 ENVIRONMENTAL LEADERSHIP  — PACCAR is a global  environmental leader. All PACCAR manufacturing  facilities have earned ISO 14001 environmental  certification. Peterbilt Motors’ Model 386 Liquefied  Natural Gas (LNG) truck received Environmental  Protection Agency (EPA) accreditation for the industry’s  first SmartWay designated alternative-fuel vehicle. The  company’s manufacturing facilities enhanced their “Zero  Waste to Landfill” programs during the year. PACCAR  employees are environmentally conscious and utilize van pools, car pools and bus passes for 30% of their  business commuting. A LOOK AHEAD  — PACCAR’s 23,400 employees  enabled the company to distinguish itself as a global  leader in the technology, capital goods, financial services  and aftermarket parts businesses. Superior product  quality, technological innovation and balanced global  diversification are three key operating characteristics  that define PACCAR’s business philosophy. and Bob Parry are retiring after eight years on the  PACCAR Board of Directors. Steve’s strong analytical  knowledge of international business and Bob’s thorough  understanding of finance and economics contributed to  PACCAR’s success. We thank Tom, Steve and Bob for their  dedication and wish them a happy and healthy retirement.  PACCAR and its employees are proud of the  remarkable achievement of 73 consecutive years of net profit. PACCAR embraces a long-term view of its  businesses, and our shareholders have benefited from  that approach. The embedded principles of integrity,  quality and consistency of purpose continue to define  the course in PACCAR’s operations. The proven  business strategy — deliver technologically advanced  premium products and an extensive array of tailored aftermarket customer services — enables PACCAR to  pragmatically approach growth opportunities with a  long-term focus. PACCAR is enhancing its stellar  reputation as a leading technology company in the  capital goods and financial services marketplace. Current estimates for the industry 2012 Class 8  trucks in the U.S. and Canada indicate that sales could  range from 210,000-240,000 units. Sales for Class 6 – 7  trucks are expected to be between 60,000-70,000 vehicles.  The European 15+ tonne truck market in 2012 is also  estimated to be in the range of 210,000-240,000 trucks,  while demand for medium duty trucks should range  from 55,000-65,000 units. The outlook for 2012 appears good as the North  American economy generates growth of 2-3%, though  Europe is struggling with economic challenges. There  are opportunities for PACCAR to grow its business in its  current markets and eventually in the emerging BRIC  markets. PACCAR is well positioned and committed to maintaining the profitable results its shareholders  expect, by delivering industry-leading products and  services globally. PACCAR recognizes three significant retirements. Vice Chairman Tom Plimpton retired upon completion  of 35 years of exemplary service, in which he was  instrumental in the integration of DAF into PACCAR,  the growth of Peterbilt and providing the foundation for PACCAR’s increased investments in Asia. We thank  Tom for his dedication, superb performance and positive  outreach during his years at PACCAR. Steve Page Front Row Left to Right: Kyle Quinn, Jack LeVier, Ron Armstrong,  Michael Barkley; Back Row Left to Right: Sam Means, Harrie  Schippers, Dan Sobic, Mark Pigott, Bob Christensen, Dave  Anderson, Bob Bengston MARK C. PIG OTT Chairman and Chief Executive Officer February 21, 2012