.0
$ 1,846.9
$
1.2
.8
1.4
.6
2.3
1.5
.3
8.1
$
3.0
$
310.7
5.6
5.2
1.7
7.5
1.3
2.5
5.6
32.4
$
240.1
353.3
158.1
524.2
141.2
90.6
4.4
$ 1,822.6
cost
unrealized
gains
unrealized
losses
fair
value
$
452.8
$
191.6
262.5
118.0
467.9
78.9
99.4
10.0
$ 1,681.1
$
.5
.1
.1
.2
.9
$
8.2
$
445.1
10.8
11.6
3.1
17.9
2.7
4.7
8.8
67.8
$
180.8
251.0
115.0
450.0
76.4
94.7
1.2
$ 1,614.2
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
60
The cost of marketable debt securities is adjusted for amortization of premiums and accretion of discounts to
maturity. Amortization, accretion, interest and dividend income and realized gains and losses are included in
investment income. The cost of securities sold is based on the specific identification method. Gross realized gains
were $.9, $.5 and $2.1, and gross realized losses were $4.5, $2.3 and $.4 for the years ended December 31, 2023,
2022 and 2021, respectively.
Net realized gains (losses) on marketable equity securities were $3.2, $(5.2) and nil for the years ended December
31, 2023, 2022 and 2021, respectively.
Marketable debt securities with continuous unrealized losses and their related fair values were as follows:
At December 31,
2023
2022
Fair value
Unrealized losses
less than
twelve months
289.0
1.6
$
twelve months
or greater
798.5
25.2
$
less than
twelve months
889.2
21.5
$
twelve months
or greater
608.4
$
37.5
The unrealized losses on marketable debt securities above were due to higher yields on certain securities. The
Company did not identify any indicators of a credit loss in its assessments. Accordingly, no allowance for credit
losses was recorded at December 31, 2023 and December 31, 2022. The Company does not currently intend, and it
is more likely than not that it will not be required, to sell the investment securities before recovery of the unrealized
losses. The Company expects that the contractual principal and interest will be received on the investment
securities.
Contractual maturities on marketable debt securities at December 31, 2023 were as follows:
Maturities:
Within one year
One to five years
Six to ten years
More than ten years
D .
I N V E N T O R I E S
amortized
cost
$
488.3
1,336.0
.7
11.9
$ 1,836.9
fair
value
$
482.5
1,324.5
.6
10.6
$ 1,818.2
Inventories are stated at the lower of cost or net realizable value. Cost of inventories is determined principally by
the first-in, first-out (FIFO) method.
Inventories include the following:
At December 31,
Finished products
Work in process and raw materials
2023
$ 1,084.0
1,492.7
$ 2,576.7
$
2022
871.8
1,327.0
$ 2,198.8
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
E .
F I N A N C E A N D O T H E R R E C E I VA B L E S
Finance and other receivables include the following:
At December 31,
Loans
Finance leases
Dealer wholesale financing
Operating lease receivables and other
Less allowance for losses:
Loans and leases
Dealer wholesale financing
Operating lease receivables and other
61
2023
$ 8,594.7
4,785.7
4,147.8
176.5
$ 17,704.7
(127.0)
(2.7)
(3.3)
$ 17,571.7
2022
$ 7,229.1
3,786.4
2,772.1
125.4
$ 13,913.0
(114.8)
(3.4)
(2.9)
$ 13,791.9
Included in Finance and other receivables, net on the Consolidated Balance Sheets is accrued interest receivable (net
of allowance for credit losses) of $88.4 and $44.1 as of December 31, 2023 and December 31, 2022, respectively. The
net activity of dealer direct loans and dealer wholesale financing on new trucks is shown in the operating section of
the Consolidated Statements of Cash Flows since those receivables finance the sale of Company inventory.
Annual minimum payments due on loans are as follows:
Beginning January 1,
2024
2025
2026
2027
2028
Thereafter
loans
$ 2,840.0
2,126.0
1,679.9
1,181.3
619.3
148.2
$ 8,594.7
Annual minimum payments due on finance lease receivables and a reconciliation of the undiscounted cash flows to
the net investment in finance leases are as follows:
Beginning January 1,
2024
2025
2026
2027
2028
Thereafter
Unguaranteed residual values
Unearned interest on finance leases
Net investment in finance leases
finance
leases
$ 1,651.1
1,359.9
1,036.1
714.6
367.0
162.2
$ 5,290.9
205.2
(710.4)
$ 4,785.7
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
62
Experience indicates substantially all of dealer wholesale financing will be repaid within one year. In addition,
repayment experience indicates that some loans, leases and other finance receivables will be paid prior to contract
maturity, while others may be extended or modified.
For the following credit quality disclosures, finance receivables are classified into two portfolio segments, wholesale
and retail. The retail portfolio is further segmented into dealer retail and customer retail. The dealer wholesale
segment consists of truck inventory financing to PACCAR dealers. The dealer retail segment consists of loans and
leases to participating dealers and franchises that use the proceeds to fund customers’ acquisition of commercial
vehicles and related equipment. The customer retail segment consists of loans and leases directly to customers for
the acquisition of commercial vehicles and related equipment. Customer retail receivables are further segregated
between fleet and owner/operator classes. The fleet class consists of customer retail accounts operating five or more
trucks. All other customer retail accounts are considered owner/operator. These two classes have similar
measurement attributes, risk characteristics and common methods to monitor and assess credit risk.
Allowance for Credit Losses: The allowance for credit losses is summarized as follows:
Balance at January 1
Provision for losses
Charge-offs
Recoveries
Currency translation and other
Balance at December 31
Balance at January 1
Provision for losses
Charge-offs
Recoveries
Currency translation and other
Balance at December 31
Balance at January 1
Provision for losses
Charge-offs
Recoveries
dealer
customer
2023
wholesale
$
3.4
(.6)
(.2)
$
retail
2.2
(.3)
$
.1
2.7
$
$
1.9
$
other*
2.9
.4
(1.7)
1.4
.3
3.3
$
$
total
121.1
31.3
(30.3)
7.0
3.9
133.0
retail
112.6
31.8
(28.4)
5.6
3.5
125.1
$
$
2022
dealer
customer
wholesale
$
3.3
.1
$
retail
7.1
(4.9)
$
$
3.4
$
2.2
$
retail
104.4
12.0
(8.5)
7.5
(2.8)
112.6
$
$
other*
2.1
(1.7)
(.5)
2.2
.8
2.9
$
$
total
116.9
5.5
(9.0)
9.7
(2.0)
121.1
dealer
customer
2021
wholesale
$
3.4
$
retail
8.4
(1.3)
$
retail
112.0
.6
(12.3)
6.2
(2.1)
104.4
$
$
other*
3.2
1.2
(2.5)
.3
(.1)
2.1
$
$
total
127.0
.5
(14.8)
6.5
(2.3)
116.9
Currency translation and other
Balance at December 31
(.1)
3.3
$
$
7.1
$
* Operating lease and other trade receivables.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
Credit Quality: The Company’s customers are principally concentrated in the transportation industry in North
America, Europe, Australia and Brasil. The Company’s portfolio assets are diversified over a large number of
customers and dealers with no single customer or dealer balances representing over 5% of the total portfolio assets.
The Company retains as collateral a security interest in the related equipment.
63
At the inception of each contract, the Company considers the credit risk based on a variety of credit quality factors
including prior payment experience, customer financial information, credit-rating agency ratings, loan-to-value
ratios and other internal metrics. On an ongoing basis, the Company monitors credit quality based on past due
status and collection experience as there is a meaningful correlation between the past due status of customers and
the risk of loss.
The Company has three credit quality indicators: performing, watch and at-risk. Performing accounts pay in
accordance with the contractual terms and are not considered high-risk. Watch accounts include accounts 31 to 90
days past due and large accounts that are performing but are considered to be high-risk. Watch accounts are not
collateral dependent. At-risk accounts are collateral dependent, including accounts over 90 days past due and other
accounts on non-accrual status.
The tables below summarize the amortized cost basis of the Company’s finance receivables within each credit
quality indicator by year of origination and portfolio class and current period gross charge-offs of the Company’s
finance receivables by year of origination and portfolio class.
2 0 2 3
2 0 2 2
2 0 2 1
2 0 2 0
2 0 1 9
pri o r
t ota l
revolving
loans
$ 4,129.8
18.0
$ 4,147.8
At December 31, 2023
Amortized Cost:
Dealer:
Wholesale:
Performing
Watch
Retail:
Performing
Total dealer
Customer retail:
Fleet:
Performing
Watch
At-risk
Owner/operator:
Performing
Watch
At-risk
Total customer retail
280.7
$
$
280.7
$ 4,428.5
$
$
$
789.1
789.1
789.1
$
$
$
520.0
520.0
520.0
$
$
$
291.2
291.2
291.2
$ 4,601.7
46.0
42.0
$ 4,689.7
$
460.9
2.0
.6
$
463.5
$ 5,153.2
$ 2,667.2
32.0
31.0
$ 2,730.2
$
332.9
3.2
1.3
$
337.4
$ 3,067.6
$ 1,309.5
7.5
12.9
$ 1,329.9
$
263.6
2.2
1.1
$
266.9
$ 1,596.8
$
$
$
$
$
$
$
$
162.8
162.8
162.8
719.2
5.7
5.6
730.5
142.1
1.3
1.5
144.9
875.4
Total
$ 4,428.5
$ 5,942.3
$ 3,587.6
$ 1,888.0
$ 1,038.2
$ 4,129.8
18.0
$ 4,147.8
125.2
125.2
125.2
$ 2,330.8
$ 2,330.8
$ 6,478.6
64.1
.9
.1
65.1
8.6
.4
9.0
74.1
$ 9,588.4
93.4
92.8
$ 9,774.6
$ 1,260.9
9.0
5.1
$ 1,275.0
$11,049.6
199.3
$17,528.2
$
$
$
$
$
$
$
$
$
161.8
161.8
161.8
226.7
1.3
1.2
229.2
52.8
.3
.2
53.3
282.5
444.3
$
$
$
$
$
$
$
$
$
64
At December 31, 2023
Gross charge-offs:
Dealer:
Wholesale
Total dealer
revolving
loans
$
$
.2
.2
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
2 0 2 3
2 0 2 2
2 0 2 1
2 0 2 0
2 0 1 9
pri o r
t ota l
Customer retail:
Fleet
Owner/operator
Total customer retail
Total
$
.2
$
$
$
1.0
.5
1.5
1.5
$
$
$
9.4
1.1
10.5
10.5
$
$
$
5.1
1.5
6.6
6.6
$
$
$
4.2
.5
4.7
4.7
$
$
$
4.2
4.2
4.2
$
$
$
.6
.3
.9
.9
$
$
$
$
$
.2
.2
24.5
3.9
28.4
28.6
revolving
loans
$ 2,766.0
6.1
$ 2,772.1
$
206.2
206.2
$
$ 2,978.3
At December 31, 2022
Amortized Cost:
Dealer:
Wholesale:
Performing
Watch
Retail:
Performing
At-risk
Total dealer
Customer retail:
Fleet:
Performing
Watch
At-risk
Owner/operator:
Performing
Watch
At-risk
Total customer retail
2 0 2 2
2 0 2 1
2 0 2 0
2 0 1 9
2 0 1 8
pri o r
t ota l
$
$
$
609.7
609.7
609.7
$
$
$
348.6
348.6
348.6
$
$
$
223.1
223.1
223.1
$ 3,558.0
7.5
6.7
$ 3,572.2
$
478.2
1.8
.4
$
480.4
$ 4,052.6
$ 1,981.9
7.3
17.7
$ 2,006.9
$ 1,306.5
1.8
18.8
$ 1,327.1
$
425.9
.9
.8
$
427.6
$ 2,434.5
$
251.2
.4
1.1
$
252.7
$ 1,579.8
$ 2,766.0
6.1
$ 2,772.1
121.1
.7
121.8
121.8
$ 1,871.2
.7
$ 1,871.9
$ 4,644.0
65.6
.5
.5
66.6
6.0
.1
6.1
72.7
$ 7,719.1
22.9
66.8
$ 7,808.8
$ 1,327.5
3.5
3.8
$ 1,334.8
$ 9,143.6
194.5
$13,787.6
$
$
$
$
$
$
$
$
$
241.7
241.7
241.7
603.7
3.4
17.2
624.3
120.9
.3
.8
122.0
746.3
988.0
$
$
$
$
$
$
$
$
$
120.8
120.8
120.8
203.4
2.4
5.9
211.7
45.3
.7
46.0
257.7
378.5
$
$
$
$
$
$
$
$
$
Total
$ 2,978.3
$ 4,662.3
$ 2,783.1
$ 1,802.9
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
The tables below summarize the Company’s finance receivables by aging category. In determining past due status,
the Company considers the entire contractual account balance past due when any installment is over 30 days past
due. Substantially all customer accounts that were greater than 30 days past due prior to credit modification became
current upon modification for aging purposes.
