PACCAR Announces Fourth Quarter Revenues and Profits

  PACCAR Announces Fourth Quarter Revenues and Profits

                   Company Achieves Record Annual Revenues

Business Wire

BELLEVUE, Wash. -- January 31, 2013

“PACCAR (Nasdaq:PCAR) reported record revenues for 2012 and its 74th ^
consecutive year of net profit. PACCAR’s annual revenues of $17.05 billion
were the highest in company history and the $1.11 billion of net income was
the fourth best in our history,” said Mark Pigott, chairman and chief
executive officer. “PACCAR’s financial results reflect the company’s
premium-quality products and services, the benefits of increased geographic
diversification, excellent aftermarket parts business and record PACCAR
Financial Services performance. I am very proud of our 21,800 employees who
have delivered outstanding industry-leading products and services.”

New Peterbilt Model 579 and New Kenworth T680 (Photo: Business Wire)

New Peterbilt Model 579 and New Kenworth T680 (Photo: Business Wire)

“PACCAR’s strong balance sheet and operating cash flow of $1.52 billion in
2012 enabled the company to deliver many new products, enhance manufacturing
efficiency and expand globally,” said Ron Armstrong, president. “PACCAR
launched more new trucks in 2012 than in any other year. The Kenworth T680,
the Peterbilt Model 579 and the DAF XF Euro 6 are the result of a $1 billion,
multi-year program to design and develop the highest quality, most efficient
trucks in the industry,” added Armstrong. “We are pleased that DAF achieved
record share in the European above 16-tonne market and Kenworth and Peterbilt
achieved record share in the Class 8 market in North America.”

Revenues, Net Income and Dividends

PACCAR achieved record revenues of $17.05 billion in 2012 compared to revenues
of $16.36 billion in 2011. PACCAR reported net income of $1.11 billion in 2012
compared to $1.04 billion earned last year. PACCAR’s 2012 earnings per diluted
share (EPS) of $3.12 increased by nine percent versus 2011 EPS of $2.86.
Fourth quarter net sales and financial service revenues were $3.99 billion
compared to $4.85 billion for the comparable period in 2011. PACCAR earned
$253.5 million ($.72 per diluted share) for the fourth quarter of 2012
compared to $327.7 million ($.91 per diluted share) in the fourth quarter of

PACCAR declared cash dividends of $1.58 per share during 2012, including a
fourth quarter special dividend of $.80 per share. Total dividends declared in
2012 increased by 22 percent compared to 2011. PACCAR has paid a dividend
every year since 1941. PACCAR’s total shareholder return was 25.1 percent
during 2012.

Business Highlights – 2012

  *PACCAR delivered 140,400 vehicles worldwide and introduced the Kenworth
    T680, Peterbilt Model 579 and DAF XF Euro 6.
  *PACCAR continued to expand its geographic footprint by beginning
    construction of a new DAF assembly plant in Brasil, generating record
    sales in Russia and delivering over 6,000 trucks to the Andean region of
    South America.
  *PACCAR invested $790.3 million in capital projects and research and
  *PACCAR was ranked 20th in InformationWeek magazine’s 2012 Top 500 company
  *The DAF CF85 earned the U.K.’s Motor Transport award for “Fleet Truck of
    the Year” for the eleventh time.
  *The Peterbilt Model 210 and Model 587 earned the American Truck Dealers
    Medium- and Heavy-Duty Commercial Truck of the Year awards.
  *Kenworth Trucks ranked highest in the J.D. Power Heavy Duty Dealer Service
    Customer Satisfaction Study^sm* for the second consecutive year.
  *Leyland Trucks was honored with the Manufacturing Leadership Award for
    Operational Excellence in the annual Manufacturing Excellence Awards.
  *PACCAR has implemented 19,300 Six Sigma projects since 1997.

Stock Repurchase Update

During 2012, PACCAR repurchased 4.19 million of its common shares for $162.1
million. Under the current Board of Directors resolution authorizing $300
million of stock repurchases, PACCAR has repurchased 4.99 million shares for
$192.0 million. “PACCAR’s excellent net profits and strong cash flow make the
company’s shares an attractive long-term investment. The stock repurchase
program reflects the Board’s confidence in PACCAR’s successful global business
growth,” said Bob Christensen, PACCAR chief financial officer and executive
vice president. PACCAR’s shareholder return averaged 16.2 percent per year in
the last ten years, compared to the S&P 500 Index average annual return of 7.1
percent for the same period.

Financial Highlights – Fourth Quarter 2012

  *Consolidated sales and revenues of $3.99 billion.
  *Net income of $253.5 million.
  *Cash generated by operations of $602.4 million.
  *Financial Services pretax income of $78.7 million.
  *Research and development expenses of $66.4 million.
  *Capital investments of $156.8 million.
  *Manufacturing cash and marketable securities of $2.4 billion at December
    31, 2012.

