Paccar Inc. · NASDAQ:PCAR
Paccar — Q4 2014 Earnings Presentation
37 slides from Paccar's earnings presentation, February 2015
Slide 1: Forward-looking statements disclaimer
This presentation may contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. A summary of risks and uncertainties is described in more detail in
Slide 2: Quality, Technology, Innovation
Quality Technology Innovation February 2015 Page 1
Slide 3: PACCAR brands and divisions
PACCAR ... EI KENWORTH DAF PACCARFINANCIAL PACCARPARTS | PACCAR MEXICO PACCARENGINs Am Do LEVLAND TRUCKS] (\|PACCAR Technology TECHNICAL CENTER Division PACCAR WINCH DIVISION ) Kenworth gyaAGRAFI BRADEN camco Gearmatic Australia —s nrcom courany February 2015 Page 2
Slide 4: >16T Truck Manufacturing 2013 Production
>16T Truck Manufacturing 2013 Production (Units 000s) Daimler Volvo Volkswagen Dongfeng FAW PACCAR Sinotruk Beijing Foton Shaanxi Tata Motors KamAZ Iveco Navistar Hino Jianghuai Ford Ashok Leyland Total >16T Production Hongyan Isuzu 2013 = 1.7 Million Hualing 0 50 100 150 200 250 February 2015 Page
Slide 5: PACCAR Revenues and Profit
PACCAR Revenues and Profit 76 consecutive years of net profit Dividends every year since 1941 ($ Millions) 4th Quarter 12 Months 2014 2013 2014 2013 Revenues $5,119 $4,599 $18,997 $17,124 Net Income 394 334 1,359 1,171 Diluted EPS 1.11 0.94 3.82 3.30 February 2015 Page 4
Slide 6: PACCAR Inc A+/A1 Credit Ratings
PACCAR Inc A+/A1 Credit Ratings ($ Millions) 12/31/14 Cash & Securities $2,937 Manufacturing Assets 5,765 Investment in Financial Services 2,393 Total Assets $11,095 Manufacturing Debt $ 0 Manufacturing Liabilities 4,342 Shareholders' Equity 6,753 Total Liabilities & Equity $11,095 February 2015 Pag
Slide 7: PACCAR Overview – Q4 2014
PACCAR Overview – Q4 2014 Record Consolidated Sales & Revenues of $5.12 Billion $394 Million Net Income Financial Services Pretax Income of $96 million Record PACCAR Parts Revenues of $789 million $6.75B Stockholders’ Equity A1/A+ Credit Ratings Regular Dividend Increased Over 140% in Last 5 years F
Slide 8: Excellent Financial Performance Throughout the Business Cycle
PACCAR Excellent Financial Performance Throughout the Business Cycle $ Billions Revenue $ Billions $ Millions Net Income $ Millions 20 20 1,500 1,500 18 18 16 16 1,200 1,200 14 14 12 12 900 900 10 10 8 8 600 600 6 6 4 4 300 300 2 2 0 0 0 0 05 06 07 08 09 10 11 12 13 14 05 06 07 08 09 10 11 12 13 14
Slide 9: PACCAR Revenue
PACCAR Revenue Europe ROW Europe ROW 26% 21% 33% 20% United States United States 47% 53% 2004 - $11.4 Billion 2014 - $18.9 Billion February 2015 Page 8
Slide 10: Commercial Vehicles, Aftermarket, Powertrain, IT, Financial Services
Commercial Vehicles Aftermarket Support Powertrain Information Technology Financial Services February 2015 Page 9
Slide 11: Heavy Duty Commercial Vehicles
Heavy Duty Commercial Vehicles Units (000s) Units 000s Units (000s) 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 97 99 01 03 05 07 09 11 13 15 Fcst US & Canada Europe South America February 2015 Page 10
Slide 12: New Product Introductions
New Product Introductions February 2015 Page 11
Slide 13: New DAF Euro 6 XF, CF, LF
New DAF Euro 6 XF, CF, LF February 2015 Page 12
Slide 14: PACCAR Engines Worldwide
PACCAR Engines Worldwide PACCAR PX-5 PACCAR PX-7 PACCAR PX-9 4.5 Liter 6.7 Liter 8.9 Liter PACCAR PR PACCAR MX-11 PACCAR MX-13 9.2 Liter 10.8 Liter 12.9 Liter February 2015 Page 13
Slide 15: PACCAR Mississippi Engine Factory
PACCAR Mississippi Engine Factory February 2015 Page 14
Slide 16: PACCAR Heavy Duty Market Share
PACCAR Heavy Duty Market Share 50% 50% 45% 45% 40% 40% 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% S. America Europe U.S. Canada Mexico 2004 2014 February 2015 Page 15
Slide 17: Balanced Customer Mix
Balanced Customer Mix Large Fleet Small / Medium Fleet Owner Operator Greater than 500 units 10 – 500 units Less than 10 units Vocational Private Fleet Full Service Leasing February 2015 Page 16
Slide 18: Parts Revenue
PACCAR Parts Revenue $ Millions $ Millions 3,500 3,500 3,000 3,000 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 0 05 06 07 08 09 10 11 12 13 14 February 2015 Page 17
Slide 19: Parts Distribution Centers