65
At December 31, 2023
Current and up to 30 days past due
31 – 60 days past due
Greater than 60 days past due
At December 31, 2022
Current and up to 30 days past due
31 – 60 days past due
Greater than 60 days past due
dealer
customer retail
wholesale
retail
owner/
fleet operator
$ 4,131.7
15.0
1.1
$ 4,147.8
$ 2,330.8
$ 2,330.8
$ 9,656.4
61.0
57.2
$ 9,774.6
$ 1,262.4
8.5
4.1
$ 1,275.0
total
$17,381.3
84.5
62.4
$17,528.2
dealer
customer retail
wholesale
retail
$ 2,772.1
$ 1,871.9
$ 2,772.1
$ 1,871.9
owner/
fleet operator
$ 7,768.5
14.7
25.6
$ 7,808.8
$ 1,329.1
3.1
2.6
$ 1,334.8
total
$ 13,741.6
17.8
28.2
$ 13,787.6
The amortized cost basis of finance receivables that are on non-accrual status was as follows:
dealer
customer retail
At December 31, 2023
wholesale
retail
Amortized cost basis with a specific reserve
Amortized cost basis with no specific reserve
Total
dealer
At December 31, 2022
wholesale
retail
Amortized cost basis with a specific reserve
Amortized cost basis with no specific reserve
Total
$
$
.7
.7
owner/
fleet operator
69.8
22.8
92.6
$
$
4.3
.8
5.1
customer retail
owner/
fleet operator
33.9
16.2
50.1
$
$
3.6
3.6
$
$
$
$
$
$
$
$
total
74.1
23.6
97.7
total
37.5
16.9
54.4
Interest income recognized on a cash basis for finance receivables that are on non-accrual status was as follows:
Year Ended December 31,
Dealer:
Retail
Customer retail:
Fleet
Owner/operator
2023
2022
2021
$
$
.1
$
2.5
.2
2.8
$
.2
3.1
.5
3.8
$
$
2.2
.4
2.6
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
66
Customers Experiencing Financial Difficulty: The Company adopted ASU 2022-02 on January 1, 2023. The amortized
cost basis of finance receivables modified for fleet customers experiencing financial difficulty was $7.5 for the year
ended December 31, 2023. The amortized cost basis of finance receivables modified for owner/operator customers
experiencing financial difficulty was nil for the year ended December 31, 2023. Total modifications with customers
experiencing financial difficulty represented less than .1% of the total retail portfolio for the year ended December
31, 2023. The modifications provided term extensions and granted customers additional time to pay, primarily in
Brasil. The financial effects of the term extensions added a weighted-average of 19 months to the life of the
modified contracts for the year ended December 31, 2023. The effect on the allowance for credit losses from such
modifications was not significant for the year ended December 31, 2023.
All of the finance receivables modified with customers experiencing financial difficulty are current. There were no
finance receivables modified with customers experiencing financial difficulty on or after January 1, 2023 that had a
payment default in the year ended December 31, 2023.
Troubled Debt Restructuring Disclosures Prior to Adoption of ASU 2022-02: Prior to the adoption of ASU 2022-02,
when considering whether to modify customer accounts for credit reasons, the Company evaluated the
creditworthiness of the customers and modified those accounts that the Company considered likely to perform
under the modified terms. When the Company modified a loan or finance lease for credit reasons and granted a
concession, the modification was classified as a troubled debt restructuring (TDR). The Company did not typically
grant credit modifications for customers that did not meet minimum underwriting standards since the Company
normally repossesses the financed equipment in those circumstances. When such modifications did occur, they were
considered TDRs. The balance of TDRs was $31.1 at December 31, 2022. At modification date, the pre- and
post-modification amortized cost basis was $11.7 for fleet finance receivables during the period.
The effect on the allowance for credit losses from such modifications was not significant at December 31, 2022.
Repossessions: When the Company determines a customer is not likely to meet its contractual commitments, the
Company repossesses the vehicles which serve as collateral for the loans, finance leases and equipment under
operating leases. The Company records the vehicles as used truck inventory included in Financial Services Other
assets on the Consolidated Balance Sheets. The balance of repossessed inventory at December 31, 2023 and 2022
was $30.4 and $9.2, respectively. Proceeds from the sales of repossessed assets were $27.7, $20.8 and $45.3 for the
years ended December 31, 2023, 2022 and 2021, respectively. These amounts are included in Proceeds from asset
disposals in the Consolidated Statements of Cash Flows. Write-downs of repossessed equipment on operating leases
are recorded as impairments and included in Financial Services Depreciation and other expenses on the
Consolidated Statements of Income.
F.
EQUIPMENT ON OPERATING LEASES
A summary of equipment on operating leases for Truck, Parts and Other and for the Financial Services segment is
presented below:
At December 31,
Equipment on operating leases
Less allowance for depreciation
truck, parts and other
financial services
2023
177.4
(49.8)
127.6
$
$
2022
251.7
(60.9)
190.8
$
$
2023
$ 3,365.3
(1,189.9)
$ 2,175.4
2022
$ 3,974.8
(1,362.3)
$ 2,612.5
Annual minimum lease payments due on Financial Services operating leases beginning January 1, 2024 are $522.6,
$332.9, $199.6, $99.2, $39.1 and $7.4 thereafter.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
When the equipment is sold subject to an RVG, the full sales price is received from the customer. A liability is
established for the residual value obligation with the remainder of the proceeds recorded as deferred lease revenue.
These amounts are summarized below:
67
At December 31,
Residual value guarantees
Deferred lease revenues
truck, parts and other
2023
119.7
22.9
142.6
$
$
2022
162.3
46.9
209.2
$
$
Annual maturities of the RVGs beginning January 1, 2024 are $87.0, $25.6, $5.3, $1.7 and $.1 thereafter. The
deferred lease revenue is amortized on a straight-line basis over the RVG contract period. At December 31, 2023,
the annual amortization of deferred revenues beginning January 1, 2024 are $16.7, $4.6, $1.2 and $.4 thereafter.
G . P R O P E RT Y, P L A N T A N D E Q U I P M E N T
Property, plant and equipment included the following:
At December 31,
Land
Buildings and improvements
Machinery, equipment and production tooling
Construction in progress
Less allowance for depreciation
useful lives
10 - 40 years
3 - 20 years
$
2023
325.7
1,703.8
5,337.7
676.3
8,043.5
(4,263.4)
$ 3,780.1
$
2022
269.9
1,608.6
5,086.6
424.1
7,389.2
(3,920.8)
$ 3,468.4
H . A C C O U N T S PAYA B L E , A C C R U E D E X P E N S E S A N D O T H E R
Accounts payable, accrued expenses and other include the following:
At December 31,
Truck, Parts and Other:
Accounts payable
Product support liabilities
Accrued expenses
Right-of-return liabilities
Accrued capital expenditures
Salaries and wages
Other
2023
2022
$ 1,667.6
867.8
936.5
365.8
225.1
401.5
612.0
$ 5,076.3
$ 1,665.1
542.9
808.4
366.4
221.2
351.8
555.9
$ 4,511.7
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
68
I .
P R O D U C T S U P P O RT L I A B I L I T I E S
Changes in product support liabilities are summarized as follows:
warranty reserves
Balance at January 1
Cost accruals
Payments
Change in estimates for pre-existing warranties
Currency translation and other
Balance at December 31
deferred revenues on extended warranties and r&m contracts
Balance at January 1
Deferred revenues
Revenues recognized
Currency translation
Balance at December 31
2023
437.7
739.2
(632.4)
211.9
10.6
767.0
$
$
$
2023
904.9
812.4
(507.8)
19.6
$ 1,229.1
2022
344.3
386.1
(398.7)
111.5
(5.5)
437.7
2022
775.2
629.1
(476.1)
(23.3)
904.9
$
$
$
$
2021
389.7
298.2
(396.3)
58.3
(5.6)
344.3
2021
795.8
487.1
(487.8)
(19.9)
775.2
$
$
$
$
The Company expects to recognize approximately $359.5 of the remaining deferred revenues on extended
warranties and R&M contracts in 2024, $336.6 in 2025, $269.4 in 2026, $159.3 in 2027, $81.1 in 2028 and $23.2
thereafter.
Product support liabilities are included in the accompanying Consolidated Balance Sheets as follows:
At December 31,
Truck, Parts and Other:
Accounts payable, accrued expenses and other
Other liabilities
Financial Services:
Accounts payable, accrued expenses and other
Deferred taxes and other liabilities
warranty reserves
deferred revenues
2023
2022
2023
$
513.6
253.4
$
279.2
158.5
$
767.0
$
437.7
$
354.2
861.4
5.3
8.2
$ 1,229.1
2022
263.7
628.8
4.9
7.5
904.9
$
$
J .
B O R R O W I N G S A N D C R E D I T A R R A N G E M E N T S
Financial Services borrowings include the following:
At December 31,
Commercial paper
Bank loans
Term notes
2023
effective
rate
5.2%
8.6%
3.4%
4.3%
borrowings
$ 5,068.9
541.0
5,609.9
8,624.6
$ 14,234.5
2022
effective
rate
3.7%
6.7%
2.2%
2.7%
borrowings
$ 3,265.5
339.4
3,604.9
7,866.7
$ 11,471.6
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
Commercial paper and term notes borrowings were $13,693.5 and $11,132.2 at December 31, 2023 and 2022,
respectively. Unamortized debt issuance costs, unamortized discounts and the net effect of fair value hedges were
$(54.1) and $(55.8) at December 31, 2023 and 2022, respectively. The effective rate is the weighted average rate as of
December 31, 2023 and 2022 and includes the effects of interest-rate contracts.