Financial Highlights – Full Year 2012

  *Record consolidated sales and revenues of $17.05 billion.
  *Net income of $1.11 billion.
  *Cash provided from operations of $1.52 billion.
  *Record Financial Services pretax income of $307.8 million on assets of
    $10.80 billion.
  *Capital investments of $511.0 million.
  *Research and development expenses of $279.3 million.
  *Medium-term note (MTN) issuances of $2.16 billion.
  *Dividend declarations and share repurchases of $722.0 million.
  *Record year-end shareholders’ equity of $5.85 billion at December 31,

Global Truck Market Update

“In 2012, DAF achieved a record European market share of 16.0 percent in the
above 16-tonne market, the highest share in its 84-year history. DAF is the
market leader in the European tractor segment as fleets recognize DAF’s
product quality leadership, low operating costs and excellent resale value,”
said Harrie Schippers, DAF president. “Industry sales above 16-tonnes in
Western and Central Europe were 222,000 units in 2012. It is estimated that
industry sales in the above 16-tonne truck market in Europe in 2013 will be in
a range of 210,000-250,000 units as some customers are expected to purchase
Euro 5 vehicles ahead of the introduction of the Euro 6 emission requirement
in 2014. Production of the new DAF XF with the new PACCAR MX-13 Euro 6 engine
will commence in spring 2013. The new products strengthen DAF’s position as
the leading provider of integrated transport solutions,” added Schippers.

“Class 8 industry retail sales in the U.S. and Canada improved to 225,000
units in 2012 compared to 197,000 in 2011,” said Dan Sobic, PACCAR executive
vice president. “Our customers are benefiting from good freight tonnage and
freight rates. In 2012, PACCAR achieved a record Class 8 retail market share
in the U.S. and Canada of 28.9 percent as customers benefited from Kenworth
and Peterbilt vehicles’ low operating cost. Estimates for U.S. and Canada
truck industry Class 8 retail sales in 2013 are in the range of
210,000-240,000 units, driven by ongoing replacement of the aging fleet and
the overall growth in the economy,” added Sobic.

South American Expansion

PACCAR continued construction of its new 300,000-square-foot DAF assembly
facility in Ponta Grossa, Brasil. “Brasil is a major truck market with
industry sales above six tonnes expected to increase in 2013 to over 140,000
units. The DAF product range offers premium quality, low operating costs,
excellent driveability and maneuverability, and the industry-leading PACCAR MX
engine,” said Marco Davila, DAF Brasil president. “The production of DAF
trucks in Brasil in late 2013 is an exciting development which will add to
PACCAR’s sales in South America.”

PACCAR's Kenworth vehicles have earned a significant market share in many
South American countries in the Andean region for over 40 years. “PACCAR
delivered over 6,000 trucks in the Andean region of South America in 2012,”
said Sam Means, PACCAR vice president.

Russia Expansion

“DAF and Kenworth delivered 2,700 trucks to Russian customers in 2012, an
increase of 80 percent versus 2011,” said Ron Bonsen, DAF director of sales.
“PACCAR Parts established a Parts Distribution Center (PDC) in Moscow in late
2011 which supports our growing dealer network of 29 sales and service

PACCAR in Asia

PACCAR’s Shanghai office concentrates on component purchases for production
and aftermarket operations. “China is the largest truck market in the world
and PACCAR is benefiting from its increased presence in the region,” said Dan
Sobic, PACCAR executive vice president. “DAF is the third largest truck
manufacturer in the above 16-tonne segment in Taiwan with a 10.4 percent
market share. During 2012, DAF began its LF vehicle assembly joint venture in

PACCAR Parts Achieves Strong Performance

“PACCAR’s aftermarket parts business achieved excellent revenue in 2012,” said
Bob Christensen, chief financial officer and PACCAR executive vice president.
“The ongoing growth in PACCAR’s aftermarket part sales has been driven by
investment in parts processes and distribution, technology and products,
including the emergence of our global TRP brand. The company will begin
reporting the Parts division as a separate segment in PACCAR’s 2012 annual
report,” added Christensen.

“Improving truck utilization and an aging North American truck fleet are
helping to generate excellent parts and service business. PACCAR utilizes 15
strategically located parts distribution centers supported by over 1,900 DAF,
Kenworth and Peterbilt dealer locations to deliver industry-leading customer
service,” said Darrin Siver, PACCAR Parts general manager and PACCAR vice
president. “A new 280,000-square-foot distribution center in Eindhoven, the
Netherlands, is due to open in April 2013 to enhance support to DAF customers
and dealers in Europe.”

