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What changed in Paccar's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Paccar's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+198 added−192 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-19)

Top changes in Paccar's 2025 10-K

198 paragraphs added · 192 removed · 168 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

42 edited+5 added−9 removed57 unchanged
Biggest changeThe Company will continue to fund capital and R&D projects to meet future emissions and certification requirements through the introduction of new technologies into our products, engines and exhaust after-treatment systems. The Company’s manufacturing and assembly plants are subject to environmental laws and regulations such as regulating air emissions, water discharges and the handling and disposal of hazardous substances.
Biggest changeThe Company continually monitors developments in emissions and climate change-related laws and regulations in the markets in which the Company conducts business. The Company will continue to fund capital and research and development (R&D) projects to meet future emissions and certification requirements through the introduction of new technologies into our products, engines and exhaust after-treatment systems.
OTHER BUSINESSES Other businesses included the manufacturing of industrial winches in two U.S. plants and marketing them under the BRADEN, CARCO and Gearmatic nameplates through October 31, 2024. Sales of industrial winches were less than 1% of total net sales and revenues in 2024, 2023 and 2022. PATENTS The Company owns numerous patents which relate to all product lines.
OTHER BUSINESSES Other businesses included the manufacturing of industrial winches in two U.S. plants and marketing them under the BRADEN, CARCO and Gearmatic nameplates through October 31, 2024. Sales of industrial winches were less than 1% of total net sales and revenues in 2024 and 2023. PATENTS The Company owns numerous patents which relate to all product lines.
The Company designs and manufactures engines for use in PACCAR vehicles worldwide. The Company’s operations and products are subject to extensive statutory and regulatory requirements governing greenhouse gas and non-greenhouse gas emissions. These include standards imposed by the U.S.
The Company designs and manufactures engines for use in PACCAR vehicles worldwide. The Company’s operations and products are subject to extensive statutory and regulatory requirements governing greenhouse gas, non-greenhouse gas emissions and batteries. These include standards imposed by the U.S.
Aftermarket truck parts are sold and delivered to the Company’s independent dealers through the Company’s 20 strategically located parts distribution centers (PDCs) in the U.S., Canada, Europe, Australia, Mexico and Central and South America. Parts are primarily purchased from various suppliers and also manufactured by the Company.
Aftermarket truck parts are sold and delivered to the Company’s independent dealers through the Company’s 21 strategically located parts distribution centers (PDCs) in the U.S., Canada, Europe, Australia, Mexico and Central and South America. Parts are primarily purchased from various suppliers and also manufactured by the Company.
Sales of trucks manufactured with these cabs amounted to approximately 2% of consolidated revenues in 2024. A short-term loss of supply, and the resulting interruption in the production of these trucks, would not have a material effect on the Company’s results of operations.
Sales of trucks manufactured with these cabs amounted to approximately 2% of consolidated revenues in 2025. A short-term loss of supply, and the resulting interruption in the production of these trucks, would not have a material effect on the Company’s results of operations.
Sitko (48) Vice President and General Manager of PACCAR Parts since January 2025; Assistant General Manager of Operations, Kenworth from June 2022 to December 2024; Assistant General Manager of Sales and Marketing, PACCAR Financial Corp from January 2019 to May 2022. James W.
Sitko (49) Vice President and General Manager of PACCAR Parts since January 2025; Assistant General Manager of Operations, Kenworth from June 2022 to December 2024; Assistant General Manager of Sales and Marketing, PACCAR Financial Corp from January 2019 to May 2022. James W.
Production of the year-end 2024 backlog is expected to be substantially completed during 2025. PARTS The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles to over 2,000 Kenworth, Peterbilt and DAF dealers and more than 350 TRP, PACCAR's aftermarket parts brand, stores in 95 countries around the world.
Production of the year-end 2025 backlog is expected to be substantially completed during 2026. PARTS The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles to over 2,000 Kenworth, Peterbilt and DAF dealers and more than 350 TRP, PACCAR's aftermarket parts brand, stores in 99 countries around the world.
Rich (56) Senior Vice President and Chief Technology Officer since January 2024; Vice President and Chief Technology Officer from March 2021 to December 2023; Prior to that, he worked for 30 years at Ford Motor Company in positions of increasing responsibility including Director of Autonomous Vehicles and Technology; Chief Operating Officer of AV LLC and Executive Director of Global Strategy.
Rich (57) Executive Vice President and Chief Technology Officer since January 2026; Senior Vice President and Chief Technology Officer from January 2024 to December 2025; Vice President and Chief Technology Officer from March 2021 to December 2023; Prior to that, he worked for 30 years at Ford Motor Company in positions of increasing responsibility including Director of Autonomous Vehicles and Technology; Chief Operating Officer of AV LLC and Executive Director of Global Strategy.
Commercial truck manufacturing comprises the largest segment of PACCAR’s business and accounted for 74% of total 2024 net sales and revenues. Substantially all trucks are sold to independent dealers. The Kenworth and Peterbilt nameplates are marketed and distributed by separate divisions in the U.S. and a foreign subsidiary in Canada.
Commercial truck manufacturing comprises the largest segment of PACCAR’s business and accounted for 68% of total 2025 net sales and revenues. Substantially all trucks are sold to independent dealers. The Kenworth and Peterbilt nameplates are marketed and distributed by separate divisions in the U.S. and a foreign subsidiary in Canada.
The Company also manufactures engines at its Columbus, Mississippi facility. In 2024, the Company installed PACCAR engines in approximately 33% of the Company’s Kenworth and Peterbilt heavy‑duty trucks in the U.S. and Canada and substantially all of the DAF heavy-duty trucks sold throughout the world. Engines not manufactured by the Company are purchased from Cummins Inc. (Cummins).
The Company also manufactures engines at its Columbus, Mississippi facility. In 2025, the Company installed PACCAR engines in approximately 29% of the Company’s Kenworth and Peterbilt heavy-duty trucks in the U.S. and Canada and substantially all of the DAF heavy-duty trucks sold throughout the world. Engines not manufactured by the Company are purchased from Cummins Inc. (Cummins).
Aftermarket parts inventory levels are determined largely by anticipated customer demand and the need for timely delivery. The Parts segment accounted for 20% of total 2024 net sales and revenues. Key factors affecting Parts segment earnings include the aftermarket parts sold in the markets served and the margins realized on the sales.
Aftermarket parts inventory levels are determined largely by anticipated customer demand and the need for timely delivery. The Parts segment accounted for 24% of total 2025 net sales and revenues. Key factors affecting Parts segment earnings include the aftermarket parts sold in the markets served and the margins realized on the sales.
PACCAR also competes in the North American Class 6 to 7 markets primarily with Kenworth and Peterbilt conventional models. These trucks are assembled at facilities in Ste. Therese, Canada; Denton, Texas, and Mexicali, Mexico.
These trucks are assembled at facilities in Chillicothe, Ohio; Denton, Texas; Renton, Washington; Mexicali, Mexico and Ste. Therese, Canada. PACCAR also competes in the North American Class 6 to 7 markets primarily with Kenworth and Peterbilt conventional models. These trucks are assembled at facilities in Ste. Therese, Canada; Chillicothe, Ohio; Denton, Texas and Mexicali, Mexico.
Paulo H. Bolgar (56) Vice President and Chief Human Resources Officer since June 2022; Served as Human Resources Vice President of Americas and Global Business Units and Global R&D for Baxter International, Inc. from January 2020 to May 2022. Craig R.
Bolgar (57) Vice President and Chief Human Resources Officer since June 2022; Served as Human Resources Vice President of Americas and Global Business Units and Global R&D for Baxter International, Inc. from January 2020 to May 2022. Craig R.
PFS’s retail loan and lease customers consist of small, medium and large commercial trucking companies, independent owner/operators and other businesses and acquire their PACCAR trucks principally from independent PACCAR dealers. PFS accounted for 6% of total net sales and revenues and 52% of total assets in 2024. PFS is primarily responsible for managing the sales of the Company’s used trucks.
PFS’s retail loan and lease customers consist of small, medium and large commercial trucking companies, independent owner/operators and other businesses and acquire their PACCAR trucks principally from independent PACCAR dealers. PFS accounted for 8% of total net sales and revenues and 51% of total assets in 2025. PFS is primarily responsible for managing the sales of the Company’s used trucks.
In addition, the Company’s reports filed with the SEC can be found at www.sec.gov . 9 INFORMATION ABOUT THE COMPANY’S EXECUTIVE OFFICERS Item 401(b) of Regulation S-K: Information about the Company’s Executive Officers as of February 19, 2025 is as follows: Name and Age Present Position and Other Position(s) Held During Last Five Years Mark C.
In addition, the Company’s reports filed with the SEC can be found at www.sec.gov . 8 INFORMATION ABOUT THE COMPANY’S EXECUTIVE OFFICERS Item 401(b) of Regulation S-K: Information about the Company’s Executive Officers as of February 18, 2026 is as follows: Name and Age Present Position and Other Position(s) Held During Last Five Years Mark C.
Gryniewicz (57) Vice President, Global Financial Services since February 2025; Vice President of PACCAR and President of PACCAR Financial Corp. from February 2019 to January 2024. A. Lily Ley (59) Vice President and Chief Information Officer since January 2017. Jacob J.
Gryniewicz (58) Vice President, Global Financial Services since February 2025; Vice President of PACCAR and President of PACCAR Financial Corp. from February 2019 to January 2024. A. Lily Ley (60) Vice President and Chief Information Officer since January 2017. Jacob J.
In Europe, there are six principal competitors in the commercial truck market, including parent companies to the four competitors of the Company in the U.S. In 2024, DAF had a 14.4% share of the European heavy-duty market and a 9.5% share of the light/medium-duty market. These markets are highly competitive in price, quality and service.
In Europe, there are six principal competitors in the commercial truck market, including parent companies to the four competitors of the Company in the U.S. In 2025, DAF had a 13.5% share of the European heavy-duty market and a 9.7% share of the light/medium-duty market. These markets are highly competitive in price, quality and service.
The Company had a total production backlog of $7.6 billion at the end of 2024. Within this backlog, orders scheduled for delivery within three months (90 days) are considered to be firm. The 90‑day backlog approximated $3.8 billion at December 31, 2024, $7.6 billion at December 31, 2023 and $8.0 billion at December 31, 2022.
The Company had a total production backlog of $4.9 billion at the end of 2025. Within this backlog, orders scheduled for delivery within three months (90 days) are considered to be firm. The 90‑day backlog approximated $2.6 billion at December 31, 2025, $3.8 billion at December 31, 2024 and $7.6 billion at December 31, 2023.
The factory is expected to start production in the next few years. OTHER DISCLOSURES The Company’s filings on Forms 10‑K, 10‑Q and 8‑K and any amendments to those reports can be found on the Company’s website www.paccar.com free of charge as soon as practicable after the report is electronically filed with, or furnished to, the Securities and Exchange Commission (SEC).
OTHER DISCLOSURES The Company’s filings on Forms 10‑K, 10‑Q and 8‑K and any amendments to those reports can be found on the Company’s website www.paccar.com free of charge as soon as practicable after the report is electronically filed with, or furnished to, the Securities and Exchange Commission (SEC).