69
The annual maturities of the Financial Services borrowings are as follows:
Beginning January 1,
2024
2025
2026
2027
2028
commercial
paper
$ 5,084.1
$ 5,084.1
bank
loans
178.8
130.9
143.0
68.8
19.5
541.0
$
$
term
notes
$ 2,185.6
2,672.3
2,905.5
300.0
600.1
$ 8,663.5
total
$ 7,448.5
2,803.2
3,048.5
368.8
619.6
$ 14,288.6
Interest paid on borrowings was $396.5, $169.1 and $104.8 in 2023, 2022 and 2021, respectively.
The primary sources of borrowings in the capital markets are commercial paper and medium-term notes issued in
the public markets, and to a lesser extent, bank loans. The medium-term notes are issued by PACCAR Financial
Corp. (PFC), PACCAR Financial Europe (PFE), PACCAR Financial Mexico (PFM), PACCAR Financial Pty. Ltd.
(PFPL Australia) and PACCAR Financial Ltd. (PFL Canada).
In November 2021, the Company’s U.S. finance subsidiary, PFC, filed a shelf registration under the Securities Act of
1933. The total amount of medium-term notes outstanding for PFC as of December 31, 2023 was $6,100.0. In
January 2024, PFC issued $600.0 of medium-term notes under this registration. The registration expires in
November 2024 and does not limit the principal amount of debt securities that may be issued during that period.
As of December 31, 2023, the Company’s European finance subsidiary, PFE, had €911.7 available for issuance under
a €2,500.0 medium-term note program listed on the Euro MTF Market of the Luxembourg Stock Exchange. This
program renews annually and expires in September 2024.
In August 2021, PFM registered a 10,000.0 Mexican pesos medium-term note and commercial paper program with
the Comision Nacional Bancaria y de Valores. The registration expires in August 2026 and limits the amount of
commercial paper (up to one year) to 5,000.0 Mexican pesos. At December 31, 2023, 6,324.8 Mexican pesos were
available for issuance.
In August 2018, the Company’s Australian subsidiary, PFPL Australia, established a medium-term note program. The
program does not limit the principal amount of debt securities that may be issued under the program. The total
amount of medium-term notes outstanding for PFPL Australia as of December 31, 2023 was 850.0 Australian dollars.
In May 2021, the Company’s Canadian subsidiary, PFL Canada, established a medium-term note program. The
program does not limit the principal amount of debt securities that may be issued under the program. The total
amount of medium-term notes outstanding for PFL Canada as of December 31, 2023 was 150.0 Canadian dollars.
The Company’s Brazilian subsidiary, Banco PACCAR S.A., established a lending program in December 2021 with
the local development bank, Banco Nacional de Desenvolvimento Economico e Social (BNDES) for qualified
customers to receive preferential conditions and generally market interest rates. This program is limited to 1,148.0
Brazilian reais and has 775.5 Brazilian reais outstanding as of December 31, 2023.
The Company has line of credit arrangements of $4,198.8, of which $3,657.7 were unused at December 31, 2023.
Included in these arrangements are $3,000.0 of committed bank facilities, of which $1,000.0 expires in June 2024,
$1,000.0 expires in June 2026 and $1,000.0 expires in June 2028. The Company intends to replace these credit
facilities on or before expiration with facilities of similar amounts and duration. These credit facilities are
maintained primarily to provide backup liquidity for commercial paper borrowings and maturing medium-term
notes. There were no borrowings under the committed bank facilities for the year ended December 31, 2023.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
70
K.
LEASES
The Company leases certain facilities and equipment. The Company determines whether an arrangement is or
contains a lease at inception. The Company accounts for lease and non-lease components separately. The
consideration in the contract is allocated to each separate lease and non-lease component of the contract generally
based on the relative stand-alone price of the components. The lease component is accounted for in accordance
with the lease standard and the non-lease component is accounted for in accordance with other standards. The
Company uses its incremental borrowing rate in determining the present value of lease payments unless the rate
implicit in the lease is available. The lease term may include options to extend or terminate the lease if it is
reasonably certain that the Company will exercise that option. Leases that have a term of 12 months or less at the
commencement date (“short-term leases”) are not included in the right-of-use assets and the lease liabilities. Lease
expense for the short-term leases are recognized on a straight-line basis over the lease term.
The components of lease expense were as follows:
Year Ended December 31,
Finance lease cost
Amortization of right-of-use assets and interest
Operating lease cost
Short-term lease cost
Variable lease cost
Total lease cost
Balance sheet information related to leases was as follows:
At December 31,
TRUCK, PARTS AND OTHER:
Other noncurrent assets
FINANCIAL SERVICES:
Other assets
Total right-of-use assets
TRUCK, PARTS AND OTHER:
Accounts payable, accrued expenses and other
Other liabilities
FINANCIAL SERVICES:
Accounts payable, accrued expenses and other
Deferred taxes and other liabilities
Total lease liabilities
2023
operating
leases
$
$
$
$
64.9
6.0
70.9
14.2
51.6
1.8
3.9
71.5
$
$
$
$
$
2023
1.1
17.5
3.7
2.4
24.7
2022
.9
15.5
2.4
1.2
20.0
$
$
2022
finance
leases
operating
leases
2.5
2.5
.8
1.6
$
2.4
$
$
$
$
36.9
6.0
42.9
11.3
25.8
1.4
4.4
42.9
2021
.6
16.3
3.0
1.5
21.4
finance
leases
2.7
2.7
.8
1.8
$
$
$
$
$
$
2.6
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
The weighted-average remaining lease term and discount rate were as follows at December 31:
71
2023
2022
operating
leases
5.7 years
finance
leases
3.1 years
operating
leases
4.8 years
finance
leases
3.8 years
4.0%
2.3%
1.6%
1.7%
Weighted-average remaining lease term
Weighted-average discount rate
Maturities of lease liabilities are as follows:
Beginning January 1,
2024
2025
2026
2027
2028
Thereafter
Total lease payments
Less: interest
Total lease liabilities
operating
leases
finance
leases
$
$
$
17.8
16.1
13.7
10.4
7.8
14.6
80.4
(8.9)
71.5
2022
15.9
1.0
17.0
2.9
$
$
$
1.0
.7
.6
.1
.1
2.5
(.1)
2.4
2021
16.7
.6
8.1
.4
Cash flow information related to leases was as follows:
Year Ended December 31,
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
Financing cash flows from finance leases
$
Right-of-use assets obtained in exchange for lease liabilities
Operating leases
Finance leases
2023
17.0
1.1
39.5
1.3
L . C O M M I T M E N T S A N D C O N T I N G E N C I E S
At December 31, 2023, PACCAR had standby letters of credit and surety bonds totaling $33.0, from third-party
financial institutions, in the normal course of business, which guarantee various insurance, financing and other
activities. At December 31, 2023, PACCAR’s financial services companies, in the normal course of business, had
outstanding commitments to fund new loan and lease transactions amounting to $940.7. The commitments
generally expire in 90 days. The Company had other commitments, primarily to purchase production inventory,
equipment and commodities amounting to $196.9, $108.8, $76.8, $74.7, $65.0 and $115.7 for 2024, 2025, 2026, 2027,
2028 and beyond, respectively.
The Company is involved in various stages of investigations and cleanup actions in different countries related to
environmental matters. In certain of these matters, the Company has been designated as a “potentially responsible
party” by domestic and foreign environmental agencies. The Company has accrued the estimated costs to investigate
and complete cleanup actions where it is probable that the Company will incur such costs in the future.
Expenditures related to environmental activities for the years ended December 31, 2023, 2022 and 2021 were $3.0,
$4.6 and $4.0, respectively.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
72
While the timing and amount of the ultimate costs associated with future environmental cleanup cannot be
determined, management expects that these matters will not have a significant effect on the Company’s consolidated
financial position.
On July 19, 2016, the European Commission (EC) concluded its investigation of all major European truck
manufacturers and reached a settlement with DAF Trucks N.V., DAF Trucks Deutschland GmbH and PACCAR Inc
(collectively “the Company”). Following the settlement, certain EC-related claims and lawsuits have been filed in
various jurisdictions primarily in Europe against all major European truck manufacturers including the Company
and certain subsidiaries. These claims and lawsuits include a number of collective proceedings, including a class
action in the United Kingdom and Israel, alleging EC-related claims and seeking monetary damages. In certain
jurisdictions, additional claimants may bring EC-related claims and lawsuits against the Company or its subsidiaries.
The legal proceedings are moving through the court systems. In 2023, several European courts issued judgments;
some have been favorable while others have been unfavorable and are being appealed. The Company believes it has
meritorious defenses to the legal claims. In early 2023, the Company began settling with selected claimants. Based
on these settlements and judgments, the Company recorded in the first quarter 2023, a non-recurring pre-tax
charge of $600.0 million ($446.4 million after-tax) for the estimable total cost. The estimate may be adjusted as the
legal process continues, which could have a material impact on the Company’s financial results.
PACCAR is also a defendant in various other legal proceedings and, in addition, there are various other contingent
liabilities arising in the normal course of business. After consultation with legal counsel, management does not
anticipate that disposition of these various other proceedings and contingent liabilities will have a material effect on
the consolidated financial statements.
M . E M P L O Y E E B E N E F I T S
Severance Costs: The Company incurred severance expense in 2023, 2022 and 2021 of $.6, $.6 and $2.6, respectively.
Defined Benefit Pension Plans: The Company has several defined benefit pension plans, which cover a majority of its
employees. The Company evaluates its actuarial assumptions on an annual basis and considers changes based upon
market conditions and other factors.
The expected return on plan assets is determined by using a market-related value of assets, which is calculated
based on an average of the previous five years of asset gains and losses.
Generally, accumulated unrecognized actuarial gains and losses are amortized using the 10% corridor approach. The
corridor is defined as the greater of either 10% of the projected benefit obligation or the market-related value of
plan assets. The amortization amount is the excess beyond the corridor divided by the average remaining estimated
service life of participants on a straight-line basis.
The Company funds its pensions in accordance with applicable employee benefit and tax laws. The Company
contributed $27.3 to its pension plans in 2023 and $39.1 in 2022. The Company expects to contribute in the range
of $25 to $75 to its pension plans in 2024, of which $23.3 is estimated to satisfy minimum funding requirements.
Annual benefits expected to be paid beginning January 1, 2024 are $135.6, $130.0, $134.9, $136.4, $147.3 and a total
of $854.3 for the five years thereafter.
Plan assets are invested in global equity and debt securities through professional investment managers with the
objective to achieve targeted risk adjusted returns and maintain liquidity sufficient to fund current benefit
payments. Typically, each defined benefit plan has an investment policy that includes a target for asset mix,
including maximum and minimum ranges for allocation percentages by investment category. The actual allocation
of assets may vary at times based upon rebalancing policies and other factors. The Company periodically assesses
the target asset mix by evaluating external sources of information regarding the long-term historical return,
volatilities and expected future returns for each investment category. In addition, the long-term rates of return
assumptions for pension accounting are reviewed annually to ensure they are appropriate. Target asset mix and
forecast long-term returns by asset category are considered in determining the assumed long-term rates of return,
although historical returns realized are given some consideration.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
The fair value of mutual funds, common stocks and U.S. treasuries is determined using the market approach and is
based on the quoted prices in active markets. These securities are categorized as Level 1. The fair value of debt
securities is determined using the market approach and is based on the quoted market prices of the securities or
other observable inputs. These securities are categorized as Level 2.