PACCAR Engines

In December 2012, PACCAR received certification from the U.S. Environmental
Protection Agency (EPA) for its range of proprietary engines for 2013. The
California Air Resources Board (CARB) also certified PACCAR engines for the
2013 on-board diagnostics (OBD) requirement. “PACCAR has installed over 30,000
MX engines in Kenworth and Peterbilt trucks in North America since the start
of production in 2010. The PACCAR MX-13 engines include a new high pressure
common rail fuel injection system, enhanced on-board diagnostics and an
expanded rating of 500 hp,” said Craig Brewster, PACCAR vice president.

Increased Capital Investments

In 2012, capital investments of $511.0 million and research and development
expenses of $279.3 million were invested in global expansion initiatives, to
enhance manufacturing efficiency, and accelerate new PACCAR product
development. PACCAR’s capital investments in 2013 are focused on the
completion of the DAF factory in Brasil. “Capital investments are projected to
be $400-$500 million and research and development expenses are estimated at
$225-$275 million in 2013,” said George West, PACCAR vice president.
“Kenworth, Peterbilt and DAF are designing new products and services to enable
our customers to continue to improve profitability of their businesses.”

Environmental Leadership

PACCAR continues to be a leader in the market for natural gas powered
vehicles. Kenworth and Peterbilt have been manufacturing trucks powered by
liquefied natural gas (LNG) and compressed natural gas (CNG) since 1996.
PACCAR produced over 1,400 natural gas powered vehicles in 2012, earning a 40
percent share of the U.S. heavy-duty truck natural gas market. Kenworth and
Peterbilt trucks provide a wide range of vehicle solutions for over-the-road,
regional and vocational applications and are currently available with either
9-liter or 15-liter natural gas engines. “PACCAR’s natural gas engine
platforms offer an efficient and clean technology that benefits customers in a
wide range of applications,” commented Craig Brewster, PACCAR vice president.

Financial Services Companies Achieve Excellent Results

PACCAR Financial Services (PFS) finances a portfolio of 154,000 trucks and
trailers, with total assets of $10.80 billion. PacLease, a major full-service
truck leasing company in North America and Europe with a fleet of 34,000
vehicles, is included in this segment. “During the fourth quarter and
full-year 2012, profit increased due to growth in portfolio balances,” said
Bob Bengston, PACCAR vice president. Fourth quarter pretax income was $78.7
million compared to the $67.4 million earned in the fourth quarter of 2011.
Fourth quarter revenues were $297.8 million compared to $266.2 million in the
same quarter of 2011. For the full year, revenues were $1.10 billion compared
to $1.03 billion in 2011 and pretax income was $307.8 million in 2012 compared
to $236.4 million a year ago.

“PACCAR’s excellent balance sheet, complemented by its A+/A1 credit ratings,
enables PFS to offer competitive retail financing to Kenworth, Peterbilt and
DAF dealers and customers in 23 countries on four continents,” said Todd
Hubbard, PACCAR Financial Corp. president. “A growing asset base and excellent
portfolio performance are generating improved earnings.”

PACCAR Financial Services had excellent access to the debt markets in 2012,
issuing $2.16 billion in two-, three- and five-year term notes during the
year. “Strong investor demand for PACCAR’s debt securities is a result of
PACCAR’s consistent profitability, excellent cash flow and strong balance
sheet,” said Robin Easton, PACCAR treasurer. “PFS borrows at competitive rates
which gives our customers an advantage in the marketplace.”

PACCAR is a global technology leader in the design, manufacture and customer
support of high-quality light-, medium- and heavy-duty trucks under the
Kenworth, Peterbilt and DAF nameplates. PACCAR also designs and manufactures
advanced diesel engines and provides financial services and information
technology and distributes truck parts related to its principal business.
PACCAR shares are traded on the Nasdaq Global Select Market, symbol PCAR. Its
homepage is

PACCAR will hold a conference call with securities analysts to discuss fourth
quarter earnings on January 31, 2013, at 9:00 a.m. Pacific time. Interested
parties may listen to the call by selecting “Live Webcast” at PACCAR’s
homepage. The Webcast will be available on a recorded basis through February
10, 2013.