(2) The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles. (3) The Financial Services segment 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.
(2) The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles. (3) The Financial Services segment 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. TRUCKS PACCAR’s trucks are marketed under the Kenworth, Peterbilt and DAF nameplates.
The primary laws and regulations are the EPA’s Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium and Heavy-Duty Engines and Vehicles, EPA’s Clean Truck Initiative, the Regulation of the European Parliament and of the Council on the Monitoring and Reporting of CO2 Emissions from Fuel Consumption of New Heavy-Duty Vehicles, and the Heavy-Duty Omnibus Regulation and Advanced Clean Truck (ACT) regulation of the California Air Resources Board.
The primary laws and regulations are the EPA’s Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium and Heavy-Duty Engines and Vehicles, EPA’s Low NOx Rule, the Regulation of the European Parliament and of the Council on the Monitoring and Reporting of CO2 Emissions from Fuel Consumption of New Heavy-Duty Vehicles, and the Heavy-Duty Omnibus Regulation and, subject to pending litigation, the Advanced Clean Truck (ACT) regulation of the California Air Resources Board.
HUMAN CAPITAL MANAGEMENT PACCAR is committed to a strong, inclusive and collaborative culture and the Company’s excellent financial results reflect its outstanding workforce. The Company provides its employees with robust benefit packages, comprehensive training programs, tuition assistance and a work environment that promotes safety, respect and belonging. The Company’s benefit packages support employee physical, emotional and financial well-being.
HUMAN CAPITAL MANAGEMENT PACCAR is committed to a strong and collaborative culture and the Company’s excellent financial results reflect its outstanding workforce. The Company provides its employees with robust benefit packages, comprehensive training programs, tuition assistance and a work environment that promotes safety and respect.
Baney (54) Executive Vice President since January 2025; Senior Vice President from January 2024 to December 2024; Vice President of PACCAR and General Manager of Kenworth Truck Company from August 2019 to December 2023. C. Michael Dozier (59) Executive Vice President since January 2023; Senior Vice President from January 2020 to December 2022. Darrin C.
Baney (55) President since January 2026; Executive Vice President from January 2025 to December 2025; Senior Vice President from January 2024 to December 2024; Vice President of PACCAR and General Manager of Kenworth Truck Company from August 2019 to December 2023. C. Michael Dozier (60) Executive Vice President since January 2023; Senior Vice President from January 2020 to December 2022.
Bloch (48) Senior Vice President since January 2025; Vice President of PACCAR and General Manager of PACCAR Parts from March 2022 to December 2024; Senior Assistant General Manager of Sales and Marketing, PACCAR Parts from August 2021 to February 2022; Assistant General Manager of Sales and Marketing, Kenworth from February 2019 to July 2021. John N.
Laura J. Bloch (49) Senior Vice President since January 2025; Vice President of PACCAR and General Manager of PACCAR Parts from March 2022 to December 2024; Senior Assistant General Manager of Sales and Marketing, PACCAR Parts from August 2021 to February 2022; Assistant General Manager of Sales and Marketing, Kenworth from February 2019 to July 2021. Brice J.
Montero (41) Vice President of PACCAR and General Manager of Peterbilt since January 2025; Assistant General Manager of Sales and Marketing, Peterbilt from July 2023 to December 2024; General Sales Manager, Peterbilt from August 2019 to June 2023. Brice J.
Montero (42) Vice President of PACCAR and General Manager of Peterbilt since January 2025; Assistant General Manager of Sales and Marketing, Peterbilt from July 2023 to December 2024; General Sales Manager, Peterbilt from August 2019 to June 2023. Harald P.
The Company also designs and manufactures diesel engines, primarily for use in the Company’s trucks, at its facilities in Columbus, Mississippi; Eindhoven, the Netherlands; and Ponta Grossa, Brasil. PACCAR competes in the North American Class 8 market, primarily with Kenworth and Peterbilt conventional models. These trucks are assembled at facilities in Chillicothe, Ohio; Denton, Texas; Renton, Washington and Mexicali, Mexico.
The Company also designs and manufactures diesel engines, primarily for use in the Company’s trucks, at its facilities in Columbus, Mississippi; Eindhoven, the Netherlands and Ponta Grossa, Brasil. PACCAR competes in the North American Class 8 market, primarily with Kenworth and Peterbilt conventional models.
Walenczak (50) Vice President of PACCAR and General Manager of Kenworth since January 2024; Assistant General Manager – Sales and Marketing, Kenworth from August 2021 to December 2023; Assistant General Manager – Operations, PACCAR Parts from February 2019 to July 2021. Michael K.
Walenczak (51) Vice President of PACCAR and General Manager of Kenworth since January 2024; Assistant General Manager – Sales and Marketing, Kenworth from August 2021 to December 2023; Assistant General Manager – Operations, PACCAR Parts from February 2019 to July 2021. Michael K. Walton (61) Vice President and General Counsel since August 2020. Harry M.B.
There are four principal competitors in the U.S. and Canada commercial truck market. The Company’s share of the U.S. and Canadian Class 8 market was 30.7% of retail sales in 2024, and the Company’s medium-duty market share was 18.0%.
There are four principal competitors in the U.S. and Canada commercial truck market. The Company’s share of the U.S. and Canadian Class 8 market was 29.9% of retail sales in 2025, and the Company’s medium-duty market share was 15.9%.
Pigott (71) Executive Chairman of the Board of Directors since April 2014; Chairman and Chief Executive Officer from 1997 to April 2014. Mr. Pigott is the brother of John M. Pigott, a director of the Company. R. Preston Feight (57) Chief Executive Officer since July 2019. Harrie C.A.M. Schippers (62) President and Chief Financial Officer since January 2018. Kevin D.
Pigott (72) Executive Chairman of the Board of Directors since April 2014; Chairman and Chief Executive Officer from 1997 to April 2014. Mr. Pigott is the brother of John M. Pigott, a director of the Company. R. Preston Feight (58) Chief Executive Officer since July 2019. Kevin D.
Failure to comply with these regulations could lead to fines and other penalties. The Company believes in all material respects it is in compliance with the laws and regulations applicable to our plants and operations.
The Company believes in all material respects it is in compliance with the laws and regulations applicable to our plants and operations.
Operations - PACCAR is committed to environmental responsibility in the vehicle production process. PACCAR is continuously looking for ways to reduce waste, reuse materials, conserve energy in its facilities and reduce the environmental impact of our activities. PACCAR’s factories are ISO 14001 certified and more than 80% are zero waste-to-landfill.
PACCAR is continuously looking for ways to reduce waste, reuse materials, conserve energy in its facilities and reduce the environmental impact of our activities. PACCAR’s factories are ISO 14001 certified and more than 80% are zero waste-to-landfill. Innovative Products - A key element of PACCAR’s environmental strategy is to offer our customers commercial vehicles that reduce environmental impacts.
Remanufacturing - Remanufacturing is the industrial process of returning a previously used component to “like-new” condition. Remanufacturing helps the environment by reducing waste. PACCAR’s aftermarket parts division sells remanufactured engines and many other remanufactured components. PACCAR is investing in additional global engine manufacturing capacity, and in the construction of a new engine remanufacturing facility in Columbus, Mississippi.
PACCAR continues to independently advance key battery-electric vehicle technologies and drive towards their implementation. Remanufacturing - Remanufacturing is the industrial process of returning a previously used component to “like-new” condition. Remanufacturing helps the environment by reducing waste. PACCAR’s aftermarket parts division sells remanufactured engines and many other remanufactured components.
Poplawski (60) Vice President and Controller since May 2023; Senior Operations Controller from July 2020 to April 2023; Corporate Operations Controller from January 2007 to June 2020. Harald P. Seidel (57) Vice President of PACCAR and President of DAF Trucks N.V. since August 2022; Director of Finance of DAF Trucks N.V. from October 2017 to July 2022. Bryan M.
Seidel (58) Vice President of PACCAR and President of DAF Trucks N.V. since August 2022; Director of Finance of DAF Trucks N.V. from October 2017 to July 2022. Bryan M.
PACCAR has publicly disclosed greenhouse gas emissions on its website and through CDP (formerly Carbon Disclosure Project) since 2014 and has established greenhouse gas emission reduction targets approved by the Science Based Targets Initiative (SBTi). PACCAR expects to continue to significantly invest in technologies to improve fuel efficiency for its customers, which would also reduce greenhouse gas emissions.
The Company’s environmental management system and policy are designed to focus on the reduction of the environmental impacts of the Company’s activities, products and services. PACCAR has publicly disclosed greenhouse gas emissions on its website and through CDP (formerly Carbon Disclosure Project) since 2014 and has established greenhouse gas emission reduction targets approved by the Science Based Targets Initiative (SBTi).
Low Carbon and Renewable Fuels – All truck sales and diesel engine unit sales are certified to use biofuels. PACCAR’s MX-13 and MX-11 engines are certified to use B10/B20/B30 and XTL biofuels in Europe and B20 biofuel in the U.S. Engines used in PACCAR trucks not manufactured by the Company are certified to use up to B20 biofuels.
PACCAR’s MX-13 and MX-11 engines are certified to use B7 and B100 biofuels in Europe and B20 biofuel in the U.S. Engines used in PACCAR trucks not manufactured by the Company are certified to use up to B20 biofuels. Advanced Vehicles - PACCAR continued its work on the SuperTruck 3 program, a U.S.
To develop these industry-leading products and technologies, PACCAR makes significant research and development and capital investments every year. PACCAR’s Zero Emissions Trucks - PACCAR’s research and development efforts include demonstration and development projects for Kenworth, Peterbilt and DAF vehicles, including battery-electric, hydrogen fuel cell, hydrogen combustion and hybrid technologies. PACCAR is currently producing battery-electric Kenworth, Peterbilt and DAF trucks.
PACCAR’s Zero Emissions Trucks - PACCAR’s research and development efforts include demonstration and development projects for Kenworth, Peterbilt and DAF vehicles, including battery-electric, hydrogen combustion and hybrid technologies. PACCAR is currently producing battery-electric Kenworth, Peterbilt and DAF trucks. Low Carbon and Renewable Fuels - All truck sales and diesel engine unit sales are certified to use biofuels.
PACCAR’s commitment to the environment is demonstrated in the Company’s energy efficient operations and technologically advanced products. The Company’s environmental management system and policy are designed to focus on the reduction of the environmental impacts of the Company’s activities, products and services.
ENVIRONMENTAL AND SUSTAINABILITY LEADERSHIP Reducing the environmental impact of the Company’s activities and products is an integral part of the Company’s process of continuous improvement. PACCAR’s commitment to the environment is demonstrated in the Company’s energy efficient operations and technologically advanced products.
The Company also has engine remanufacturing capacity on its Eindhoven Campus in the Netherlands. 8 Connected Trucks and Driver Training - PACCAR Connect fleet management system gives fleet customers real-time information on vehicle and driver performance including fuel consumption, fleet utilization, idle time and route optimization.