73
The fair value of commingled and pooled trust funds is determined using the market approach and is based on the
unadjusted net asset value (NAV) per unit as determined by the sponsor of the fund based on the fair values of
underlying investments. These assets are collective investment trusts and pooled funds, and substantially all of these
investments have no redemption restrictions or unfunded commitments. Securities measured at NAV per unit as a
practical expedient are not classified in the fair value hierarchy.
The following information details the allocation of plan assets by investment type. See Note Q for definitions of fair
value levels.
At December 31, 2023
Equities:
U.S. equities
Global equities
Total equities
Fixed income:
U.S. fixed income
Non-U.S. fixed income
Total fixed income
Cash and other
Total plan assets
At December 31, 2022
Equities:
U.S. equities
Global equities
Total equities
Fixed income:
U.S. fixed income
Non-U.S. fixed income
Total fixed income
Cash and other
Total plan assets
fair value hierarchy
target
level 1
level 2
total
45 - 65%
measured
at nav
total
$ 1,004.4
771.8
$ 1,776.2
$ 1,004.4
771.8
$ 1,776.2
$
95.7
35 - 55% $
$
95.7
.4
96.1
$
$
$
275.4
39.3
314.7
99.4
414.1
$
$
$
371.1
39.3
410.4
99.8
510.2
$
676.9
530.2
$ 1,207.1
.6
$ 2,983.9
$ 1,048.0
569.5
$ 1,617.5
100.4
$ 3,494.1
fair value hierarchy
target
level 1
level 2
total
45 - 65%
measured
at nav
total
$
830.9
795.9
$ 1,626.8
$
830.9
795.9
$ 1,626.8
$
82.2
35 - 55% $
$
82.2
5.8
88.0
$
$
$
258.0
31.4
289.4
86.1
375.5
$
$
$
340.2
31.4
371.6
91.9
463.5
$
605.2
419.4
$ 1,024.6
.3
$ 2,651.7
$
945.4
450.8
$ 1,396.2
92.2
$ 3,115.2
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
74
The following weighted-average assumptions relate to all pension plans of the Company:
At December 31,
Discount rate
Rate of increase in future compensation levels
Assumed long-term rate of return on plan assets
2023
4.8%
3.9%
6.6%
2022
5.0%
3.9%
6.0%
The components of the change in projected benefit obligation and change in plan assets are as follows:
At December 31,
Change in projected benefit obligation:
Benefit obligation at January 1
Service cost
Interest cost
Benefits paid
Actuarial loss (gain)
Currency translation and other
Participant contributions
Projected benefit obligation at December 31
Change in plan assets:
Fair value of plan assets at January 1
Employer contributions
Actual gain (loss) on plan assets
Benefits paid
Currency translation and other
Participant contributions
Fair value of plan assets at December 31
Funded status at December 31
At December 31,
Amounts recorded on Balance Sheets:
Other noncurrent assets
Accounts payable, accrued expenses and other
Other liabilities
Accumulated other comprehensive loss:
Actuarial loss
Prior service cost
2023
2022
$ 2,567.0 $ 3,709.6
148.5
84.9
(107.7)
(1,190.4)
(78.3)
.4
$ 2,903.3 $ 2,567.0
94.0
127.5
(110.1)
186.5
37.8
.6
27.3
412.5
(110.1)
48.6
.6
$ 3,115.2 $ 4,094.5
39.1
(809.6)
(107.7)
(101.5)
.4
$ 3,494.1 $ 3,115.2
548.2
$
590.8 $
2023
2022
$
734.8 $
23.8
120.2
98.0
12.3
671.2
18.0
105.0
97.9
13.0
Of the December 31, 2023 amounts in accumulated other comprehensive loss, $4.9 of unrecognized actuarial loss
and $1.4 of unrecognized prior service cost are expected to be amortized into net pension expense in 2024.
The accumulated benefit obligation for all pension plans of the Company was $2,494.4 and $2,265.1 at December
31, 2023 and 2022, respectively.
Information for all plans with an accumulated benefit obligation in excess of plan assets is as follows:
At December 31,
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
$
2023
138.7 $
124.1
7.1
2022
126.7
113.7
6.8
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
The components of pension expense are as follows:
75
Year Ended December 31,
Service cost
Interest on projected benefit obligation
Expected return on assets
Amortization of prior service costs
Recognized actuarial loss
Net pension (gain) expense
2023
94.0 $
127.5
(230.3)
1.4
4.7
(2.7) $
2022
148.5 $
84.9
(215.1)
.7
28.9
47.9 $
2021
148.4
65.3
(203.3)
.8
58.7
69.9
$
$
The components of net pension expense other than service cost are included in Interest and other expenses
(income), net on the Consolidated Statements of Income.
Multi-employer Plans: The Company participates in multi-employer plans in the U.S. and Europe. These are typically
under collective bargaining agreements and cover its union-represented employees. The Company’s participation in
the following multi-employer plans for the years ended December 31 are as follows:
pension plan
Metal and Electrical Engineering
Industry Pension Fund
Western Metal Industry Pension Plan
Other plans
pension
plan
number
ein
surcharge
2023
2022
2021
company contributions
91-6033499
135668
001
Yes
Yes
$
$
46.1 $
4.5
1.2
51.8 $
37.1 $
4.0
1.0
42.1 $
38.1
4.0
1.1
43.2
The Company contributions shown in the table above approximate the multi-employer pension expense for each of
the years ended December 31, 2023, 2022 and 2021, respectively.
Metal and Electrical Engineering Industry Pension Fund is a multi-employer union plan incorporating all DAF
employees in the Netherlands and is covered by a collective bargaining agreement that will expire on May 31, 2024.
The Company’s contributions were less than 5% of the total contributions to the plan for the last three reporting
periods ending December 2023. The plan is required by law (the Netherlands Pension Act) to have a minimum
coverage ratio in excess of 104.3% and a policy coverage ratio in excess of 113.3% (weighted coverage ratio of the
last 12 months). Because the policy coverage ratio of 109.4% at December 31, 2023 is below the required threshold,
a funding improvement plan remains in place. Based on the funding improvement plan, the required coverage of
113.3% should be reached by the end of 2032. The funding improvement plan includes a possible reduction in
pension benefits and delays in future benefit increases.
The Western Metal Industry Pension Plan is located in the U.S. and is covered by a collective bargaining agreement
that will expire on November 2, 2025. In accordance with the U.S. Pension Protection Act of 2006, the plan
continued to be certified as critical (red) for the 2023 plan year and a rehabilitation plan has been implemented
requiring additional contributions as long as the plan remains in critical status. Contributions by the Company were
27% and 25% of the total contributions to the plan for the years ended December 31, 2023 and 2022, respectively.
Other plans are principally located in the U.S. and the Company’s contributions to these plans for the years ended
December 31, 2023 and 2022 were less than 5% of each plan’s total contributions. As of December 31, 2023, one of
the other plans was under a funding rehabilitation plan requiring an increase to the mandated employer surcharge
from 5% to 10%, which will be applicable for each succeeding year in which the plan remains in a critical status.
There were no significant changes for the multi-employer plans in the periods presented that affected comparability
between periods.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
76
Defined Contribution Plans: The Company maintains several defined contribution benefit plans whereby it
contributes designated amounts on behalf of participant employees. The largest plan is for U.S. salaried employees
where the Company matches a percentage of employee contributions up to an annual limit. The match was 5% of
eligible pay in 2023, 2022 and 2021. Other plans are located in Australia, the Netherlands, Canada, United Kingdom
and Germany. Expenses for these plans were $65.4, $56.3 and $50.0 in 2023, 2022 and 2021, respectively.
N .
I N C O M E TA X E S
The Company’s tax rate is based on income and statutory tax rates in the various jurisdictions in which the
Company operates. Tax law requires certain items to be included in the Company’s tax returns at different times
than the items reflected in the Company’s financial statements. As a result, the Company’s annual tax rate reflected
in its financial statements is different than that reported in its tax returns. Some of these differences are permanent,
such as expenses that are not deductible in the Company’s tax return, and some differences reverse over time, such
as depreciation expense. These temporary differences create deferred tax assets and liabilities. The Company
establishes valuation allowances for its deferred tax assets if, based on the available evidence, it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
The components of the Company’s income before income taxes include the following:
Year Ended December 31,
Domestic
Foreign
2023
$ 3,913.7
1,804.5
$ 5,718.2
2022
$ 2,322.9
1,525.8
$ 3,848.7
2021
$ 1,391.4
1,004.9
$ 2,396.3
The components of the Company’s provision for income taxes include the following:
Year Ended December 31,
Current provision:
Federal
State
Foreign
Deferred (benefit) provision:
Federal
State
Foreign
2023
2022
2021
$
845.5
179.8
395.8
1,421.1
(141.5)
(24.4)
(137.8)
(303.7)
$ 1,117.4
$
$
567.0
143.1
335.0
1,045.1
(173.2)
(42.0)
7.2
(208.0)
837.1
$
$
410.0
85.9
243.5
739.4
(176.0)
(29.6)
(3.0)
(208.6)
530.8
Tax benefits recognized for net operating loss carryforwards were $118.2, $3.9 and $5.1 for the years ended 2023,
2022 and 2021, respectively.
A reconciliation of the statutory U.S. federal tax rate to the effective income tax rate is as follows:
Statutory rate
Effect of:
State
Research and development tax credit
Tax on foreign earnings
Brasil valuation allowance release
Other, net
2023
21.0%
2.3
(.8)
.1
(2.1)
(1.0)
19.5%
2022
21.0%
2.1
(1.0)
.5
(.8)
21.8%
2021
21.0%
2.0
(1.2)
1.1
(.7)
22.2%
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
Based on the Company’s current operations, the Company does not expect that the repatriation of future foreign
earnings will be subject to significant income tax as a result of the U.S. modified territorial system.
77
At December 31, 2023, the Company had net operating loss carryforwards of $460.8, of which $400.0 related to
foreign subsidiaries and $60.8 related to states in the U.S. The related deferred tax asset was $135.8, for which a $2.3
valuation allowance has been provided. The carryforward periods range from four years to indefinite, subject to
certain limitations under applicable laws. The future tax benefits of net operating loss carryforwards are evaluated
on a regular basis, including a review of historical and projected operating results.
The tax effects of temporary differences representing deferred tax assets and liabilities are as follows:
2023
2022
At December 31,
Assets:
Accrued liabilities
R&D expense capitalization
Net operating loss and tax credit carryforwards
Inventory adjustments
Allowance for losses on receivables
Other
Valuation allowance
Liabilities:
Financial Services leasing depreciation
Depreciation and amortization
Postretirement benefit plans
Other
Net deferred tax liability
The balance sheet classifications of the Company’s deferred tax assets and liabilities are as follows:
At December 31,
Truck, Parts and Other:
Other noncurrent assets, net
Other liabilities
Financial Services:
Other assets
Deferred taxes and other liabilities
Net deferred tax liability
2023
502.6
(78.8)
88.3
(543.9)
(31.8)
$
$
Cash paid for income taxes was $1,499.3, $932.1 and $761.1 in 2023, 2022 and 2021, respectively.