This release contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act. These statements are based on
management’s current expectations and are subject to uncertainty and changes
in circumstances. Actual results may differ materially from those included in
these statements due to a variety of factors. More information about these
factors is contained in PACCAR’s filings with the Securities and Exchange

* J.D. Power and Associates 2012 Heavy-Duty Truck Customer Satisfaction
Study^sm. For more information please go to

(in millions except per share amounts)
                     Three Months Ended            Twelve Months Ended
                 December 31                 December 31
                 2012          2011        2012           2011
Truck, Parts
and Other:
Net sales and        $ 3,699.2       $ 4,587.6     $ 15,951.7       $ 15,325.9
Cost of sales
and revenues           3,247.4         3,994.4       13,908.3         13,341.8
Research and           66.4            72.3          279.3            288.2
general and            114.2           121.3         476.4            452.9
Interest and
other (income)     (.1     )    3.6        (.3      )    10.7
expense, net
Truck, Parts
and Other              271.3           396.0         1,288.0          1,232.3
Income Before
Income Taxes
Revenues               297.8           266.2         1,098.8          1,029.3
Interest and           189.9           167.4         675.8            657.5
general and            24.4            22.2          95.2             94.0
Provision for
losses on          4.8         9.2        20.0         41.4
Services               78.7            67.4          307.8            236.4
Income Before
Income Taxes
Investment         8.2         9.3        33.1         38.2
Total Income
Before Income          358.2           472.7         1,628.9          1,506.9
Income taxes       104.7       145.0      517.3        464.6
Net Income        $ 253.5      $ 327.7     $ 1,111.6     $ 1,042.3
Net Income Per
Basic             $ .72        $ .91       $ 3.13        $ 2.87
Diluted           $ .72        $ .91       $ 3.12        $ 2.86
Average Shares
Basic              353.6       358.3      355.1        363.3
Diluted            354.3       359.1      355.8        364.4
declared per      $ 1.00       $ .88       $ 1.58        $ 1.30
(a) The fourth quarter 2012 includes the benefit of a $12.7 million reduction
in cost of sales related to the capitalization of new product tooling that had
been expensed in the first nine months of 2012. The positive effect on net
income for the fourth quarter was $9.0 million ($0.03 per share).

(in millions)
                                                   December 31     December 31
                                         2012          2011
Truck and Other:
Cash and
marketable debt                                    $  2,395.9      $  2,900.7
Trade and other                                       902.1           977.8
receivables, net
Inventories                                           782.4           710.4
Property, plant
and equipment,                                        2,312.9         1,973.3
Equipment on
operating lease                                       1,439.0         1,209.1
and other
Financial                                   10,795.5     9,401.4
Services Assets
                                         $  18,627.8   $  17,172.7
Truck and Other:
deferred                                           $  3,651.3      $  3,846.7
revenues and
Long-term debt                                        150.0           150.0
Services                                              8,979.6         7,811.6
STOCKHOLDERS'                               5,846.9      5,364.4
                                         $  18,627.8   $  17,172.7
Common Shares                               353.4        356.8

                       Three Months Ended          Twelve Months Ended
                   December 31               December 31
                   2012        2011        2012          2011
United States          $ 2,179.2     $ 2,773.6     $  9,739.7      $  8,792.9
and Canada
Europe                   1,121.1       1,347.5        4,282.3         5,104.0
Other                696.7      732.7       3,028.5      2,458.3
                   $ 3,997.0   $ 4,853.8   $  17,050.5   $  16,355.2

(in millions)
Twelve Months Ended December 31               2012           2011
Net income                                       $ 1,111.6        $ 1,042.3
Depreciation and amortization:
Property, plant and equipment                      188.8            196.5
Equipment on operating leases and other            512.1            477.3
Net increase in wholesale receivables on           (6.5     )       (551.1   )
new trucks
Net increase in sales-type finance leases          (186.6   )       (141.3   )
and dealer direct loans on new trucks
All other operating activities                 (100.4   )    568.9    
Net Cash Provided by Operating Activities          1,519.0          1,592.6
Acquisition of property, plant and                 (515.4   )       (340.7   )
Acquisition of equipment for operating             (1,288.0 )       (1,306.6 )
Net increase in financial services                 (836.9   )       (629.0   )
Net increase in marketable securities              (280.6   )       (471.8   )
All other investing activities                 332.9        329.1    
Net Cash Used in Investing Activities              (2,588.0 )       (2,419.0 )
Cash dividends paid                                (809.5   )       (217.4   )
Purchase of treasury stock                         (162.1   )       (337.6   )
Stock compensation transactions                    13.9             10.9
Net increase in debt                           1,167.2      1,490.2  
Net Cash Provided by Financing Activities          209.5            946.1
Effect of exchange rate changes on cash        25.2         (53.8    )
Net (Decrease) Increase in Cash and Cash           (834.3   )       65.9
Cash and cash equivalents at beginning of      2,106.7      2,040.8  
Cash and cash equivalents at end of period    $ 1,272.4     $ 2,106.7  

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Robin Easton, 425-468-7676
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