Connected Trucks and Driver Training - PACCAR Connect fleet management system gives fleet customers real-time information on vehicle and driver performance including fuel consumption, fleet utilization, idle time and route optimization. This information enables customers to improve fleet operating efficiency and reduce fuel consumption and CO2 emissions. PACCAR has introduced technologies that train drivers to operate vehicles more efficiently.
Walton (60) Vice President and General Counsel since August 2020; Senior Counsel from August 2007 to July 2020. Harry M.B. Wolters (54) Vice President of PACCAR and General Manager Global Powertrain & Electrification since August 2022; Vice President of PACCAR and President of DAF Trucks N.V. from September 2018 to July 2022.
Wolters (55) Vice President of PACCAR and General Manager Global Powertrain & Electrification since August 2022; Vice President of PACCAR and President of DAF Trucks N.V. from September 2018 to July 2022. Officers are appointed by the Board of Directors annually but may be appointed or removed on interim dates. 9
Innovative Products - A key element of PACCAR’s environmental strategy is to offer our customers commercial vehicles that reduce environmental impacts. The Company invests in technologies that reduce greenhouse gas emissions such as highly fuel-efficient diesel engines, natural gas and biofuel engines, as well as next generation electric, hybrid, and hydrogen powertrains.
The Company invests in technologies that reduce greenhouse gas emissions such as highly fuel-efficient diesel engines, biofuel engines, as well as next generation electric and hybrid powertrains and battery cell and pack technology. To develop these industry-leading products and technologies, PACCAR makes significant research and development and capital investments every year.
The SuperTruck initiative was launched in 2009 by the DOE to improve heavy-duty truck freight efficiency. Kenworth and Peterbilt successfully developed state-of-the-art vehicles in the prior SuperTruck and SuperTruck 2 programs. Many of the technologies developed in the earlier SuperTruck programs were deployed in production vehicles, benefiting the environment and PACCAR’s customers.
Department of Energy (DOE) initiative to develop state-of-the-art zero emissions medium- and heavy-duty trucks, until the cancellation of the program in 2025. The SuperTruck initiative, launched in 2009, has driven significant advancements in heavy-duty truck freight efficiency, and Kenworth and Peterbilt have successfully deployed many of those technologies in production.
This information enables customers to improve fleet operating efficiency and reduce fuel consumption and CO2 emissions. PACCAR has introduced technologies that train drivers to operate vehicles more efficiently. Battery Manufacturing - PACCAR, Cummins, Daimler Trucks and EVE Energy have partnered to produce state-of-the-art commercial vehicle batteries in a 21-gigawatt hour (GWh) factory in Marshall County, Mississippi.
Battery Manufacturing - PACCAR, Cummins, Daimler Trucks and EVE Energy have partnered to produce state-of-the-art commercial vehicle batteries in a 21-gigawatt hour (GWh) factory in Marshall County, Mississippi. Along with our joint venture partners, the Company is reviewing the timing of investments as a result of changing market-adoption projections.
Removed
PACCAR's Other business included the manufacturing and marketing of industrial winches through October 31, 2024, when PACCAR sold 100% of the capital stock of PACCAR Winch Inc. TRUCKS PACCAR’s trucks are marketed under the Kenworth, Peterbilt and DAF nameplates.
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The Company’s manufacturing and assembly plants are subject to environmental laws and regulations such as regulating air emissions, water discharges and the handling and disposal of hazardous substances. Failure to comply with these regulations could lead to fines and other penalties.
Removed
The ACT regulation, which has been adopted by several other states, requires an increasing percentage of medium- and heavy-duty trucks sold into the state to be zero emissions. The Company continually monitors developments in emissions and climate change-related laws and regulations in the markets in which the Company conducts business.
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The Company is also embedding artificial intelligence (AI) across its business to drive innovation, profitable growth and enhanced performance for PACCAR’s customers. On December 31, 2025, the Company had approximately 25,900 employees. Approximately 40% were U.S. employees.
Removed
Employee satisfaction and engagement are measured through periodic surveys. Employee training and development programs are extensive and comprehensive, including professional and technical skills training, compliance training, leadership development and management training.
Added
PACCAR expects to continue to significantly invest in technologies to improve fuel efficiency for its customers, which would also reduce greenhouse gas emissions. 7 Operations - PACCAR is committed to environmental responsibility in the vehicle production process.
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The Company is proud to have been honored for the past several years as a Top Company for Women to Work for in Transportation by the Women in Trucking Association. PACCAR has a proud tradition of making grants around the world for education, social services and the arts to enrich the communities in which its employees live and work.
Added
PACCAR is investing in additional global engine manufacturing capacity, and has constructed a new engine remanufacturing facility in Columbus, Mississippi. The Company also has engine remanufacturing capacity on its Eindhoven Campus in the Netherlands.
Removed
Safety is a key priority and the Company’s major manufacturing facilities are equipped with safety and health departments staffed with trained medical personnel. The Company’s managers continuously address safety enhancements; provide regular and ongoing safety training; and use displays located in the Factories, Parts Distribution Centers and Offices to provide all employees with safety-related information.
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Poplawski (61) Senior Vice President and Chief Financial Officer since June 2025; Vice President and Controller from May 2023 to June 2025; Senior Operations Controller from July 2020 to April 2023. Paulo H.
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PACCAR’s consistent focus on workplace safety has resulted in a recordable injury rate lower than the U.S. industry average. On December 31, 2024, the Company had approximately 30,100 employees. Approximately 38% were U.S. employees. 7 ENVIRONMENTAL AND SUSTAINABILITY LEADERSHIP Reducing the environmental impact of the Company’s activities and products is an integral part of the Company’s process of continuous improvement.
Removed
Advanced Vehicles - PACCAR continued its SuperTruck 3 program to develop and deploy next generation Class 8 Kenworth and Peterbilt battery-electric vehicles, along with its vehicle charging infrastructure. SuperTruck 3 is a U.S. Department of Energy (DOE) initiative to develop state-of-the-art zero emissions medium- and heavy-duty trucks.
Removed
Siver (58) Executive Vice President since January 2023; Senior Vice President from January 2017 to December 2022. Laura J.
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Officers are appointed by the Board of Directors annually but may be appointed or removed on interim dates. 10

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

12 edited+3 added−0 removed32 unchanged
Biggest changeThe Company could experience higher research and development and manufacturing costs due to changes in government requirements for its products, including changes in emissions, fuel, greenhouse gas or other regulations. 12 Emissions Requirements and Reduction Targets. PACCAR’s operations and products are subject to extensive statutory and regulatory requirements governing greenhouse gas and non-greenhouse gas emissions.
Biggest changeThe Company’s operations are subject to environmental laws and regulations that impose significant compliance costs. The Company could experience higher research and development and manufacturing costs due to changes in government requirements for its products, including changes in emissions, fuel, greenhouse gas or other regulations. Emissions Requirements and Reduction Targets.
Information Technology and Cybersecurity. The Company relies on information technology systems and networks, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of its business processes and activities.
Information Technology, Cybersecurity and AI. The Company relies on information technology systems and networks, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of its business processes and activities.
Some of the Company’s products include telematics which provide over-the-air software updates, advanced fleet management tools and real-time data analytics on driver and vehicle performance.
Some of the Company’s products include telematics which provide over-the-air software updates, advanced fleet management tools and real-time data on driver and vehicle performance.
If the Company is not successful in addressing the risks noted above, there may be a material adverse impact on its business, operations, and financial condition. 11 Liquidity Risks, Credit Ratings and Costs of Funds. Disruptions or volatility in global financial markets could limit the Company’s sources of liquidity, or the liquidity of customers, dealers and suppliers.
If the Company is not successful in addressing the risks noted above, there may be a material adverse impact on its business, operations, and financial condition. 10 Liquidity Risks, Credit Ratings and Costs of Funds. Disruptions or volatility in global financial markets could limit the Company’s sources of liquidity, or the liquidity of customers, dealers and suppliers.
Changes in government monetary or fiscal policies and international trade policies may impact demand for the Company’s products, financial results and competitive position. PACCAR’s global operations are subject to extensive trade, competition and anti-corruption laws and regulations that could impose significant compliance costs. Environmental Regulations. The Company’s operations are subject to environmental laws and regulations that impose significant compliance costs.
Changes in government monetary or fiscal policies and international trade policies, including tariffs, may impact demand for the Company’s products, financial results and competitive position. PACCAR’s global operations are subject to extensive trade, competition and anti-corruption laws and regulations that could impose significant compliance costs. 11 Environmental Regulations.
Political, Regulatory and Economic Risks Multinational Operations . The Company’s global operations are exposed to political, economic and other risks and events beyond its control in the countries in which the Company operates.
The Company’s global operations are exposed to political, economic and other risks and events beyond its control in the countries in which the Company operates.
The primary laws and regulations are the EPA’s Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium and Heavy-Duty Engines and Vehicles, EPA’s Clean Truck Initiative, the Regulation of the European Parliament and of the Council on the Monitoring and Reporting of CO2 Emissions from Fuel Consumption of New Heavy-Duty Vehicles, and the Heavy-Duty Omnibus Regulation and Advanced Clean Truck (ACT) regulation of the California Air Resources Board.
The primary laws and regulations are the EPA’s Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium and Heavy-Duty Engines and Vehicles, EPA’s Low NOx Rule, the Regulation of the European Parliament and of the Council on the Monitoring and Reporting of CO2 Emissions from Fuel Consumption of New Heavy-Duty Vehicles, and the Heavy-Duty Omnibus Regulation, Emergency Rulemaking and, subject to pending litigation, the Advanced Clean Truck (ACT) regulation of the California Air Resources Board (CARB).
The pace of transition from diesel combustion to alternative powertrain commercial vehicles is highly uncertain and will be influenced by: • the success of the Company’s research and development programs • customer demand for alternative powertrain vehicles • advancements in battery-electric, hybrid, hydrogen fuel cell, and hydrogen combustion technology • the cost of batteries, hydrogen fuel cells and liquid hydrogen • global regulations requiring the use of alternative powertrain vehicles and/or providing incentives to facilitate the transition to alternative powertrain commercial vehicles • investments in energy and power infrastructure (e.g., renewable power supply, electric charging services, hydrogen supply and distribution) in key markets, as well as the associated utility costs • the ability of the supply chain to deliver components, including commodities and raw materials that are unique to alternative powertrain commercial vehicles • the success of new and existing competitors in developing and selling alternative powertrain commercial vehicles The Company believes its current strategies, programs and resources are sufficient to address changes in customer demand in the context of climate change and to meet its emissions reduction targets.
The pace of transition from diesel combustion to alternative powertrain commercial vehicles is highly uncertain and will be influenced by: • the success of the Company’s research and development programs • customer demand for alternative powertrain vehicles • advancements in battery-electric, hybrid, hydrogen fuel cell, and hydrogen combustion technology • the cost of batteries, hydrogen fuel cells and liquid hydrogen • global regulations requiring the use of alternative powertrain vehicles and/or providing incentives to facilitate the transition to alternative powertrain commercial vehicles • investments in energy and power infrastructure (e.g., renewable power supply, electric charging services, hydrogen supply and distribution) in key markets, as well as the associated utility costs • the ability of the supply chain to deliver components, including commodities and raw materials that are unique to alternative powertrain commercial vehicles • the success of new and existing competitors in developing and selling alternative powertrain commercial vehicles • litigation or activism by certain regulators, shareholders, environmental groups or other stakeholders.
