2021 ANNUAL REPORT

1 2 0 2 1 A N N U A L R E P O R T. 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 S T O C K H O L D E R S ' I N F O R M A T I O N. PACCAR is a global technology company that designs and manufactures premium quality light, medium and heavy duty commercial vehicles sold worldwide under Corporate Offices Stock Transfer Trademarks Owned by PACCAR Building and Dividend PACCAR Inc and its 777 106th Avenue Dispersing Agent Subsidiaries the Kenworth, Peterbilt and DAF nameplates. PACCAR designs and manufactures Bellevue, Washington Equiniti Trust Company Braden, Carco, DAF, 98004 Shareowner Services EPIQ, Gearmatic, Kenmex, diesel engines and other powertrain components for use in its own products and Box 64854 Kenworth, Leyland, Online Mailing Address St. Paul, Minnesota Parts Counter, PACCAR, Box 1518 55164-0854 PACCAR Connect, for sale to third party manufacturers of trucks and buses. PACCAR distributes Bellevue, Washington PACCAR MX-11, PACCAR.

2 98009 MX-13, PACCAR PX, aftermarket truck parts to its dealers through a worldwide network of Parts PACCAR TX-8, PacFuel, Telephone PACCAR's transfer agent PacLease, PacLink, PacTax, maintains the company's PacTrac, PacTrainer, Distribution Centers. Finance and leasing subsidiaries facilitate the sale of shareholder records, issues Peterbilt, Peterbilt ARTech, Facsimile stock certificates and The World's Best, TRP, PACCAR products in many countries worldwide. PACCAR manufactures and distributes dividends and TruckTech+, SmartNav, IRS Forms 1099. Requests SmartLINQ and UltraLoft. Website concerning these matters markets industrial winches under the Braden, Carco and Gearmatic nameplates. should be directed to Independent Auditors Equiniti. Ernst & Young LLP. PACCAR maintains exceptionally high standards of quality for all of its products: Seattle, Washington Online Delivery of ANNUAL REPORT and Proxy SEC Form 10-K.

3 They are well engineered, highly customized for specific applications and sell in Statement PACCAR's ANNUAL REPORT PACCAR's 2021 ANNUAL to the Securities and the premium segments of their markets, where they have a reputation for superior REPORT and the 2022 Proxy Exchange Commission Statement are available on will be furnished to PACCAR's website at stockholders on request performance and pride of ownership. to the Corporate 2022annualmeeting Secretary, PACCAR Inc, Box 1518, Bellevue, Stockholders who hold Washington 98009. It is PACCAR stock in street also available online at name may inquire of their bank or broker about the , availability of electronic under SEC Filings or delivery of ANNUAL on the SEC's website at meeting documents. ANNUAL Stockholders'. Meeting April 26, 2022, 10:30 CONTENTS PACCAR Parts Distribution Center 1 Financial Highlights 52 Notes to Consolidated Financial Statements 405 Houser Way North Renton, Washington 3 Message from the Executive Chairman 91 Management's REPORT on Internal Control 98057.

4 4 Message from the Chief Executive Officer Over Financial Reporting 8 PACCAR Operations 91 REPORT of Independent Registered Public An Equal Opportunity Employer 26 Financial Charts Accounting Firm on the Company's 27 Stockholder Return Performance Graph Consolidated Financial Statements 28 Management's Discussion and Analysis 93 REPORT of Independent Registered Public 46 Consolidated Statements of Income Accounting Firm on the Company's This REPORT was printed on recycled paper. 47 Consolidated Statements Internal Control Over Financial Reporting of Comprehensive Income 94 Market Risks and Derivative Instruments 48 Consolidated Balance Sheets 95 Officers and Directors 50 Consolidated Statements of Cash Flows 96 Divisions and Subsidiaries 51 Consolidated Statements of Stockholders' Equity F I N A N C I A L H I G H L I G H T S. 2021 2020. (millions, except per share data). 1. Truck, Parts and Other Net Sales and Revenues $ 21, $ 17, Financial Services Revenues 1, 1, Total Revenues 23, 18, Net Income 1, 1, Total Assets: Truck, Parts and Other 13, 12, Financial Services 15, 15, Financial Services Debt 10, 10, Stockholders' Equity 11, 10, Per Common Share: Net Income: Basic $ $ Diluted Cash Dividends Declared Per Share REVENUES NET INCOME STOCKHOLDERS' EQUITY.