Balance at January 1
Additions for tax positions related to the current year
Additions for tax positions related to prior years
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
2022
26.0
7.4
1.8
(1.6)
(5.8)
27.8
Reductions for tax positions related to prior years
Lapse of statute of limitations
2023
27.8
7.7
2.6
(1.6)
(5.3)
31.2
Balance at December 31
$
$
$
$
$
$
314.3
257.1
144.8
64.6
53.2
132.2
966.2
(2.3)
963.9
(572.6)
(219.7)
(144.5)
(58.9)
(995.7)
(31.8)
$
$
$
$
$
$
252.2
153.6
128.0
59.5
43.8
95.6
732.7
(116.2)
616.5
(558.9)
(227.3)
(120.5)
(59.2)
(965.9)
(349.4)
2022
199.0
(75.5)
51.0
(523.9)
(349.4)
2021
24.5
6.1
.8
(5.4)
26.0
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
78
The Company had $31.2, $27.8 and $26.0 of unrecognized tax benefits, of which $31.2, $27.8 and $25.3 would
impact the effective tax rate, if recognized, as of December 31, 2023, 2022 and 2021, respectively.
The Company recognized $.8, $.1 and $(.4) of expense (income) related to interest in 2023, 2022 and 2021,
respectively. Accrued interest expense and penalties were $1.7, $.9 and $.8 as of December 31, 2023, 2022 and 2021,
respectively. Interest and penalties are classified as income taxes in the Consolidated Statements of Income.
The Company believes it is reasonably possible that approximately $6.2 of unrecognized tax benefits, resulting
primarily from research and development tax credits, will be resolved within the next 12 months. As of December
31, 2023, the United States Internal Revenue Service has completed examinations of the Company’s tax returns for
all years through 2016. The Company’s tax returns for other major jurisdictions remain subject to examination for
the years ranging from 2012 through 2023.
O . S T O C K H O L D E R S ’ E Q U I T Y
Accumulated Other Comprehensive Income (Loss): The components of AOCI and the changes in AOCI, net of tax,
included in the Consolidated Balance Sheets and the Consolidated Statements of Stockholders’ Equity, consisted of
the following:
Balance at January 1, 2023
Recorded into AOCI
Reclassified out of AOCI
Net other comprehensive
(loss) income
Balance at December 31, 2023
Balance at January 1, 2022
Recorded into AOCI
Reclassified out of AOCI
Net other comprehensive
income (loss)
Balance at December 31, 2022
derivative
contracts
marketable
debt
securities
pension
plans
foreign
currency
translation
$
$
35.1
(137.9)
91.8
(46.1)
(11.0)
$
$
(43.6)
32.4
(2.7)
29.7
(13.9)
derivative
contracts
marketable
debt
securities
$
$
(13.5)
8.6
40.0
48.6
35.1
$
$
(1.1)
(41.3)
(1.2)
(42.5)
(43.6)
$
$
$
$
(110.9)
(4.0)
4.6
.6
(110.3)
$
$
(834.0)
275.3
275.3
(558.7)
pension
plans
foreign
currency
translation
(269.8)
136.4
22.5
158.9
(110.9)
$
$
(636.7)
(197.3)
(197.3)
(834.0)
total
(953.4)
165.8
93.7
259.5
(693.9)
total
(921.1)
(93.6)
61.3
(32.3)
(953.4)
$
$
$
$
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
79
total
$ (1,050.3)
109.6
19.6
derivative
contracts
marketable
debt
securities
pension
plans
foreign
currency
translation
Balance at January 1, 2021
Recorded into AOCI
Reclassified out of AOCI
Net other comprehensive
income (loss)
Balance at December 31, 2021
$
$
(29.2)
39.9
(24.2)
15.7
(13.5)
$
$
14.6
(14.1)
(1.6)
(15.7)
(1.1)
$
$
(578.1)
262.9
45.4
308.3
(269.8)
$
$
(457.6)
(179.1)
(179.1)
(636.7)
129.2
(921.1)
$
Reclassifications out of AOCI during the years ended December 31, 2023, 2022 and 2021 were as follows:
aoci components
Unrealized losses (gains) on derivative contracts:
Truck, Parts and Other
line item in the consolidated statements
of income
Foreign-exchange contracts
Commodity contracts
Financial Services
Foreign-exchange contracts
Interest-rate contracts
Net sales and revenues
Cost of sales and revenues
Interest and other expenses (income), net
Cost of sales and revenues
$
Interest and other borrowing expenses
Interest and other borrowing expenses
Pre-tax expense increase (reduction)
Tax (benefit) expense
After-tax expense increase (reduction)
Unrealized gains on marketable debt securities:
Marketable debt securities
Investment income
Tax expense
After-tax income increase
Unrealized losses on pension plans:
Truck, Parts and Other
Actuarial loss
Prior service costs
Interest and other expenses (income), net
Interest and other expenses (income), net
Pre-tax expense increase
Tax benefit
After-tax expense increase
Total reclassifications out of AOCI
$
amount reclassified out of aoci
2023
2022
2021
31.9
2.2
(.9)
4.2
(2.1)
76.5
111.8
(20.0)
91.8
(3.6)
.9
(2.7)
4.7
1.4
6.1
(1.5)
4.6
93.7
$
$
19.3
(15.3)
(1.4)
32.0
7.3
6.1
48.0
(8.0)
40.0
(1.6)
.4
(1.2)
28.9
.7
29.6
(7.1)
22.5
61.3
$
$
16.6
(1.0)
(.1)
.6
(49.8)
(33.7)
9.5
(24.2)
(2.1)
.5
(1.6)
58.7
.8
59.5
(14.1)
45.4
19.6
Other Capital Stock Changes: The Company purchased and retired nil treasury shares in 2023, 2022, and 2021.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
80
P.
D E R I VAT I V E F I N A N C I A L I N S T R U M E N T S
As part of its risk management strategy, the Company enters into derivative contracts to hedge against the risks of
interest rates, foreign currency rates and commodity prices.
Interest-Rate Contracts: The Company enters into various interest-rate contracts, including interest-rate swaps and
cross currency interest-rate swaps. Interest-rate swaps involve the exchange of fixed for floating rate or floating for
fixed rate interest payments based on the contractual notional amounts in a single currency. Cross currency
interest-rate swaps involve the exchange of notional amounts and interest payments in different currencies. The
Company is exposed to interest-rate and exchange-rate risk caused by market volatility as a result of its borrowing
activities. The objective of these contracts is to mitigate the fluctuations on earnings, cash flows and fair value of
borrowings. Net amounts paid or received are reflected as adjustments to interest expense.
At December 31, 2023, the notional amount of the Company’s interest-rate contracts was $2,733.7. Notional
maturities for all interest-rate contracts are $570.3 for 2024, $1,022.1 for 2025, $629.6 for 2026, $318.0 for 2027,
$136.7 for 2028 and $57.0 thereafter.
Foreign-Exchange Contracts: The Company enters into foreign-exchange contracts to hedge certain anticipated
transactions and assets and liabilities denominated in foreign currencies, particularly the Canadian dollar, the euro,
the British pound, the Australian dollar, the Brazilian real and the Mexican peso. The objective is to reduce
fluctuations in earnings and cash flows associated with changes in foreign currency exchange rates. The Company
enters into foreign-exchange contracts as net investment hedges to reduce the foreign currency exposure from its
investments in foreign subsidiaries. At December 31, 2023, the notional amount of the outstanding foreign-exchange
contracts was $1,968.0. Foreign-exchange contracts typically mature within one year.
Commodity Contracts: The Company enters into commodity forward contracts to hedge the prices of certain
commodities used in the production of trucks. The objective is to reduce the fluctuation in earnings and cash flows
associated with adverse movement in commodity prices. At December 31, 2023, the notional amount of the
outstanding commodity contracts was $37.3. Commodity contracts mature within one year.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
The following table presents the balance sheet classification, fair value, gross and pro forma net amounts of
derivative financial instruments:
81
At December 31,
Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets
Deferred taxes and other liabilities
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets
Accounts payable, accrued expenses and other
Financial Services:
Other current assets
Deferred taxes and other liabilities
Commodity contracts:
Truck, Parts and Other:
Other current assets
Accounts payable, accrued expenses and other
Derivatives not designated as hedging instruments:
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets
Accounts payable, accrued expenses and other
Financial Services:
Other assets
Deferred taxes and other liabilities
Commodity contracts:
Truck, Parts and Other:
Accounts payable, accrued expenses and other
Gross amounts recognized in Balance Sheets
Less amounts not offset in financial instruments:
Truck, Parts and Other:
Foreign-exchange contracts
Commodity contracts
Financial Services:
Foreign-exchange contracts
Interest-rate contracts
Pro forma net amount
2023
2022
assets liabilities
assets liabilities
$ 17.3
$ 58.0
$ 131.1
$ 82.6
1.5
1.2
$ 20.0
21.1
3.6
9.5
5.1
57.3
1.6
1.5
.8
$ 156.6
$ 118.4
.6
$ 97.8
$
1.0
$
1.0
$
3.4
$
.1
.1
$
1.0
$ 21.0
$
3.5
$ 160.1
$
1.0
$ 119.4
$ (1.6)
(.7)
$ (1.6)
(.7)
(11.9)
6.8
$
(11.9)
$ 145.9
$
(.1)
(.5)
(1.8)
(21.5)
$ 95.5
.1
.2
$
.4
$ 98.2
$
(.1)
(.5)
(1.8)
(21.5)
$ 74.3
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
82
The following table presents the amount of loss (gain) from derivative financial instruments recorded in the
Consolidated Statements of Comprehensive Income:
Year Ended December 31,
2023
2022
2021
interest-
rate
foreign-
exchange
interest-
rate
foreign-
exchange
interest-
rate
foreign-
exchange
Truck, Parts and Other:
Net sales and revenues
Cash flow hedges
Cost of sales and revenues
Cash flow hedges
Derivatives not designated as
hedging instruments
Interest and other expenses (income), net
Cash flow hedges
Net investment hedges
Derivatives not designated as
hedging instruments
Financial Services:
Interest and other borrowing expenses
Cash flow hedges
Fair value hedges
Derivatives not designated as
hedging instruments
Total
$
$
$
$
$
$
$
76.5
9.8
86.3
86.3
$
31.9
$
19.3
$
16.6
2.2
(5.1)
12.8
(8.7)
8.8
41.9
1.8
$
1.7
3.5
45.4
$
$
6.1
1.0
7.1
7.1
(15.3)
(1.7)
(1.4)
(5.8)
.8
(4.1)
(1.0)
8.9
(.1)
(3.2)
1.9
23.1
$
7.3
$
(49.8)
.4
(8.1)
(.8) $
(4.9) $
$
(49.4) $
(49.4) $
(.5)
(.5)
22.6
$
$
$
$
The loss from commodity contracts recorded in Cost of sales and revenue was $4.2, $31.8 and $.6 for the years
ended 2023, 2022 and 2021, respectively.
Fair Value Hedges
Changes in the fair value of derivatives designated as fair value hedges are recorded in earnings together with the
changes in fair value of the hedged item attributable to the risk being hedged. The following table presents the
amounts recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:
At December 31,
Financial Services
Term notes:
Carrying amount of hedged liabilities
Cumulative basis adjustment included in the carrying amount
2023
2022
$ 128.1 $
7.1
319.8
27.7
The above table excludes the cumulative basis adjustments on discontinued hedge relationships of $12.2 and $7.1 as
of December 31, 2023 and 2022, respectively.