Changes to other taxes or the adoption of other new tax legislation could affect the Company’s provision for income taxes and related tax assets and liabilities.
Changes to other taxes or the adoption of other new tax legislation could affect the Company’s provision for income taxes and related tax assets and liabilities. 12 ITEM 1B. UNRESOLVE D STAFF COMMENTS. None.
These include standards imposed by the U.S. Environmental Protection Agency (EPA), the European Union, U.S. state regulatory agencies (such as the California Air Resources Board), regulatory agencies in other international markets where the Company operates, and international accords related to climate change including the Paris Agreement.
PACCAR’s operations and products are subject to extensive statutory and regulatory requirements governing greenhouse gas and non-greenhouse gas emissions. These include standards imposed by the U.S. Environmental Protection Agency (EPA), the European Union, U.S. state regulatory agencies (such as the California Air Resources Board), regulatory agencies in other international markets where the Company operates, and international accords.
Even without legislation to reduce greenhouse gas emissions, PACCAR expects to continue to significantly invest in technologies to improve fuel efficiency for its customers, which would also reduce greenhouse gas emissions.
The Company’s product planning is aligned with these statutory and regulatory requirements. Even without legislation to reduce greenhouse gas emissions, PACCAR expects to continue to significantly invest in technologies to improve fuel efficiency for its customers, which would further reduce greenhouse gas emissions.
The ACT regulation, which has been adopted by several states, requires an increasing percentage of medium- and heavy-duty trucks sold into the state to be zero emission. The Company’s product planning is aligned with these statutory and regulatory requirements, and uses a climate change scenario analysis to limit global warming to below 2°C.
California's ACT regulation, which has been adopted by several states, requires an increasing percentage of medium- and heavy-duty trucks sold into the state to be zero emission. CARB's authority to enact the ACT regulations has been revoked by the U.S. Congress and President; however, the revocation, is currently being challenged and the outcome is uncertain.
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The Company believes its current strategies, programs and resources are sufficient to address changes in customer demand in the context of climate change and to meet its emissions reduction targets.
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The Company is deploying AI tools to reduce operational costs and enhance performance for the Company and its customers, including the use of AI in its predictive analytics technology to forecast and implement vehicle service parameters to improve vehicle uptime.
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The Company's business, financial condition and result of operations may eventually be adversely affected if it fails to integrate these rapidly developing technologies in a timely, cost-effective, compliant and responsible manner. Political, Regulatory and Economic Risks Multinational Operations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed5 unchanged
Biggest changeThe Company has not experienced any notable security incidents that would have a material impact on the results of operations and financial condition of the Company. Certain dealers and suppliers have reported they have experienced cyberattacks and those have not caused any material impact to the Company.
Biggest changeThe Company has not experienced any notable security incidents that would have a material impact on the results of operations and financial condition of the Company. Some dealers and suppliers have reported they have experienced cyberattacks and those have not caused any material impact to the Company.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed3 unchanged
Biggest changeThe Company also has 20 parts distribution centers, many sales and service offices, and finance and administrative offices which are operated in owned or leased premises in these and other locations, including a service office in India. Facilities for product testing and research and development are located in the state of Washington and the Netherlands.
Biggest changeThe Company also has 21 parts distribution centers, many sales and service offices, and finance and administrative offices which are operated in owned or leased premises in these and other locations, including an office in India. Facilities for product testing and research and development are located in the state of Washington and the Netherlands.
America Truck 4 1 1 1 3 1 Parts 7 2 2 1 5 3
America Truck 4 1 1 1 3 1 Parts 7 3 2 1 5 3

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS. Refer to Note L – “Commitments and Contingencies” in the Notes to Consolidated Financial Statements (Part II, Item 8) for discussion on litigation matters, which is incorporated by reference herein. ITEM 4. MINE SAF ETY DISCLOSURES. Not applicable. 14 PAR T II
Biggest changeITEM 3. LEGAL PROCEEDINGS. Refer to Note L – “Commitments and Contingencies” in the Notes to Consolidated Financial Statements (Part II, Item 8) for discussion on litigation matters, which is incorporated by reference herein. ITEM 4. MINE SAF ETY DISCLOSURES. Not applicable. 13 PAR T II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

2 edited+0 added−0 removed0 unchanged
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 14 PART II 15 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 15 ITEM 6. [RESERVED] 17 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 18 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 34 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 13 PART II 14 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 14 ITEM 6. [RESERVED] 16 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 17 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 34 ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 35 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 83 ITEM 9A. CONTROLS AND PROCEDURES 83 ITEM 9B. OTHER INFORMATION 83
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 35 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 82 ITEM 9A. CONTROLS AND PROCEDURES 82 ITEM 9B. OTHER INFORMATION 82

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−1 removed2 unchanged
Biggest changeThe 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 “Peer Group Index”) for the last five fiscal years ended December 31, 2024.
Biggest changeSecurities available for future grant are authorized under the following two plans: (i) 12,752,820 shares under the LTI Plan, and (ii) 911,997 shares under the RSDC Plan. 14 Stockholder Return Performance Graph 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 “Peer Group Index”) for the last five fiscal years ended December 31, 2025.
There were 1,392 record holders of the common stock at December 31, 2024. The Company expects to continue paying regular cash dividends, although there is no assurance as to future dividends because they are dependent upon future earnings, capital requirements and financial conditions. Securities Authorized for Issuance Under Equity Compensation Plans.
There were 1,320 record holders of the common stock at December 31, 2025. The Company expects to continue paying regular cash dividends, although there is no assurance as to future dividends because they are dependent upon future earnings, capital requirements and financial conditions. Securities Authorized for Issuance Under Equity Compensation Plans.
The following table provides information as of December 31, 2024 regarding compensation plans under which PACCAR equity securities are authorized for issuance.
The following table provides information as of December 31, 2025 regarding compensation plans under which PACCAR equity securities are authorized for issuance.
Not applicable. (c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers. 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. As of December 31, 2024, the Company has repurchased $110.0 million of shares under this plan.
Not applicable. (c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers. 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. As of December 31, 2025, the Company has repurchased $128.4 million of shares under this plan.
The number of securities to be issued includes those issuable under the PACCAR Inc Long Term Incentive Plan (LTI Plan) and the Restricted Stock and Deferred Compensation Plan for Non-Employee Directors (RSDC Plan). Securities to be issued include 682,514 shares that represent deferred cash awards payable in stock.
The number of securities to be issued includes those issuable under the PACCAR Inc Long Term Incentive Plan (LTI Plan) and the Restricted Stock and Deferred Compensation Plan for Non-Employee Directors (RSDC Plan). Securities to be issued include 314,814 shares that represent deferred cash awards payable in stock.
There were no repurchases made during the fourth quarter of 2024.
There were no repurchases made during the fourth quarter of 2025.
The Peer Group Index includes AGCO Corporation, Caterpillar Inc., Cummins Inc., Daimler Truck Holdings AG (effective January 1, 2022), Deere & Company, Eaton Corporation, Iveco Group N.V. (effective January 1, 2022), Oshkosh Corporation, TRATON SE (effective January 1, 2021), Navistar International Corporation (from 2019 through 2020), Terex Corporation and AB Volvo.
The Peer Group Index includes AGCO Corporation, Caterpillar Inc., Cummins Inc., Daimler Truck Holdings AG (effective January 1, 2022), Deere & Company, Eaton Corporation, Iveco Group N.V. (effective January 1, 2022), Oshkosh Corporation, Terex Corporation, TRATON SE and AB Volvo.
Number of Securities Granted and to be Issued Related to Outstanding Options and Restricted Stock Units Weighted-average Exercise Price of Outstanding Options Securities Available for Future Grant Stock compensation plans approved by stockholders 4,564,123 $ 68.77 14,247,054 All stock compensation plans have been approved by the stockholders.
Number of Securities Granted and to be Issued Related to Outstanding Options and Restricted Stock Units Weighted-average Exercise Price of Outstanding Options Securities Available for Future Grant Stock compensation plans approved by stockholders 3,808,472 $ 78.71 13,664,817 All stock compensation plans have been approved by the stockholders.
The comparison assumes that $100 was invested December 31, 2019, in the Company’s common stock and in the stated indices and assumes reinvestment of dividends. 2019 2020 2021 2022 2023 2024 PACCAR Inc 100 111.74 118.03 138.09 214.05 237.19 S&P 500 Index 100 118.40 152.39 124.79 157.59 197.02 Peer Group Index 100 133.64 162.88 177.56 214.49 260.91 16 (b) Use of Proceeds from Registered Securities.
The comparison assumes that $100 was invested December 31, 2020, in the Company’s common stock and in the stated indices and assumes reinvestment of dividends. 2020 2021 2022 2023 2024 2025 PACCAR Inc 100 105.63 123.58 191.56 212.27 229.33 S&P 500 Index 100 128.71 105.40 133.10 166.40 196.16 Peer Group Index 100 121.88 132.86 160.50 195.23 248.17 15 (b) Use of Proceeds from Registered Securities.
Removed
Securities available for future grant are authorized under the following two plans: (i) 13,321,465 shares under the LTI Plan, and (ii) 925,589 shares under the RSDC Plan. 15 Stockholder Return Performance Graph.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

96 edited+22 added−14 removed34 unchanged
Biggest changeThe major factors for the Parts segment changes in net sales and revenues, cost of sales and revenues and gross margin between 2024 and 2023 are as follows: NET COST OF SALES AND SALES AND GROSS ($ in millions) REVENUES REVENUES MARGIN 2023 $ 6,414.4 $ 4,369.6 $ 2,044.8 Increase (decrease) Aftermarket parts volume 89.8 81.2 8.6 Average aftermarket parts sales prices 161.6 161.6 Average aftermarket parts direct costs 143.9 (143.9 ) Warehouse and other indirect costs 14.2 (14.2 ) Currency translation .6 (4.5 ) 5.1 Total increase 252.0 234.8 17.2 2024 $ 6,666.4 $ 4,604.4 $ 2,062.0 • Aftermarket parts sales volume increased by $89.8 million and related cost of sales increased by $81.2 million, primarily reflecting higher sales volume in all markets except the U.S. and Canada. • Average aftermarket parts sales prices increased sales by $161.6 million, primarily due to price realization in Europe and the U.S. and Canada. • Average aftermarket parts direct costs increased $143.9 million due to higher material costs, primarily in the U.S. and Europe, and higher delivery costs. • Warehouse and other indirect costs increased $14.2 million primarily due to higher salaries and related expenses. • The currency translation effect on sales and cost of sales primarily reflects a decrease in the value of the Brazilian real, Canadian dollar and Australian dollar relative to the U.S. dollar, partially offset by an increase in the value of the euro relative to the U.S. dollar. • Parts gross margin was 30.9% in 2024 compared to 31.9% in 2023 due to the factors noted above.