5 Billions of dollars billions of dollars billions of dollars 28 28 12 28%. 21 21 9 21%. 14 14 6 14%. 7 7 3 7%. 0 0 0 0%. 12 13 14 15 16 17 18 19 20 21 12 13 14 15 16 17 18 19 20 21 12 13 14 15 16 17 18 19 20 21. Revenues Net Income Stockholders' Equity Return on Revenues (percent) Return on Equity (percent). T O O U R S H A R E H O L D E R S. PACCAR is celebrating 116 years of success and delivered very good revenues and profits to its shareholders in 3. 2021. The PACCAR team did an excellent job managing the global logistic hurdles and the health pandemic. This is the 83rd consecutive year of earning a net profit a notable record considering the cyclicality of the capital goods market. PACCAR's prompt and thorough actions to reconfigure its manufacturing facilities, parts distribution centers, and offices ensured the health and safety of our employees. PACCAR achieved very good financial results by continuing to focus on the premium segment of our industry.

6 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 autonomous trucks. The company is a recognized environmental leader and is partnering with industry groups to reduce the effects of climate change. PACCAR continues to emphasize zero waste to landfill, solar power generation, water recycling, and increasing the recyclable material content in its trucks. PACCAR's strong year in 2021 is due to many positive factors including the launch of new Kenworth and Peterbilt heavy- and medium-duty vehicles; DAF's new product range that delivers operational excellence and luxury for its customers; and the strong performance of every geographic region. PACCAR Parts and PACCAR Financial Services set profit records in 2021 by their innovative deployment of technology initiatives that bundle services for our customers.

7 PACCAR Parts delivered new sales programs to a growing population of integrated and connected PACCAR vehicles and opened more TRP stores. PACCAR Financial Services, including PacLease, had a record year, generating strong new and used truck business volume. 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 have enjoyed good returns, with ANNUAL regular dividend growth of 8% in the last ten years and a $ per share extra dividend paid in early 2022. PACCAR is committed to a strong, diverse and inclusive culture and the company's excellent financial results reflect its human centered philosophy.

8 I would like to thank our employees for their commitment and dedication, their many ideas and suggestions to maintain the regular cadence in our daily operations and their personal outreach to local communities. Their volunteering and financial support was inspirational to everyone in our company and the communities in which we live and work. MARK C. PIGOTT. E xecutive Chairman Februar y 23, 2022. T O O U R S H A R E H O L D E R S. PACCAR had a very good year in 2021, generating strong revenues and profits. Revenues were $ billion and net 4. income of $ billion was the third highest in the company's history, with an after-tax return on revenue of PACCAR has earned an ANNUAL net income for 83 consecutive years. PACCAR's financial results reflect the company's premium-quality trucks, powertrains, aftermarket parts business, financial services and technology leadership. I am very proud of PACCAR's employees who delivered industry leading quality, innovation and efficiency in a year where they maintained excellent health protocols during the global pandemic and provided consistent production and customer aftermarket support despite supply base challenges.

9 PACCAR's financial strength enabled the company to invest $836 million in capital projects and research and development that launched the largest number of new truck models in its history, enhanced its manufacturing capability, expanded its range of engines, developed advanced vehicle technologies and strengthened its aftermarket transportation solutions. In 2021, DAF introduced a new range of heavy-duty trucks in Europe that were recognized as International Truck of the Year 2022 and Kenworth and Peterbilt introduced exciting new heavy- and medium-duty trucks in North America. PACCAR Parts achieved record sales of $ billion and record pre-tax profits of $ billion. PACCAR's A+/A1 credit rating supported PACCAR Financial Services' record pre-tax profits of $ million, including $ billion of new loan and lease volume. PACCAR continues to develop industry leading advanced vehicle technologies in the areas of zero emissions, autonomous vehicles and connected services.

10 PACCAR's strong financial performance generated industry leading after-tax return on beginning stockholders' equity of in 2021. Year-end stockholders' equity was a record $ billion. PACCAR's financial performance has enabled the company to declare $ 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 $ billion in capital projects and research and development over the last decade. These investments have supported the creation of advanced new vehicle models, new manufacturing and distribution facilities and innovative technologies. PACCAR's investments create transportation solutions that provide our customers the highest levels of quality, safety and reliability as well as the lowest total cost of operation. In 2021, capital investments were $ million and research and development expenses were $ million.