PACCAR Parts Distribution Centers PACCAR Distribution Centers February 2015 Page 18
Slide 20: Parts Investments
PACCAR Parts Investments Eindhoven Lancaster Renton Ponta Grossa February 2015 Page 19
Slide 21: Global Dealer Network
PACCAR Global Dealer Network February 2015 Page 20
Slide 22: Rigorous Cost Control
Rigorous Cost Control $ Millions SG&A % 500 8 400 6 300 4 200 2 05 06 07 08 09 10 11 12 13 14 Dollars % to Sales Design for Traditional LEAN Six Sigma Six Sigma • Reliability • Efficiency • Eliminate Defects • Fast & Easy • Productivity Assembly • Reduce • Streamlined Variation • Robust Processes De
Slide 23: Supplier partners and product quality
Throughout the world, PACCAR has earned a reputation for unsurpassed quality. Much of the credit for this global success goes to PACCAR partner suppliers. We salute these companies who join with us to make product quality the ultimate competitive advantage. February 2015 Page 22
Slide 24: >6t Regional Truck Market Growth
>6t Regional Truck Market Growth Russia/CIS Europe 170 100 290 385 China 11% Growth 1,100 1,000 North 6% Growth America 465 505 2% Growth India 2% Growth 360 210 Africa & Australia Latin America Middle East 185 200 11% Growth 17 25 250 190 2% Growth 3% Growth 4% Growth Rest of Asia 285 355 >6t Globa
Slide 25: PACCAR Global Expansion
PACCAR Global Expansion DAF Brasil Truck Assembly Plant Moscow Parts Distribution Center PACCAR India Technical Center PACCAR China Design Center February 2015 Page 24
Slide 26: South America Growth Opportunities
South America Growth Opportunities South America Heavy-Duty Truck PACCAR has Market 129k Units 35,000 Trucks Operating in South America $6B Latin America Parts Market São Paulo Parts Distribution Ponta Grossa Centers Opened: Santiago DAF Truck - 2010 Santiago Production - 2013 Ponta Grossa Started i
Slide 27: DAF Assembly Plant - Brasil
DAF Assembly Plant - Brasil February 2015 Page 26
Slide 28: February 2015 Page 27
PACCAR... February 2015 Page 27
Slide 29: Financial Services – Q4 2014
PACCAR Financial Services – Q4 2014 $11.9 Billion in Assets $96 Million Pretax Profit 166,000 Vehicles Financed 51,000 Customers Dealer Floorplan Retail Financing Full Service Leasing February 2015 Page 28
Slide 30: Financial Services Competitive Advantages
PACCAR Financial Services Competitive Advantages A+/A1 Credit Ratings Quality Portfolio Technology Leadership February 2015 Page 29
Slide 31: Financial Services Assets
PACCAR Financial Services Assets Australia 21% & Mexico Europe 21% PacLease Europe Australia PacLease 11% 12% & Mexico 21% 11% US & Canada 56% US & Canada 47% 2004 - $7.0 Billion 2014 - $11.9 Billion February 2015 Page 30
Slide 32: Financial Europe
PACCAR Financial Europe Trucks Trucks 000’s 000’s 50 50 40 40 30 30 20 20 $2.5 Billion in Assets 10 10 240 DAF Dealers 0 0 15 European Countries 05 06 07 08 09 10 11 12 13 14 February 2015 Page 31
Slide 33: PACCAR Leasing
PACCAR Leasing Trucks Trucks 000’s 000’s 40 40 35 35 30 30 25 25 20 20 561 Service Locations 15 15 38,300 Vehicles 10 10 $2.5 Billion Assets 05 06 07 08 09 10 11 12 13 14 February 2015 Page 32
Slide 34: Financial Services Delivers Strong Performance
PACCAR Financial Services Delivers Strong Performance Low 30+ Days Past Due Assets and Pretax Profit Assets Pretax Profit % % $ Billions $ Millions 8.0 8.0 16 400 7.0 7.0 14 350 6.0 6.0 12 300 5.0 5.0 10 250 4.0 4.0 8 200 3.0 3.0 6 150 2.0 2.0 4 100 1.0 1.0 2 50 0.0 0.0 0 0 90 92 94 96 98 00 02 04 0
Slide 35: Financial Services balance sheet
PACCAR Financial Services ($ Millions) 12/31/14 Finance & Other Receivables $9,043 Equipment on Operating Leases 2,306 Other Assets 568 Total Financial Services Assets $11,917 Commercial Paper $2,642 Term Notes & Bank Loans 5,589 Deferred Taxes & Other Liabilities 1,293 Total Financial Services Liab
Slide 36: PACCAR Competitive Advantages
PACCAR Competitive Advantages Excellent Shareholder Return Experienced Management Team Highest Quality Products Rigorous Cost Control Balanced Global Diversification Excellent Supplier Partnerships Extensive Capital Investments Innovative Technology Global Aftermarket Parts Sales Profitable Financia
Slide 37: February 2015 Page 36
PACCAR... February 2015 Page 36