Biggest changeThe decrease in parts sales and costs reflects lower sales volume, primarily Europe and Mexico. • Average aftermarket parts sales prices increased sales by $307.3 million, primarily due to price realization in the U.S. and Canada as well as tariff cost increases in the U.S. • Average aftermarket parts direct costs increased $213.7 million due to higher material costs and higher tariff costs, primarily in the U.S. • Warehouse and other indirect costs increased $46.1 million, primarily due to higher indirect costs, including depreciation expense. • 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 Canadian dollar relative to the U.S. dollar. • Parts gross margin was 29.9% in 2025 compared to 30.9% in 2024 due to the factors noted above. 21 Parts SG&A expense in 2025 increased to $257.8 million from $246.4 million in 2024.
The higher pro forma percentage of retail loan and lease accounts 30+ days past due in Mexico, Australia, Brasil and other was primarily due to accounts modified in Brasil. A contract modification that improves the past due status reduces the probability of default.
The higher pro forma percentage of retail loan and lease accounts 30+ days past due in Mexico, Australia, Brasil and other was primarily due to accounts modified in Brasil and Mexico. A contract modification that improves the past due status reduces the probability of default.
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. 29 In November 2024, the Company’s U.S. finance subsidiary, PACCAR Financial Corp. (PFC), filed a shelf registration under the Securities Act of 1933.
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 2024, the Company’s U.S. finance subsidiary, PACCAR Financial Corp. (PFC), filed a shelf registration under the Securities Act of 1933.
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 2.5% and 2.9%.
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 2.5% and 2.8%.
There were no borrowings under this program as of December 31, 2024. 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.
There were no borrowings under this program as of December 31, 2025. 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.
The effect of modifications is included in the Company’s historical loss information used to determine the allowance for credit losses. 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, 2024 and 2023.
The effect of modifications is included in the Company’s historical loss information used to determine the allowance for credit losses. 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, 2025 and 2024.
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 80%.
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 90%.
Total cash commitments for borrowings and interest on term debt were $16.98 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.
Total cash commitments for borrowings and interest on term debt were $16.74 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.
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, 2024. 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.
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, 2025. 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 expiration.
The Company continues to focus on maintaining low past due balances. 26 When the Company modifies a 30+ days past due account, the customer is then generally considered current under the revised contractual terms.
The Company continues to focus on maintaining low past due balances. 25 When the Company modifies a 30+ days past due account, the customer is then generally considered current under the revised contractual terms.
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, 2024 2023 Pro forma percentage of retail loan and lease accounts 30+ days past due: U.S. and Canada 1.4 % .8 % Europe .8 % 1.8 % Mexico, Australia, Brasil and other 2.6 % 2.0 % Worldwide 1.6 % 1.2 % The Company typically requires customers to pay current before granting modifications.
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, 2025 2024 Pro forma percentage of retail loan and lease accounts 30+ days past due: U.S. and Canada 2.1 % 1.4 % Europe 1.1 % .8 % Mexico, Australia, Brasil and other 5.8 % 2.6 % Worldwide 2.8 % 1.6 % The Company typically requires customers to pay current before granting modifications.
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.
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; use of artificial intelligence and machine learning in business processes; pandemics; climate-related risks; global conflicts; litigation, including EC settlement-related claims; or legislative and governmental regulations.
The total amount of medium-term notes outstanding for PFPL Australia as of December 31, 2024 was 700.0 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 PFPL Australia as of December 31, 2025 was 900.0 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.
If the 2024 warranty expense had been .2% higher as a percentage of net sales and revenues in 2024, warranty expense would have increased by approximately $63 million. FORWARD-LOOKING STATEMENTS: This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
If the 2025 warranty expense had been .2% higher as a percentage of net sales and revenues in 2025, warranty expense would have increased by approximately $52 million. FORWARD-LOOKING STATEMENTS: This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
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 2024 were $787.3 million compared to $679.4 million in 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 2025 were $714.3 million compared to $787.3 million in 2024.
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 for commodities.
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.
Capital Investments and R&D Outlook PACCAR's excellent long-term profits, strong balance sheet and consistent focus on quality have enabled the Company to invest $8.6 billion in new and expanded facilities, innovative products and new technologies during the past decade.
Capital Investments and R&D Outlook PACCAR's excellent long-term profits, strong balance sheet and consistent focus on quality have enabled the Company to invest $9.2 billion in new and expanded facilities, innovative products and new technologies during the past decade.
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.
This program renews annually and expires in May 2026. 28 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.
A total of 500.0 million Brazilian reais medium-term notes were outstanding as of December 31, 2024.
A total of 500.0 million Brazilian reais medium-term notes were outstanding as of December 31, 2025.
This program is limited to 2.60 billion Brazilian reais and has 1.15 billion Brazilian reais outstanding as of December 31, 2024. The Brazilian subsidiary also established a Letra Financeira (LF) program in May 2024 and the program does not limit the principal amount of debt securities that may be issued under the program.
This program is limited to 2.51 billion Brazilian reais and has 1.03 billion Brazilian reais outstanding as of December 31, 2025. The Brazilian subsidiary also established a Letra Financeira (LF) program in May 2024 and the program does not limit the principal amount of debt securities that may be issued under the program.
Over the past two years, the Company’s year-end 30+ days past due accounts have ranged between 1.0% and 1.3% 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 1 to 25 basis points of receivables.
Over the past two years, the Company’s year-end 30+ days past due accounts have ranged between 1.3% and 2.4% 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 4 to 26 basis points of receivables.
Over the past decade, the Company’s combined investments in worldwide capital projects and R&D totaled $8.48 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.
Over the past decade, the Company’s combined investments in worldwide capital projects and R&D totaled $9.10 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.
At December 31, 2024, 5.57 billion Mexican pesos were available for issuance. In August 2018, the Company’s Australian subsidiary, PACCAR Financial Pty. Ltd. (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.
At December 31, 2025, 6.00 billion Mexican pesos were available for issuance. In August 2018, the Company’s Australian subsidiary, PACCAR Financial Pty. Ltd. (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.
At December 31, 2024, 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 $1.16 billion.
At December 31, 2025, 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 $1.12 billion.
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, 2024 and 2023 were $4.4 million and $3.0 million, respectively.
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, 2025 and 2024 were $1.5 million and $4.4 million, respectively.
Included in these arrangements are $4.00 billion of committed bank facilities, of which $1.50 billion expires in June 2025, $1.25 billion expires in June 2027 and $1.25 billion expires in June 2029. The Company intends to extend or replace these credit facilities on or before expiration to maintain facilities of similar amounts and duration.
Included in these arrangements are $4.00 billion of committed bank facilities, of which $1.50 billion expires in June 2026, $1.25 billion expires in June 2028 and $1.25 billion expires in June 2030. The Company intends to extend or replace these credit facilities on or before expiration to maintain facilities of similar amounts and duration.
If past dues were 100 basis points higher or 2.3% as of December 31, 2024, the Company’s estimate of credit losses would likely have increased by a range of $1 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.
If past dues were 100 basis points higher or 3.4% as of December 31, 2025, the Company’s estimate of credit losses would likely have increased by a range of $7 to $40 million depending on the extent of the past dues, the estimated value of the collateral as compared to amounts owed and general economic factors.
As a percentage of average earning assets, Financial Services SG&A was .8% in 2024 and .8% in 2023.
As a percentage of average earning assets, Financial Services SG&A was .7% in 2025 and .8% in 2024.
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. 19 2024 Compared to 2023: Truck The Company’s Truck segment accounted for 74% of revenues in 2024 compared to 77% in 2023.
Factors for which the Company is unable to specifically quantify the impact include market demand and impact from tariffs, fuel prices, freight tonnage and economic conditions affecting the Company’s results of operations. 2025 Compared to 2024: Truck The Company’s Truck segment accounted for 68% of revenues in 2025 compared to 74% in 2024.
Included in Financial Services, Other assets on the Company’s Consolidated Balance Sheets are used trucks held for sale, net of impairments, of $396.5 million at December 31, 2024 and $309.8 million at December 31, 2023.
Included in Financial Services, Other assets on the Company’s Consolidated Balance Sheets are used trucks held for sale, net of impairments, of $389.4 million at December 31, 2025 and $396.5 million at December 31, 2024.
The effect of currency translation decreased PFS income before income taxes by $8.7 million in 2024, primarily due to a decrease in the value of the Brazilian real and Mexican peso relative to the U.S. dollar.
The effect of currency translation decreased PFS income before income taxes by $13.2 million in 2025, primarily due to a decrease in the value of the Mexican peso and Brazilian real relative to the U.S. dollar.
The post-modification balances of accounts modified during the years ended December 31, 2024 and 2023 are summarized below: 2024 2023 ($ in millions) AMORTIZED COST BASIS % OF TOTAL PORTFOLIO* AMORTIZED COST BASIS % OF TOTAL PORTFOLIO* Commercial $ 441.3 3.1 % $ 200.1 1.5 % Insignificant delay 223.0 1.5 % 232.5 1.7 % Credit 330.2 2.3 % 55.2 .4 % $ 994.5 6.9 % $ 487.8 3.6 % * Amortized cost basis immediately after modification as a percentage of the year-end retail portfolio balance.
The post-modification balances of accounts modified during the years ended December 31, 2025 and 2024 are summarized below: 2025 2024 ($ in millions) AMORTIZED COST BASIS % OF TOTAL PORTFOLIO* AMORTIZED COST BASIS % OF TOTAL PORTFOLIO* Commercial $ 428.2 2.8 % $ 441.3 3.1 % Insignificant delay 395.9 2.5 % 223.0 1.5 % Credit 351.2 2.2 % 330.2 2.3 % $ 1,175.3 7.5 % $ 994.5 6.9 % * Amortized cost basis immediately after modification as a percentage of the year-end retail portfolio balance.
The higher pro forma percentage of retail loan and lease accounts 30+ days past due in the U.S. and Canada at December 31, 2024 was primarily due to a modification with an insignificant term extension granted to one large fleet customer with additional collateral.
The higher pro forma percentage of retail loan and lease accounts 30+ days past due in the U.S. and Canada at December 31, 2025 was primarily due to a modification with an insignificant term extension granted to two large fleet customers in the U.S.
The Company modified $40.7 million and $35.0 million of accounts worldwide during the fourth quarter of 2024 and the fourth quarter of 2023, respectively, which were 30+ days past due and became current at the time of modification.
The Company modified $72.9 million and $40.7 million of accounts worldwide during the fourth quarter of 2025 and the fourth quarter of 2024, respectively, which were 30+ days past due and became current at the time of modification.
The following table summarizes the Company’s 30+ days past due accounts: At December 31, 2024 2023 Percentage of retail loan and lease accounts 30+ days past due: U.S. and Canada 1.2 % .8 % Europe .8 % .5 % Mexico, Australia, Brasil and other 2.0 % 1.9 % Worldwide 1.3 % 1.0 % Accounts 30+ days past due increased to 1.3% at December 31, 2024 from 1.0% at December 31, 2023.