Cash Flow Hedges
Substantially all of the Company’s interest-rate contracts and some foreign-exchange contracts have been designated
as cash flow hedges. Changes in the fair value of derivatives designated as cash flow hedges are recorded in AOCI.
Amounts in AOCI are reclassified into net income in the same period in which the hedged transaction affects
earnings. The Company elected to exclude the forward premium component (excluded component) on some
foreign-exchange cash flow hedges and amortize the excluded component over the life of the derivative instruments.
The amortization of the excluded component is recognized in Interest and other expenses (income), net in Truck,
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
Parts and Other segment and Interest and other borrowing expenses in Financial Services segment in the
Consolidated Statements of Comprehensive Income. The maximum length of time over which the Company is
hedging its exposure to the variability in future cash flows is 8.9 years.
83
The following table presents the pre-tax effects of (loss) gain on cash flow hedges recognized in other
comprehensive income (loss) (OCI):
Year Ended December 31,
2023
2022
2021
(Loss) gain recognized in OCI:
Truck, Parts and Other
Financial Services
interest-
rate
foreign-
exchange
interest-
rate
foreign-
exchange
interest-
rate
foreign-
exchange
$
$
(110.5)
(110.5)
$
$
(65.7)
1.8
(63.9)
$
$
$
$
41.2
(25.5)
15.7
19.1
19.1
$
$
83.2
83.2
$
$
(18.5)
(1.9)
(20.4)
The pre-tax effects of loss on commodity hedges recognized in other comprehensive income (loss) (OCI) for Truck,
Parts and Other was $.5, $17.1 and $8.6 in 2023, 2022 and 2021, respectively.
The amount of loss in AOCI at December 31, 2023 that is estimated to be reclassified into earnings in the following
12 months if interest rates and exchange rates remain unchanged is approximately $5.0, net of taxes. The fixed
interest earned on finance receivables will offset the amount recognized in interest expense, resulting in a stable
interest margin consistent with the Company’s risk management strategy.
The amount of (losses) gains reclassified out of AOCI into net income based on the probability that the original
forecasted transactions would not occur was nil for the year ended December 31, 2023, $1.0 for the year ended
December 31, 2022 and $.1 for year ended December 31, 2021.
Net Investment Hedges
Changes in the fair value of derivatives designated as net investment hedges are recorded in AOCI as an adjustment
to the Cumulative Translation Adjustment (CTA). The notional amount of the outstanding net investment hedges
was $443.6, $347.0 and $360.7 at December 31, 2023, 2022 and 2021, respectively. The pre-tax (loss) gain
recognized in OCI for the net investment hedges was $(8.2), $28.8 and $26.6 at December 31, 2023, 2022 and 2021,
respectively.
Q . FA I R VA L U E M E A S U R E M E N T S
Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Inputs to valuation techniques used to measure fair value are either
observable or unobservable. These inputs have been categorized into the fair value hierarchy described below.
Level 1 – Valuations are based on quoted prices that the Company has the ability to obtain in actively traded
markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly
available in an active market or exchange traded market, valuation of these instruments does not require a
significant degree of judgment.
Level 2 – Valuations are based on quoted prices for similar instruments in active markets, quoted prices for
identical or similar instruments in markets that are not active and model-based valuation techniques for which all
significant assumptions are observable in the market.
Level 3 – Valuations are based on model-based techniques for which some or all of the assumptions are obtained
from indirect market information that is significant to the overall fair value measurement and which require a
significant degree of management judgment.
The Company uses the following methods and assumptions to measure fair value for assets and liabilities subject to
recurring fair value measurements.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
84
Marketable Debt Securities: The Company’s marketable debt securities consist of municipal bonds, government
obligations, investment-grade corporate obligations, commercial paper, asset-backed securities and term deposits.
The fair value of U.S. government obligations is determined using the market approach and is based on quoted
prices in active markets and are categorized as Level 1.
The fair value of non-U.S. government bonds, municipal bonds, corporate bonds, asset-backed securities,
commercial paper and term deposits is determined using the market approach and is primarily based on matrix
pricing as a practical expedient which does not rely exclusively on quoted prices for a specific security. Significant
inputs used to determine fair value include interest rates, yield curves, credit rating of the security and other
observable market information and are categorized as Level 2.
Marketable Equity Securities: The Company’s equity securities are traded on active exchanges and are classified as Level 1.
Derivative Financial Instruments: The Company’s derivative contracts consist of interest-rate swaps, cross currency
swaps, foreign currency exchange and commodity contracts. These derivative contracts are traded over the counter
and their fair value is determined using industry standard valuation models, which are based on the income
approach (i.e., discounted cash flows). The significant observable inputs into the valuation models include interest
rates, yield curves, currency exchange rates, credit default swap spreads, forward rates and commodity prices and
are categorized as Level 2.
Assets and Liabilities Subject to Recurring Fair Value Measurement
The Company’s assets and liabilities subject to recurring fair value measurements are either Level 1 or Level 2 as follows:
At December 31, 2023
Assets:
Marketable debt securities
U.S. tax-exempt securities
U.S. taxable municipal / non-U.S. provincial bonds
U.S. corporate securities
U.S. government securities
Non-U.S. corporate securities
Non-U.S. government securities
Other debt securities
Total marketable debt securities
Marketable equity securities
Total marketable securities
Derivatives
Cross currency swaps
Interest-rate swaps
Foreign-exchange contracts
Commodity contracts
Total derivative assets
Liabilities:
Derivatives
Cross currency swaps
Interest-rate swaps
Foreign-exchange contracts
Commodity contracts
Total derivative liabilities
level 1
level 2
total
$
158.1
$
$
$
158.1
4.4
162.5
$
310.7
240.1
353.3
524.2
141.2
90.6
$ 1,660.1
$ 1,660.1
$
$
$
$
13.2
4.1
2.5
1.2
21.0
116.6
14.5
28.2
.8
160.1
$
310.7
240.1
353.3
158.1
524.2
141.2
90.6
$ 1,818.2
4.4
$
$ 1,822.6
$
$
$
$
13.2
4.1
2.5
1.2
21.0
116.6
14.5
28.2
.8
160.1
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
At December 31, 2022
Assets:
Marketable debt securities
U.S. tax-exempt securities
U.S. taxable municipal / non-U.S. provincial bonds
U.S. corporate securities
U.S. government securities
Non-U.S. corporate securities
Non-U.S. government securities
Other debt securities
Total marketable debt securities
Marketable equity securities
Total marketable securities
Derivatives
Cross currency swaps
Interest-rate swaps
Foreign-exchange contracts
Commodity contracts
Total derivative assets
Liabilities:
Derivatives
Cross currency swaps
Interest-rate swaps
Foreign-exchange contracts
Commodity contracts
Total derivative liabilities
level 1
level 2
total
85
$
115.0
$
$
$
115.0
1.2
116.2
$
445.1
180.8
251.0
450.0
76.4
94.7
$ 1,498.0
$ 1,498.0
$
$
$
$
49.1
8.9
59.9
1.5
119.4
52.0
30.6
14.8
.8
98.2
$
445.1
180.8
251.0
115.0
450.0
76.4
94.7
$ 1,613.0
$
1.2
$ 1,614.2
$
$
$
$
49.1
8.9
59.9
1.5
119.4
52.0
30.6
14.8
.8
98.2
Fair Value Disclosure of Other Financial Instruments
For financial instruments that are not recognized at fair value, the Company uses the following methods and
assumptions to determine the fair value. These instruments are categorized as Level 2, except cash which is
categorized as Level 1 and fixed rate loans which are categorized as Level 3.
Cash and Cash Equivalents: Carrying amounts approximate fair value.
Financial Services Net Receivables: For floating-rate loans, floating-rate wholesale financing, and operating lease and
other trade receivables, carrying values approximate fair values. For fixed rate loans, fair values are estimated using
the income approach by discounting cash flows to their present value based on assumptions regarding the credit
and market risks to approximate current rates for comparable loans. Finance lease receivables and related allowance
for credit losses have been excluded from the accompanying table.
Debt: The carrying amounts of Financial Services commercial paper, variable rate bank loans and variable rate term
notes approximate fair value. For fixed rate debt, fair values are estimated using the income approach by discounting
cash flows to their present value based on current rates for comparable debt.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions, except per share data)
86
The Company’s estimate of fair value for fixed rate loans and debt that are not carried at fair value was as follows:
At December 31,
2023
2022
carrying
amount
fair
value
carrying
amount
fair
value
Assets:
Financial Services fixed rate loans
$ 8,126.8
$ 8,214.4
$ 6,859.1
$ 6,582.0
Liabilities:
Financial Services fixed rate debt
8,720.3
8,693.7
8,070.5
7,715.9
R .
S T O C K C O M P E N S AT I O N P L A N S
PACCAR has certain plans under which officers and key employees may be granted options to purchase shares of
the Company’s authorized but unissued common stock under plans approved by stockholders. Non-employee
directors and certain officers may be granted restricted shares of the Company’s common stock under plans
approved by stockholders. Options outstanding under these plans were granted with exercise prices equal to the fair
market value of the Company’s common stock at the date of grant. Options expire no later than ten years from the
grant date and generally vest after three years. Restricted stock awards generally vest over three years or earlier upon
meeting certain age and service requirements.
The Company recognizes compensation cost on these options and restricted stock awards on a straight-line basis
over the requisite period the employee is required to render service less estimated forfeitures based on historical
experience. The plans contain antidilution provisions. Consequently, the following data has been restated to reflect
the Company’s 50% stock dividend in February 2023. The maximum number of shares of the Company’s common
stock authorized for issuance under these plans is 70.0 million shares, and as of December 31, 2023, the maximum
number of shares available for future grants was 15.0 million.
The assumptions used in determining the fair value of the option awards for each of the grant years are as follows:
Risk-free interest rate
Expected volatility
Expected dividend yield
Expected term
Weighted average grant date fair value of options per share
2023
3.84%
26%
4.5%
6 years
$ 13.17
2022
1.86%
26%
4.3%
6 years
$ 9.70
2021
.71%
26%
3.6%
6 years
$ 9.48
The estimated fair value of each option award is determined on the date of grant using the Black-Scholes-Merton
option pricing model that uses assumptions noted in the table above. The risk-free interest rate is based on the U.S.
Treasury yield curve in effect at the time of grant. Expected volatility is based on historical volatility. The dividend
yield is based on an estimated future dividend yield using projected net income for the next five years, implied
dividends and Company stock price. The expected term is based on the period of time that options granted are
expected to be outstanding based on historical experience.