The following table summarizes the Company’s 30+ days past due accounts: At December 31, 2025 2024 Percentage of retail loan and lease accounts 30+ days past due: U.S. and Canada 1.8 % 1.2 % Europe 1.0 % .8 % Mexico, Australia, Brasil and other 4.6 % 2.0 % Worldwide 2.4 % 1.3 % Accounts 30+ days past due increased to 2.4% at December 31, 2025 from 1.3% at December 31, 2024, primarily due to higher past due accounts in Brasil, the U.S. and Mexico.
Cash dividends declared for the last two years were as follows: QUARTER 2024 2023 First $ .27 $ .25 Second .30 .25 Third .30 .27 Fourth .30 .27 Year-End Extra (paid in January of the following year) 3.00 3.20 Total dividends declared per share $ 4.17 $ 4.24 Credit Lines and Other: The Company has line of credit arrangements of $5.48 billion, of which $4.96 billion were unused at December 31, 2024.
Cash dividends declared for the last two years were as follows: QUARTER 2025 2024 First $ .33 $ .27 Second .33 .30 Third .33 .30 Fourth .33 .30 Year-End Extra (paid in January of the following year) 1.40 3.00 Total dividends declared per share $ 2.72 $ 4.17 Credit Lines and Other: The Company has line of credit arrangements of $5.64 billion, of which $5.28 billion were unused at December 31, 2025.
In addition to the capital and R&D investments, the Company expects to invest another $400 to $700 million in its battery joint venture, Amplify Cell Technologies. Financial Services The Company funds its financial services activities primarily from collections on existing finance receivables and borrowings in the capital markets.
In addition to the capital and R&D investments, the Company expects to continue investing in its U.S.-based battery joint venture, Amplify Cell Technologies. Financial Services The Company funds its financial services activities primarily from collections on existing finance receivables and borrowings in the capital markets.
As of December 31, 2024, the Company’s European finance subsidiary, PACCAR Financial Europe, had €597.9 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 July 2025.
As of December 31, 2025, the Company’s European finance subsidiary, PACCAR Financial Europe, had €750.0 million available for issuance under a €2.50 billion medium-term note program listed on the Euro MTF Market of the Luxembourg Stock Exchange.
The total amount of medium-term notes outstanding for PFC as of December 31, 2024 was $7.25 billion. The registration expires in November 2027 and does not limit the principal amount of debt securities that may be issued during that period.
In February 2026, the Company issued $400.0 million of medium-term notes under this registration. The total amount of medium-term notes outstanding for PFC as of December 31, 2025 was $7.70 billion. The registration expires in November 2027 and does not limit the principal amount of debt securities that may be issued during that period.
The objective of the repurchase plan is to return value to PACCAR shareholders. As of December 31, 2024, 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, 2024.
The objective of the repurchase plan is to return value to PACCAR shareholders. As of December 31, 2025, the Company has repurchased $128.4 million shares under this plan. There were no repurchases made during the fourth quarter of 2025.
($ in millions) Year Ended December 31, 2024 2023 % CHANGE Parts net sales and revenues: U.S. and Canada $ 4,547.5 $ 4,441.7 2 Europe 1,424.3 1,357.0 5 Mexico, South America, Australia and other 694.6 615.7 13 $ 6,666.4 $ 6,414.4 4 Parts income before income taxes $ 1,704.5 $ 1,702.6 Pre-tax return on revenues 25.6 % 26.5 % The Company’s worldwide parts net sales and revenues increased to $6.67 billion in 2024 from $6.41 billion in 2023 primarily due to higher sales in all markets.
($ in millions) Year Ended December 31, 2025 2024 % CHANGE Parts net sales and revenues: U.S. and Canada $ 4,748.8 $ 4,547.5 4 Europe 1,442.0 1,424.3 1 Mexico, South America, Australia and other 682.9 694.6 (2 ) $ 6,873.7 $ 6,666.4 3 Parts income before income taxes $ 1,668.0 $ 1,704.5 (2 ) Pre-tax return on revenues 24.3 % 25.6 % The Company’s worldwide parts net sales and revenues increased to $6.87 billion in 2025 from $6.67 billion in 2024 primarily due to higher sales in the U.S. and Canada and Europe.
The major factors for the changes in interest and fees, interest and other borrowing expenses and finance margin between 2024 and 2023 are outlined below: ($ in millions) INTEREST AND FEES INTEREST AND OTHER BORROWING EXPENSES FINANCE MARGIN 2023 $ 1,009.3 $ 500.6 $ 508.7 Increase (decrease) Average finance receivables 208.9 208.9 Average debt balances 107.9 (107.9 ) Yields 96.7 96.7 Borrowing rates 113.1 (113.1 ) Currency translation and other (19.0 ) (10.8 ) (8.2 ) Total increase 286.6 210.2 76.4 2024 $ 1,295.9 $ 710.8 $ 585.1 • Average finance receivables increased $2.84 billion (excluding foreign exchange effects), increasing interest and fees by $208.9 million in 2024, primarily due to higher average loan, finance lease and dealer wholesale balances in the U.S. and Canada, Mexico and Brasil. • Average debt balances increased $2.25 billion (excluding foreign exchange effects), increasing interest and other borrowing costs by $107.9 million in 2024, reflecting higher funding requirements for portfolio growth in loans, finance leases and dealer wholesale receivables. • Higher portfolio yields (7.3% in 2024 compared to 6.7% in 2023) increased interest and fees by $96.7 million.
The major factors for the changes in interest and fees, interest and other borrowing expenses and finance margin between 2025 and 2024 are outlined below: ($ in millions) INTEREST AND FEES INTEREST AND OTHER BORROWING EXPENSES FINANCE MARGIN 2024 $ 1,295.9 $ 710.8 $ 585.1 Increase (decrease) Average finance receivables 120.3 120.3 Average debt balances 48.5 (48.5 ) Yields 28.9 28.9 Borrowing rates 31.7 (31.7 ) Currency translation and other (16.4 ) (8.0 ) (8.4 ) Total increase 132.8 72.2 60.6 2025 $ 1,428.7 $ 783.0 $ 645.7 • Average finance receivables increased $1.60 billion (excluding foreign exchange effects), increasing interest and fees by $120.3 million in 2025, primarily due to higher average loan, finance lease and dealer wholesale balances in the U.S. and Canada, Brasil and Mexico. • Average debt balances increased $879.3 million (excluding foreign exchange effects), increasing interest and other borrowing costs by $48.5 million in 2025, reflecting higher funding requirements for portfolio growth in loans, finance leases and dealer wholesale receivables. • Higher portfolio yields (7.4% in 2025 compared to 7.3% in 2024) increased interest and fees by $28.9 million.
The Company may modify loans and finance leases for commercial reasons or for credit reasons. Modifications for commercial reasons are changes to contract terms for customers that are not considered to be in financial difficulty. Insignificant delays are modifications extending terms up to three months for customers experiencing some short-term financial stress, but not considered to be in financial difficulty.
Insignificant delays are modifications extending terms up to three months for customers experiencing some short-term financial stress but not considered to be in financial difficulty. Modifications for credit reasons are changes to contract terms for customers considered to be in financial difficulty.
The change in cash and cash equivalents is summarized below: ($ in millions) Year Ended December 31, 2024 2023 Operating activities: Net income $ 4,162.0 $ 4,600.8 Net income items not affecting cash 939.5 698.0 Pension contributions (40.8 ) (27.3 ) Changes in operating assets and liabilities, net (419.8 ) (1,081.5 ) Net cash provided by operating activities 4,640.9 4,190.0 Net cash used in investing activities (4,487.3 ) (2,871.0 ) Net cash (used in) provided by financing activities (123.1 ) 1,102.2 Effect of exchange rate changes on cash and cash equivalents (151.4 ) 69.6 Net (decrease) increase in cash and cash equivalents (120.9 ) 2,490.8 Cash and cash equivalents at beginning of period 7,181.7 4,690.9 Cash and cash equivalents at end of period $ 7,060.8 $ 7,181.7 Operating activities: Cash provided by operations increased by $450.9 million to $4.64 billion in 2024 from $4.19 billion in 2023.
The change in cash and cash equivalents is summarized below: ($ in millions) Year Ended December 31, 2025 2024 Operating activities: Net income $ 2,375.8 $ 4,162.0 Net income items not affecting cash 1,345.7 939.5 Pension contributions (24.5 ) (40.8 ) Changes in operating assets and liabilities, net 718.8 (419.8 ) Net cash provided by operating activities 4,415.8 4,640.9 Net cash used in investing activities (2,267.2 ) (4,487.3 ) Net cash used in financing activities (3,082.4 ) (123.1 ) Effect of exchange rate changes on cash and cash equivalents 180.9 (151.4 ) Net decrease in cash and cash equivalents (752.9 ) (120.9 ) Cash and cash equivalents at beginning of period 7,060.8 7,181.7 Cash and cash equivalents at end of period $ 6,307.9 $ 7,060.8 Operating activities: Cash provided by operations decreased by $225.1 million to $4.42 billion in 2025 from $4.64 billion in 2024.
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 $46.3 million in 2025, $20.5 million in 2026, $19.4 million in 2027, $16.4 million in 2028, and $13.2 million in 2029 and thereafter.
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 $31.5 million in 2026, $21.8 million in 2027, $29.6 million in 2028, $22.0 million in 2029, and $6.8 million in 2030 and thereafter.
RESULTS OF OPERATIONS: The Company’s results of operations for the years ended December 31, 2024 and 2023 are presented below. For information on the year ended December 31, 2022, refer to Part II, Item 7 in the 2023 Annual Report on Form 10-K.
For information on the year ended December 31, 2023, refer to Part II, Item 7 in the 2024 Annual Report on Form 10-K.
The effects of currency translation decreased PFS revenues by $23.5 million in 2024, primarily due to a decrease in the value of foreign currencies relative to the U.S. dollar, primarily the Brazilian real and Mexican peso.
The effects of currency translation decreased PFS revenues by $9.9 million in 2025, primarily due to a decrease in the value of the Mexican peso and Brazilian real relative to the U.S. dollar, partially offset by an increase in the value of the euro relative to the U.S. dollar.
The higher portfolio yields were primarily due to higher market rates in all markets except Brasil. • Higher borrowing rates (4.7% in 2024 compared to 3.9% in 2023) increased interest and other borrowing expenses by $113.1 million and were primarily due to higher debt market rates in all markets except Brasil. • The currency translation effects reflect a decrease in the value of foreign currencies relative to the U.S. dollar, primarily the Brazilian real and Mexican peso. 24 The following table summarizes operating lease, rental and other revenues and depreciation and other expenses: ($ in millions) Year Ended December 31, 2024 2023 Operating lease and rental revenues $ 677.4 $ 751.8 Used truck sales 95.1 23.0 Insurance, franchise and other revenues 31.1 27.8 Operating lease, rental and other revenues $ 803.6 $ 802.6 Depreciation of operating lease equipment $ 544.7 $ 488.6 Vehicle operating expenses 67.8 73.1 Cost of used truck sales 98.1 24.1 Insurance, franchise and other expenses 7.9 4.9 Depreciation and other expenses $ 718.5 $ 590.7 The major factors for the changes in operating lease, rental and other revenues, depreciation and other expenses and lease margin between 2024 and 2023 are outlined below: ($ in millions) OPERATING LEASE, RENTAL AND OTHER REVENUES DEPRECIATION AND OTHER EXPENSES LEASE MARGIN 2023 $ 802.6 $ 590.7 $ 211.9 Increase (decrease) Used truck sales 72.2 74.0 (1.8 ) Results on returned lease assets 99.7 (99.7 ) Average operating lease assets (148.2 ) (132.1 ) (16.1 ) Revenue and cost per asset 78.2 85.1 (6.9 ) Currency translation and other (1.2 ) 1.1 (2.3 ) Total increase (decrease) 1.0 127.8 (126.8 ) 2024 $ 803.6 $ 718.5 $ 85.1 • Higher sales volume, partially offset by lower market prices of used truck on trade, increased revenues by $72.2 million and related depreciation and other expenses by $74.0 million. • Results on returned lease assets increased depreciation and other expenses by $99.7 million, primarily due to losses on sale of returned lease units in 2024 (compared to gains in 2023) and impairment on existing used truck inventories, mainly in Europe, as a result of lower used truck market values. • Average operating lease assets decreased $365.9 million (excluding foreign exchange effects), which decreased revenues by $148.2 million and related depreciation and other expenses by $132.1 million. • Revenue per asset increased $78.2 million primarily due to higher average truck values financed.
The higher portfolio yields were primarily due to higher market rates on new portfolio assets, primarily in the U.S. and Brasil. • Higher borrowing rates (5.1% in 2025 compared to 4.7% in 2024) increased interest and other borrowing expenses by $31.7 million and were primarily due to higher debt market rates in all markets except Canada. • The currency translation effects reflect a decrease in the value of foreign currencies relative to the U.S. dollar, primarily the Mexican peso and Brazilian real. 23 The following table summarizes operating lease, rental and other revenues and depreciation and other expenses: ($ in millions) Year Ended December 31, 2025 2024 Operating lease and rental revenues $ 638.4 $ 677.4 Used truck sales 106.8 95.1 Insurance, franchise and other revenues 35.8 31.1 Operating lease, rental and other revenues $ 781.0 $ 803.6 Depreciation of operating lease equipment $ 470.0 $ 544.7 Vehicle operating expenses 71.3 67.8 Cost of used truck sales 109.3 98.1 Insurance, franchise and other expenses 7.0 7.9 Depreciation and other expenses $ 657.6 $ 718.5 The major factors for the changes in operating lease, rental and other revenues, depreciation and other expenses and lease margin between 2025 and 2024 are outlined below: ($ in millions) OPERATING LEASE, RENTAL AND OTHER REVENUES DEPRECIATION AND OTHER EXPENSES LEASE MARGIN 2024 $ 803.6 $ 718.5 $ 85.1 Increase (decrease) Used truck sales 6.8 6.3 .5 Results on returned lease assets (18.5 ) 18.5 Average operating lease assets (106.2 ) (87.9 ) (18.3 ) Revenue and cost per asset 65.9 28.5 37.4 Currency translation and other 10.9 10.7 .2 Total (decrease) increase (22.6 ) (60.9 ) 38.3 2025 $ 781.0 $ 657.6 $ 123.4 • Used truck sales from used trucks received on trade increased revenues by $6.8 million and increased related depreciation and other expenses by $6.3 million, primarily reflecting improved used truck market prices. • Results on returned lease assets decreased depreciation and other expenses by $18.5 million, primarily due to lower losses on sale of returned lease units in 2025 and lower impairment on existing used truck inventories. • Average operating lease assets decreased $221.0 million (excluding foreign exchange effects), which decreased revenues by $106.2 million and related depreciation and other expenses by $87.9 million. • Revenue per asset increased $65.9 million primarily due to higher average truck values financed.
In 2024, industry retail sales in the heavy-duty market in the U.S. and Canada decreased to 268,100 units from 297,000 units in 2023. The Company’s heavy-duty truck retail market share was 30.7% in 2024 compared to 29.5% in 2023. The medium-duty market was 110,400 units in 2024 compared to 105,300 units in 2023.
In 2025, industry retail sales in the heavy-duty market in the U.S. and Canada was 232,800 units compared to 268,100 units in 2024. The Company’s heavy-duty truck retail market share was 29.9% in 2025 compared to 30.7% in 2024. The medium-duty market was 88,400 units in 2025 compared to 110,400 units in 2024.
Other income before tax was $13.5 million in 2024 compared to a loss of $616.8 million in 2023, primarily due to the EC-related charge in the first quarter 2023 which is discussed in Note L of the consolidated financial statements.
Other SG&A decreased to $81.1 million in 2025 from $84.4 million in 2024, primarily due to lower salaries and related expenses. Other loss before tax was $346.8 million in 2025 compared to income of $13.5 million in 2024, primarily due to the EC-related charge in the first quarter 2025 which is discussed in Note L of the consolidated financial statements.
The Company’s medium-duty market share was 18.0% in 2024 compared to 14.5% in 2023. The over 16‑tonne truck market in Europe in 2024 decreased to 316,100 units from 343,300 units in 2023, and DAF’s market share was 14.4% in 2024 compared to 15.6% in 2023. The 6 to 16‑tonne market was 50,900 units in 2024 and 46,800 units in 2023.
The Company’s medium-duty market share was 15.9% in 2025 compared to 18.0% in 2024. 19 The over 16-tonne truck market in Europe in 2025 decreased to 297,000 units from 316,100 units in 2024, and DAF’s market share was 13.5% in 2025 compared to 14.4% in 2024.
LIQUIDITY AND CAPITAL RESOURCES: ($ in millions) At December 31, 2024 2023 Cash and cash equivalents $ 7,060.8 $ 7,181.7 Marketable securities 2,778.8 1,822.6 $ 9,839.6 $ 9,004.3 The Company’s total cash and marketable securities at December 31, 2024 increased $835.3 million from the balances at December 31, 2023.
LIQUIDITY AND CAPITAL RESOURCES: ($ in millions) At December 31, 2025 2024 Cash and cash equivalents $ 6,307.9 $ 7,060.8 Marketable securities 3,207.7 2,778.8 $ 9,515.6 $ 9,839.6 The Company’s total cash and marketable securities at December 31, 2025 decreased $324.0 million from the balances at December 31, 2024.
($ in millions, except per share amounts) Year Ended December 31, 2024 2023 Net sales and revenues: Truck $ 24,838.4 $ 26,846.4 Parts 6,666.4 6,414.4 Other 59.5 54.7 Truck, Parts and Other 31,564.3 33,315.5 Financial Services 2,099.5 1,811.9 $ 33,663.8 $ 35,127.4 Income before income taxes: Truck $ 2,852.6 $ 3,799.9 Parts 1,704.5 1,702.6 Other* 13.5 (616.8 ) Truck, Parts and Other 4,570.6 4,885.7 Financial Services 435.6 540.3 Investment income 394.7 292.2 Income taxes (1,238.9 ) (1,117.4 ) Net income $ 4,162.0 $ 4,600.8 Diluted earnings per share $ 7.90 $ 8.76 After-tax return on revenues 12.4 % 13.1 % * In 2023, Other includes a $600.0 million non-recurring charge related to civil litigation in Europe (EC-related claims) in the first quarter 2023.
($ in millions, except per share amounts) Year Ended December 31, 2025 2024 Net sales and revenues: Truck $ 19,365.3 $ 24,838.4 Parts 6,873.7 6,666.4 Other (3.9 ) 59.5 Truck, Parts and Other 26,235.1 31,564.3 Financial Services 2,209.7 2,099.5 $ 28,444.8 $ 33,663.8 Income before income taxes: Truck $ 870.8 $ 2,852.6 Parts 1,668.0 1,704.5 Other* (346.8 ) 13.5 Truck, Parts and Other 2,192.0 4,570.6 Financial Services 485.4 435.6 Investment income 346.1 394.7 Income taxes (647.7 ) (1,238.9 ) Net income $ 2,375.8 $ 4,162.0 Diluted earnings per share $ 4.51 $ 7.90 After-tax return on revenues 8.4 % 12.4 % * In 2025, Other includes a $350.0 million charge related to civil litigation in Europe (EC-related claims) in the first quarter 2025.
The used truck market has normalized in North America, but remains soft in Europe. If freight transportation conditions decline due to a weaker economy, then past due accounts, truck repossessions and credit losses would likely increase from the current levels and new business volume would likely decline.
If freight transportation conditions decline due to a weaker economy, then past due accounts, truck repossessions and credit losses would likely increase from the current levels and new business volume and average earning assets would likely decline.
As a percentage of sales, Parts SG&A was 3.7% in 2024 and 3.7% in 2023. 22 Financial Services The Company’s Financial Services segment accounted for 6% of revenues in 2024 compared to 5% in 2023.
The increase was primarily due to higher salaries and related expenses. As a percentage of sales, Parts SG&A was 3.8% in 2025 and 3.7% in 2024. Financial Services The Company’s Financial Services segment accounted for 8% of revenues in 2025 compared to 6% in 2024.
($ in millions) Year Ended December 31, 2024 2023 Domestic income before taxes $ 3,525.1 $ 3,913.7 Foreign income before taxes 1,875.8 1,804.5 Total income before taxes $ 5,400.9 $ 5,718.2 Domestic pre-tax return on revenues 18.5 % 20.4 % Foreign pre-tax return on revenues 12.8 % 11.3 % Total pre-tax return on revenues 16.0 % 16.3 % 27 In 2024, domestic income before income taxes and domestic pre-tax return on revenues decreased primarily due to lower Truck operation results.
($ in millions) Year Ended December 31, 2025 2024 Domestic income before taxes $ 2,095.6 $ 3,525.1 Foreign income before taxes 927.9 1,875.8 Total income before taxes $ 3,023.5 $ 5,400.9 Domestic pre-tax return on revenues 13.3 % 18.5 % Foreign pre-tax return on revenues 7.3 % 12.8 % Total pre-tax return on revenues 10.6 % 16.0 % 26 In 2025, domestic income before income taxes decreased primarily due to lower Truck operation results, which also reduced domestic pre-tax return on revenues.
The Company’s worldwide truck net sales and revenues are summarized below: ($ in millions) Year Ended December 31, 2024 2023 % CHANGE Truck net sales and revenues: U.S. and Canada $ 15,386.1 $ 15,898.5 (3 ) Europe 4,998.2 6,871.3 (27 ) Mexico, South America, Australia and other 4,454.1 4,076.6 9 $ 24,838.4 $ 26,846.4 (7 ) Truck income before income taxes $ 2,852.6 $ 3,799.9 (25 ) Pre-tax return on revenues 11.5 % 14.2 % The Company’s worldwide truck net sales and revenues decreased to $24.84 billion in 2024 from $26.85 billion in 2023 primarily due to lower truck deliveries in Europe.
The Company’s worldwide truck net sales and revenues are summarized below: ($ in millions) Year Ended December 31, 2025 2024 % CHANGE Truck net sales and revenues: U.S. and Canada $ 11,354.1 $ 15,386.1 (26 ) Europe 4,971.4 4,998.2 (1 ) Mexico, South America, Australia and other 3,039.8 4,454.1 (32 ) $ 19,365.3 $ 24,838.4 (22 ) Truck income before income taxes $ 870.8 $ 2,852.6 (69 ) Pre-tax return on revenues 4.5 % 11.5 % The Company’s worldwide truck net sales and revenues decreased to $19.37 billion in 2025 from $24.84 billion in 2024 primarily due to lower truck unit deliveries in all major markets from lower retail demand.