The fair value of options granted was $11.9, $8.3 and $8.1 for the years ended December 31, 2023, 2022 and 2021,
respectively. The fair value of options vested was $6.8 during the year ended December 31, 2023, and was $5.6
during the years ended December 31, 2022 and 2021.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions, except per share data)
A summary of activity under the Company’s stock plans is presented below:
87
Intrinsic value of options exercised
Cash received from stock option exercises
Tax benefit related to stock award exercises
Stock-based compensation
Tax benefit related to stock-based compensation
$
2023
41.2
51.7
5.4
21.2
1.7
$
2022
17.8
35.8
2.6
17.1
1.7
$
2021
25.4
38.4
4.9
14.7
1.6
The summary of options as of December 31, 2023 and changes during the year then ended are presented below:
Options outstanding at January 1
Granted
Exercised
Cancelled
Options outstanding at December 31
Vested and expected to vest
Exercisable
* Weighted Average
number
of shares
4,205,200
898,100
(1,174,400)
(105,600)
3,823,300
3,678,800
1,498,400
per share
exercise
price*
remaining
contractual
life in years*
aggregate
intrinsic
value
$
$
$
$
51.10
72.00
44.08
66.09
57.77
57.34
45.45
6.64
6.55
4.25
$ 152.5
$ 148.3
$ 78.2
The fair value of restricted shares is determined based upon the stock price on the date of grant. The summary of
nonvested restricted shares as of December 31, 2023 and changes during the year then ended is presented below:
nonvested shares
Nonvested awards outstanding at January 1
Granted
Vested
Forfeited
Nonvested awards outstanding at December 31
* Weighted Average
number
of shares
grant date
fair value*
241,500
197,000
(168,700)
(8,000)
261,800
$ 59.69
71.27
63.06
60.25
$ 66.21
As of December 31, 2023, there was $8.7 of total unrecognized compensation cost related to nonvested stock
options, which is recognized over a remaining weighted average vesting period of 1.53 years. Unrecognized
compensation cost related to nonvested restricted stock awards of $1.9 is expected to be recognized over a
remaining weighted average vesting period of 1.12 years.
The dilutive and antidilutive options are shown separately in the table below:
Year Ended December 31,
Additional shares
Antidilutive options
2023
1,099,000
891,500
2022
769,100
1,653,600
2021
973,300
883,800
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
88
S .
S E G M E N T A N D R E L AT E D I N F O R M AT I O N
PACCAR operates in three principal segments: Truck, Parts and Financial Services. The Company evaluates the
performance of its Truck and Parts segments based on operating profits, which excludes investment income, other
income and expense, and income taxes. The Financial Services segment’s performance is evaluated based on income
before income taxes. Geographic revenues from external customers are presented based on the country of the
customer. The accounting policies of the reportable segments are the same as those applied in the consolidated
financial statements as described in Note A.
Truck and Parts: The Truck segment includes the design and manufacture of high-quality, light-, medium- and heavy-
duty commercial trucks and the Parts segment includes the distribution of aftermarket parts for trucks and related
commercial vehicles, both of which are sold through the same network of independent dealers. These segments derive
a large proportion of their revenues and operating profits from operations in North America and Europe. The Truck
segment incurs substantial costs to design, manufacture and sell trucks to its customers. The sale of new trucks
provides the Parts segment with the basis for parts sales that may continue over the life of the truck, but are generally
concentrated in the first five years after truck delivery. To reflect the benefit the Parts segment receives from costs
incurred by the Truck segment, certain expenses are allocated from the Truck segment to the Parts segment. The
expenses allocated are based on a percentage of the average annual expenses for factory overhead, engineering,
research and development and SG&A expenses for the preceding five years. The allocation is based on the ratio of the
average parts direct margin dollars (net sales less material and labor costs) to the total truck and parts direct margin
dollars for the previous five years. The Company believes such expenses have been allocated on a reasonable basis.
Truck segment assets related to the indirect expense allocation are not allocated to the Parts segment.
Financial Services: The Financial Services segment derives its earnings primarily from financing or leasing of PACCAR
products and services provided to truck customers and dealers. Revenues are primarily generated from operations in
North America and Europe.
In Europe, the marketing of used trucks, including those units sold by the Truck segment subject to an RVG, is
performed by the Financial Services segment. When a customer returns the truck at the end of the RVG contract, the
Company’s Truck segment records a reduction in an RVG liability and the Company’s Financial Services segment
records a used truck asset and revenue from the subsequent sale. Certain gains and losses from the sale of these used
trucks are shared with the Truck segment.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
Other: Included in Other is the Company’s industrial winch manufacturing business as well as sales, income and
expenses not attributable to a reportable segment. Other also includes non-service cost components of pension
expense and a portion of corporate expenses. Intercompany interest income (expense) on cash advances with the
financial services companies is included in Other and was $12.4, $(1.9) and $.4 for 2023, 2022 and 2021, respectively.
89
Geographic Area Data
Net sales and revenues:
United States
Europe
Other
Property, plant and equipment, net:
United States
The Netherlands
Belgium
Other
Equipment on operating leases, net:
United States
Mexico
Spain
Germany
France
Poland
The Netherlands
Other
2023
2022
2021
$ 18,841.6
8,741.4
7,544.4
$ 35,127.4
$ 1,950.9
654.0
550.4
624.8
$ 3,780.1
$
524.9
420.2
303.3
247.1
223.5
187.9
137.8
258.3
$ 2,303.0
$ 15,379.2
7,486.5
5,954.0
$ 28,819.7
$ 1,831.7
534.1
572.8
529.8
$ 3,468.4
$
846.9
314.5
316.3
280.9
260.7
245.8
185.9
352.3
$ 2,803.3
$ 12,388.8
6,325.4
4,808.1
$ 23,522.3
$ 1,718.5
516.1
620.5
543.0
$ 3,398.1
$ 1,003.0
285.7
291.8
307.1
299.7
337.9
157.8
505.9
$ 3,188.9
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
December 31, 2023, 2022 and 2021 (currencies in millions)
90
Business Segment Data
Net sales and revenues:
Truck
Less intersegment
External customers
Parts
Less intersegment
External customers
Other
Financial Services
Income (loss) before income taxes:
Truck
Parts
Other*
Financial Services
Investment income
Depreciation and amortization:
Truck
Parts
Other
Financial Services
Expenditures for long-lived assets:
Truck
Parts
Other
Financial Services
Segment assets:
Truck
Parts
Other
Cash and marketable securities
Financial Services
2023
2022
2021
$ 27,257.1
(410.7)
26,846.4
$ 22,005.5
(519.3)
21,486.2
$ 17,379.0
(579.3)
16,799.7
6,486.5
(72.1)
6,414.4
54.7
33,315.5
1,811.9
$ 35,127.4
$ 3,799.9
1,702.6
(616.8)
4,885.7
540.3
292.2
$ 5,718.2
$
$
403.5
15.0
25.3
443.8
480.1
923.9
$
584.8
65.7
33.2
683.7
582.2
$ 1,265.9
$ 8,038.5
1,912.1
1,249.6
8,659.3
19,859.5
20,963.9
$ 40,823.4
5,829.4
(65.1)
5,764.3
63.8
27,314.3
1,505.4
$ 28,819.7
$ 1,753.3
1,446.6
(1.1)
3,198.8
588.9
61.0
$ 3,848.7
$
$
324.9
14.0
23.9
362.8
427.4
790.2
$
466.0
21.1
28.6
515.7
854.8
$ 1,370.5
$ 7,218.1
1,742.1
976.8
6,158.9
16,095.9
17,179.6
$ 33,275.5
5,004.8
(60.5)
4,944.3
90.5
21,834.5
1,687.8
$ 23,522.3
$
804.9
1,110.0
28.3
1,943.2
437.6
15.5
$ 2,396.3
$
$
277.6
12.0
21.9
311.5
591.8
903.3
$
547.2
29.4
24.1
600.7
984.8
$ 1,585.5
$ 6,912.1
1,505.1
860.3
4,813.0
14,090.5
15,418.9
$ 29,509.4
*
In 2023, Other includes a $600.0 million non-recurring charge related to civil litigation in Europe (EC-related
claims) which is discussed in Note L.
M A N A G E M E N T ’ S R E P O R T O N I N T E R N A L C O N T R O L O V E R
F I N A N C I A L R E P O R T I N G
91
The management of PACCAR Inc (the Company) is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles.
Internal control over financial reporting may not prevent or detect misstatements because of its inherent
limitations. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies and
procedures may deteriorate.
Management assessed the Company’s internal control over financial reporting as of December 31, 2023, based
on criteria for effective internal control over financial reporting described in Internal Control–Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
Based on this assessment, management concluded that the Company maintained effective internal control over
financial reporting as of December 31, 2023.
Ernst & Young LLP, the Independent Registered Public Accounting Firm that audited the financial statements
included in this Annual Report, has issued an attestation report on the Company’s internal control over financial
reporting. The attestation report is included on page 93.
R. Preston Feight
Chief Executive Officer
R E P O R T O F I N D E P E N D E N T R E G I S T E R E D P U B L I C A C C O U N T I N G F I R M
To the Stockholders and the Board of Directors of PACCAR Inc
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of PACCAR Inc (the Company) as of December 31, 2023 and
2022, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of
the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated
financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) and our report dated February 21, 2024, expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of
the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.
R E P O R T O F I N D E P E N D E N T R E G I S T E R E D P U B L I C A C C O U N T I N G F I R M
92
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of the critical audit matter does not alter in any way our
opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to
which it relates.
Product Warranty
Description of
the Matter
The Company’s liability for product warranty totaled $767 million at December 31, 2023. As
discussed in Note A of the consolidated financial statements, the Company’s liability for product
warranty is estimated and recorded at the time products are sold based on historical and current
data and reasonable expectations for the future regarding the frequency and cost of warranty
claims, net of recoveries. The Company periodically assesses the adequacy of its recorded
liabilities and adjusts them as appropriate to reflect actual experience.
How We
Addressed
the Matter
in Our Audit
Auditing the Company’s liability for product warranty is complex due to the significant
measurement uncertainty associated with the estimate and the application of significant
management judgment, including the inputs used to estimate the number of and cost of future
warranty claims. In addition, management formulates an estimate of recoveries from suppliers.
We evaluated and tested the design and operating effectiveness of internal controls over the
warranty reserve process, including management’s assessment of the assumptions and data
underlying the reserve.
To evaluate the liability for product warranty, our audit procedures included, among others,
testing the completeness and accuracy of the underlying claims, supplier recovery data and
utilizing a subject matter expert in evaluating the methodologies and assumptions used in the
warranty accrual calculation. We also assessed the historical accuracy of management’s estimates
through a hindsight analysis.
We have served as the Company’s auditor since 1945
Seattle, Washington
February 21, 2024
R E P O R T O F I N D E P E N D E N T R E G I S T E R E D P U B L I C A C C O U N T I N G F I R M
To the Stockholders and the Board of Directors of PACCAR Inc
93
Opinion on Internal Control Over Financial Reporting
We have audited PACCAR Inc’s internal control over financial reporting as of December 31, 2023, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, PACCAR Inc (the Company)
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023,
based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the
related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of
the three years in the period ended December 31, 2023, and the related notes and our report dated February 21,
2024, expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on
the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Seattle, Washington
February 21, 2024
M A R K E T R I S K S A N D D E R I V A T I V E I N S T R U M E N T S
(currencies in millions)
94
Interest-Rate Risks - See Note P for a description of the Company’s hedging programs and exposure to interest rate
fluctuations. The Company measures its interest-rate risk by estimating the amount by which the fair value of interest-
rate sensitive assets and liabilities, including derivative financial instruments, would change assuming an immediate
100 basis point increase across the yield curve as shown in the following table:
Fair Value (Losses) Gains
C O N S O L I D AT E D :
Assets
Cash equivalents and marketable debt securities
F I N A N C I A L S E RV I C E S:
Assets
Fixed rate loans
Liabilities
Fixed rate term debt
Interest-rate swaps
Total
2023
2022
$
(29.2)
$
(26.7)
(146.5)
(117.4)
156.8
1.2
(17.7)
$
136.6
6.4
(1.1)
$
Currency Risks - The Company enters into foreign currency exchange contracts to hedge its exposure to exchange rate
fluctuations of foreign currencies, particularly the Canadian dollar, the euro, the British pound, the Australian dollar,
the Brazilian real and the Mexican peso (see Note P for additional information concerning these hedges). Based on the
Company’s sensitivity analysis, the potential loss in fair value for such financial instruments from a 10% unfavorable
change in quoted foreign currency exchange rates would be a loss of $259.7 related to contracts outstanding at
December 31, 2023, compared to a loss of $216.6 at December 31, 2022. These amounts would be largely offset by
changes in the values of the underlying hedged exposures.
Commodity Price Risks - The Company enters into commodity forward contracts to hedge the prices of certain
commodities used in the production of trucks (see Note P for additional information concerning these hedges). The
objective is to reduce the fluctuation in earnings and cash flows associated with adverse movement in commodity
prices. Based on the Company’s sensitivity analysis, the potential loss in fair value for such financial instruments from
a 10% unfavorable change in quoted commodity prices would be a loss of $3.3 related to contracts outstanding at
December 31, 2023, compared to a loss of $2.5 at December 31, 2022. These amounts would be largely offset by
changes in the values of the underlying hedged exposures.
O F F I C E R S A N D D I R E C T O R S
O F F I C E R S
Mark C. Pigott
Executive Chairman
R. Preston Feight
Chief Executive Officer
Harrie C.A.M. Schippers
President and Chief Financial Officer
C. Michael Dozier
Executive Vice President
Darrin C. Siver
Executive Vice President
Kevin D. Baney
Senior Vice President
John N. Rich
Senior Vice President and
Chief Technology Officer
Laura J. Bloch
Vice President
Paulo H. Bolgar
Vice President and
Chief Human Resources Officer
Brennan G. Gourdie
Vice President
Craig R. Gryniewicz
Vice President
Todd R. Hubbard
Vice President
A. Lily Ley
Vice President and
Chief Information Officer
Brice J. Poplawski
Vice President and Controller
Harald P. Seidel
Vice President
Raja Shembekar
Vice President
95
Daryl E. Simon
Vice President
Jason P. Skoog
Vice President
James W. Walenczak
Vice President
Michael K. Walton
Vice President and General Counsel
Harry M.B. Wolters
Vice President
Michael K. Kuester
Assistant Vice President
Ulrich Kammholz
Treasurer
Michael R. Beers
Corporate Secretary
D I R E C T O R S
Mark C. Pigott
Executive Chairman
PACCAR Inc (3)
R. Preston Feight
Chief Executive Officer
PACCAR Inc
Dame Alison J. Carnwath
Senior Adviser
Evercore Partners (1, 4)
Franklin L. Feder
Former Chief Executive Officer
Alcoa Latin America & Caribbean
of Alcoa Inc. (2)
Kirk S. Hachigian
Former Chairman and
Chief Executive Officer
JELD-WEN Holding, Inc. (2)
Barbara B. Hulit
Former Chief Executive Officer &
President, Advanced Healthcare
Solutions
Fortive Corporation (1)
Roderick C. McGeary
Former Vice Chairman
KPMG LLP (1, 4)
Cynthia A. Niekamp
Former Senior Vice President,
Automotive Coatings
PPG Industries, Inc. (2)
John M. Pigott
Partner
Beta Business Ventures LLC (3)
Ganesh Ramaswamy
Executive Vice President,
Industrial and Energy Technology
Baker Hughes Company (2)
Mark A. Schulz (Lead Director)
Former President,
International Operations
Ford Motor Company (3, 4)
Gregory M. E. Spierkel
Former Chief Executive Officer
Ingram Micro Inc. (1, 4)
C O M M I T T E E S O F T H E B O A R D
(1) Audit Committee
(2) Compensation Committee
(3) Executive Committee
(4) Nominating and Governance Committee
96
T R U C K S
Kenworth Truck Company
Division Headquarters:
10630 N.E. 38th Place
Kirkland, Washington 98033
Factories:
Chillicothe, Ohio
Renton, Washington
Peterbilt Motors Company
Division Headquarters:
1700 Woodbrook Street
Denton, Texas 76205
Factory:
Denton, Texas
PACCAR of Canada Ltd.
Markborough Place I
6711 Mississauga Road North
Mississauga, Ontario
L5N 4J8 Canada
Factory:
Ste.-Thérèse, Quebec, Canada
Canadian Kenworth
Company
Division Headquarters:
Markborough Place I
6711 Mississauga Road North
Mississauga, Ontario
L5N 4J8 Canada
Peterbilt of Canada
Division Headquarters:
Markborough Place I
6711 Mississauga Road North
Mississauga, Ontario
L5N 4J8 Canada
DAF Caminhões Brasil
Indústria Ltda.
Avenida Senador Flávio
Carvalho Guimarães, 6000
Bairro Boa Vista
CEP 84072-190
Ponta Grossa, Paraná, Brasil
Factory:
Ponta Grossa, Paraná, Brasil
DAF Trucks N.V.
Hugo van der Goeslaan 1
P.O. Box 90065
5600 PT Eindhoven
The Netherlands
Factories:
Eindhoven, The Netherlands
Westerlo, Belgium
D I V I S I O N S A N D S U B S I D I A R I E S
Leyland Trucks Ltd.
Croston Road
Leyland, Preston
Lancashire PR26 6LZ
United Kingdom
Factory:
Leyland, Lancashire,
United Kingdom
Kenworth Mexicana,
S.A. de C.V.
Calzada Gustavo Vildósola
Castro 2000
Mexicali, Baja California
Mexico
Factory:
Mexicali, Baja California
Mexico
PACCAR
Australia Pty. Ltd.
Division Headquarters:
64 Canterbury Road
Bayswater, Victoria 3153
Australia
Factory:
Bayswater, Victoria, Australia
T R U C K P A R T S
A N D S U P P L I E S
PACCAR Engine Company
1000 PACCAR Drive
Columbus, Mississippi 39701
Factory:
Columbus, Mississippi
PACCAR Parts
Division Headquarters:
750 Houser Way North
Renton, Washington 98057
Distribution Centers:
Atlanta, Georgia
Bayswater, Australia
Brisbane, Australia
Budapest, Hungary
Eindhoven, The Netherlands
Lancaster, Pennsylvania
Las Vegas, Nevada
Louisville, Kentucky
Leyland, United Kingdom
Madrid, Spain
Montreal, Canada
Oklahoma City, Oklahoma
Panama City, Panama
Ponta Grossa, Brasil
Renton, Washington
Rockford, Illinois
San Luis Potosí, Mexico
Toronto, Canada
PACCAR Financial
Europe B.V.
Hugo van der Goeslaan 1
P.O. Box 90065
5600 PT Eindhoven
The Netherlands
PACCAR Financial
México, S.A. de C.V.
Calzada Gustavo Vildósola
Castro 2000
Mexicali, Baja California
Mexico
PacLease Mexicana
S.A. de C.V.
Calzada Gustavo Vildósola
Castro 2000
Mexicali, Baja California
Mexico
PACCAR Financial
Services Ltd.
Markborough Place I
6711 Mississauga Road North
Mississauga, Ontario
L5N 4J8 Canada
PACCAR Financial
Pty. Ltd.
64 Canterbury Road
Bayswater, Victoria 3153
Australia
PACCAR Financial
PLC
Haddenham Business Park
Pegasus Way
Haddenham HP17 8LJ
United Kingdom
Banco PACCAR S.A.
Avenida Senador Flávio
Carvalho Guimarães, 6000
Bairro Boa Vista
CEP 84072-190
Ponta Grossa, Paraná, Brasil
P A C C A R G L O B A L S A L E S
Division Headquarters:
10630 N.E. 38th Place
Kirkland, Washington 98033
Office:
Shanghai, People’s Republic
of China
Dynacraft
Division Headquarters:
3490 Redbud Boulevard
McKinney, Texas 75069
Factories:
Louisville, Kentucky
McKinney, Texas
W I N C H E S
PACCAR Winch Inc
800 East Dallas Street
Broken Arrow, Oklahoma 74012
Factories:
Broken Arrow, Oklahoma
Okmulgee, Oklahoma
P R O D U C T T E S T I N G ,
R E S E A R C H A N D
D E V E L O P M E N T
PACCAR Technical Center
12479 Farm to Market Road
Mount Vernon, Washington
98273
DAF Trucks Test Center
Weverspad 2
5491 RL Sint-Oedenrode
The Netherlands
PACCAR Innovation Center
1277 Reamwood Avenue
Sunnyvale, California 94089
PACCAR India Technical
Center
5th Floor, Amar Tech Park
Balewadi, Baner Gaon Haveli
Pune, Maharashtra, 411045 India
PACCAR North Texas
2501 South State Highway 121
Lewisville, Texas 75076
P A C C A R F I N A N C I A L
S E R V I C E S G R O U P
PACCAR Financial Corp.
PACCAR Building
777 106th Avenue N.E.
Bellevue, Washington 98004
PACCAR Leasing Company
Division of PACCAR
Financial Corp.
PACCAR Building
777 106th Avenue N.E.
Bellevue, Washington 98004
S T O C K H O L D E R S ’
I N F O R M A T I O N
Corporate Offices
PACCAR Building
777 106th Avenue N.E.
Bellevue, Washington
98004
Mailing Address
P.O. Box 1518
Bellevue, Washington
98009
Telephone
425.468.7400
Facsimile
425.468.8216
Website
www.paccar.com
Stock Transfer
and Dividend
Dispersing Agent
EQ Shareowner Services
P.O. Box 64874
St. Paul, Minnesota
55164-0874
800.468.9716
www.shareowneronline.com
PACCAR’s transfer agent
maintains the company’s
shareholder records, issues
stock certificates and
distributes dividends and
IRS Forms 1099. Requests
concerning these matters
should be directed to EQ.
Online Delivery of
Annual Report and Proxy
Statement
PACCAR’s 2023 Annual
Report and the 2024 Proxy
Statement are available on
PACCAR’s website at
www.paccar.com/
2024annualmeeting
Stockholders who hold
PACCAR stock in street
name may inquire of their
bank or broker about the
availability of electronic
delivery of annual
meeting documents.
Trademarks Owned by
PACCAR Inc and its
Subsidiaries
Braden, Carco, DAF, DAF
Connect, Gearmatic,
Kenworth, Leyland,
PACCAR, PACCAR
Connect, PACCAR EX,
PACCAR MX-11, PACCAR
MX-13, PACCAR Parts
Fleet Services, PACCAR
PX, PACCAR Solutions,
PACCAR TX-8, PACCAR
TX-18, PacLease, Peterbilt,
PETERBILT ARTech,
TRP, TruckTech+, and
SmartLINQ.
Independent Auditors
Ernst & Young LLP
Seattle, Washington
SEC Form 10-K
PACCAR’s annual report
to the Securities and
Exchange Commission
will be furnished to
stockholders on request
to the Corporate
Secretary, PACCAR Inc,
P.O. Box 1518, Bellevue,
Washington 98009. It is
also available online at
investors.paccar.com/
financials/sec-filings
or on the SEC’s website
at www.sec.gov.
Annual Stockholders’
Meeting
April 30, 2024, 10:30 a.m.
PACCAR Parts Distribution
Center
405 Houser Way North
Renton, Washington
98057
An Equal Opportunity
Employer
This report was printed
on recycled paper.