The following table summarizes the provision for losses on receivables and net charge-offs: 2024 2023 ($ in millions) PROVISION FOR LOSSES ON RECEIVABLES NET CHARGE- OFFS PROVISION FOR LOSSES ON RECEIVABLES NET CHARGE- OFFS U.S. and Canada $ 42.5 $ 29.4 $ 7.9 $ 8.6 Europe 16.8 15.8 4.4 2.9 Mexico, Australia, Brasil and other 16.3 8.3 19.0 11.8 $ 75.6 $ 53.5 $ 31.3 $ 23.3 25 The provision for losses on receivables increased to $75.6 million in 2024 from $31.3 million in 2023, primarily driven by portfolio growth, an increase in the Company’s 30+ past due accounts and higher charge-offs in the U.S. and Canada and Europe.
The following table summarizes the provision for losses on receivables and net charge-offs: 2025 2024 ($ in millions) PROVISION FOR LOSSES ON RECEIVABLES NET CHARGE- OFFS PROVISION FOR LOSSES ON RECEIVABLES NET CHARGE- OFFS U.S. and Canada $ 57.4 $ 48.2 $ 42.5 $ 29.4 Europe 9.1 10.3 16.8 15.8 Mexico, Australia, Brasil and other 58.0 26.5 16.3 8.3 $ 124.5 $ 85.0 $ 75.6 $ 53.5 24 The provision for losses on receivables increased to $124.5 million in 2025 from $75.6 million in 2024, primarily due to a higher provision in Brasil and the U.S., reflecting an increase in 30+ days past due accounts and growth in retail portfolios.
In 2023, an increase in the value of foreign currencies relative to the U.S. dollar, primarily the euro, Mexican peso and Australian dollar, increased cash and cash equivalents by $69.6 million. 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.
In 2024, the effect of exchange rate changes on cash decreased cash and cash equivalents by $151.4 million, reflecting a decrease in the value of foreign currencies relative to the U.S. dollar, primarily the euro, Mexican peso and Brazilian real. 27 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.
The increase in cost of sales by $106.3 million reflects higher costs from extended warranty, R&M contracts, dealer support services and lower used truck results. • The currency translation effect on sales and cost of sales primarily reflects a decline in the value of the Brazilian real, Canadian dollar, Mexican peso and Australian dollar relative to the U.S. dollar, partially offset by the increase in value of the euro relative to the U.S. dollar. • Truck gross margin was 13.9% in 2024 compared to 16.4% in 2023 due to the factors noted above.
The increase in cost of sales of $80.0 million reflects the higher warranty and R&M contracts and higher used truck costs, primarily in Europe. 20 • 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 the decrease in value of the Brazilian real, Canadian dollar and Australian dollar relative to the U.S. dollar. • Truck gross margin was 7.5% in 2025 compared to 13.9% in 2024 due to the factors noted above.
During 2024, market values on equipment returning upon operating lease maturity were generally lower than the residual values on the equipment, resulting in an increase in depreciation expense of $22.7 million.
During 2025, market values on equipment returning upon operating lease maturity were generally lower than the residual values on the equipment in Europe and higher in Mexico, the U.S. and Australia, resulting in an increase in depreciation expense of $16.2 million.
The increased operating cash flow reflects lower net income of $438.8 million, $241.5 million higher cash provided from net income items not affecting cash, primarily deferred income taxes and the provision for losses on financial services receivables, and lower cash usage from net changes in operating assets and liabilities of $661.7 million.
The decreased operating cash flow reflects lower net income of $1,786.2 million, partially offset by $406.2 million higher cash provided from net income items not affecting cash, primarily deferred income taxes and the provision for losses on financial services receivables, and higher cash provided from net changes in operating assets and liabilities of $1,138.6 million.
The Company’s other commitments include the following at December 31, 2024: COMMITMENT EXPIRATION ($ in millions) WITHIN 1 YEAR 1-3 YEARS 3-5 YEARS MORE THAN 5 YEARS TOTAL Loan and lease commitments $ 949.3 $ 949.3 Residual value guarantees 306.6 $ 237.9 $ 74.9 $ 12.8 632.2 Letters of credit 10.5 .2 13.0 23.7 $ 1,266.4 $ 237.9 $ 75.1 $ 25.8 $ 1,605.2 Loan and lease commitments are for funding new retail loan and lease contracts.
Other obligations primarily include commitments for commodities. 29 The Company’s other commitments include the following at December 31, 2025: COMMITMENT EXPIRATION ($ in millions) WITHIN 1 YEAR 1-3 YEARS 3-5 YEARS MORE THAN 5 YEARS TOTAL Loan and lease commitments $ 812.4 $ 812.4 Residual value guarantees 289.7 $ 303.9 $ 70.4 $ 10.1 674.1 Letters of credit 9.8 4.3 .4 15.0 29.5 $ 1,111.9 $ 308.2 $ 70.8 $ 25.1 $ 1,516.0 Loan and lease commitments are for funding new retail loan and lease contracts.
DAF’s market share in the 6 to 16-tonne market in 2024 was 9.5% compared to 9.1% in 2023. The over 16‑tonne truck market in Brasil in 2024 increased to 97,700 units from 82,100 units in 2023, and DAF Brasil's market share was 9.9% in 2024 compared to 10.2% in 2023.
The over 16-tonne truck market in Brasil in 2025 was 86,700 units compared to 97,700 units in 2024, and DAF Brasil's market share was 8.6% in 2025 compared to 9.9% in 2024.
The Company’s new truck deliveries are summarized below: Year Ended December 31, 2024 2023 % CHANGE U.S. and Canada 106,400 109,100 (2 ) Europe 45,400 63,200 (28 ) Mexico, South America, Australia and other 33,500 31,900 5 Total units 185,300 204,200 (9 ) Worldwide new truck deliveries decreased in 2024 compared to 2023, primarily due to lower deliveries in Europe.
The Company’s new truck deliveries are summarized below: Year Ended December 31, 2025 2024 % CHANGE U.S. and Canada 77,300 106,400 (27 ) Europe 43,800 45,400 (4 ) Mexico, South America, Australia and other 23,100 33,500 (31 ) Total units 144,200 185,300 (22 ) Worldwide new truck deliveries decreased in 2025 compared to 2024, reflecting lower retail demand in all major markets.
The net changes in operating assets and liabilities are mainly due to higher cash provided by net changes in operating assets, primarily wholesale receivables on new trucks in the Financial Services segment of $787.7 million, trade and other receivables of $587.6 million and lower cash usage of $393.2 million for inventories, partially offset by decrease in accruals of $1,084.7 million, including the EC-related charge and product support liabilities.
The net changes in operating assets and liabilities are mainly due to higher cash provided by wholesale receivables on new trucks in the Financial Services segment of $1,485.8 million and lower cash usage of $253.9 million for inventories, partially offset by decrease in accounts payable and accruals of $712.0 million.
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’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.
Investing activities: Cash used in investing activities increased by $1.62 billion to $4.49 billion in 2024 from $2.87 billion in 2023.
Investing activities: Cash used in investing activities decreased by $2.22 billion to $2.27 billion in 2025 from $4.49 billion in 2024.
The effect of currency translation decreased new loan and lease volume by $85.7 million, primarily due to a decrease in the value of the Brazilian real and Mexican peso relative to the U.S. dollar.
The effect of currency translation decreased new loan and lease volume by $28.3 million, primarily due to a decrease in the value of the Mexican peso and Brazilian real relative to the U.S. dollar, partially offset by an increase in the value of the euro relative to the U.S. dollar. 22 PFS revenues increased to $2.21 billion in 2025 from $2.10 billion in 2024.
The Company recognized losses on used trucks, excluding repossessions, of $59.0 million in 2024 compared to gains of $43.5 million in 2023, including $40.3 million of losses on multiple unit transactions in 2024 compared to $12.3 million in 2023.
The Company recognized losses on used trucks, excluding repossessions, of $38.8 million in 2025 compared to $59.0 million in 2024, including $35.5 million of losses on multiple unit transactions in 2025 compared to $40.3 million in 2024. Used truck losses related to repossessions, which are recognized as credit losses, were $11.5 million in 2025 and $9.8 million in 2024.
At December 31, 2024, 30+ days past dues were 1.3%.
At December 31, 2025, 30+ days past dues were 2.4%.
In such circumstances, the Company would be exposed to liquidity risk to the degree that the timing of debt maturities differs from the timing of receivable collections from customers.
In such circumstances, the Company would be exposed to liquidity risk to the degree that the timing of debt maturities differs from the timing of receivable collections from customers. The Company believes its various sources of liquidity, including committed bank facilities, would continue to provide it with sufficient funding resources to service its maturing debt obligations.
($ in millions) Year Ended December 31, 2024 2023 % CHANGE New loan and lease volume: U.S. and Canada $ 3,961.4 $ 3,662.3 8 Europe 1,325.1 1,586.6 (16 ) Mexico, Australia, Brasil and other 2,213.3 1,956.4 13 $ 7,499.8 $ 7,205.3 4 New loan and lease volume by product: Loans and finance leases $ 6,585.2 $ 6,538.6 1 Equipment on operating lease 914.6 666.7 37 $ 7,499.8 $ 7,205.3 4 New loan and lease unit volume: Loans and finance leases 46,600 47,200 (1 ) Equipment on operating lease 7,750 7,200 8 54,350 54,400 Average earning assets: U.S. and Canada $ 11,196.9 $ 9,478.5 18 Europe 4,182.9 4,465.9 (6 ) Mexico, Australia, Brasil and other 4,514.9 3,596.5 26 $ 19,894.7 $ 17,540.9 13 Average earning assets by product: Loans and finance leases $ 13,735.6 $ 11,903.3 15 Dealer wholesale financing 3,988.2 3,100.2 29 Equipment on lease and other 2,170.9 2,537.4 (14 ) $ 19,894.7 $ 17,540.9 13 Revenues: U.S. and Canada $ 894.2 $ 759.7 18 Europe 577.9 555.7 4 Mexico, Australia, Brasil and other 627.4 496.5 26 $ 2,099.5 $ 1,811.9 16 Revenues by product: Loans and finance leases $ 981.3 $ 766.3 28 Dealer wholesale financing 314.6 243.0 29 Equipment on lease and other 803.6 802.6 $ 2,099.5 $ 1,811.9 16 Income before income taxes $ 435.6 $ 540.3 (19 ) New loan and lease volume increased to a record $7.50 billion in 2024 from $7.21 billion in 2023.
($ in millions) Year Ended December 31, 2025 2024 % CHANGE New loan and lease volume: U.S. and Canada $ 3,801.8 $ 3,961.4 (4 ) Europe 1,280.2 1,325.1 (3 ) Mexico, Australia, Brasil and other 1,794.2 2,213.3 (19 ) $ 6,876.2 $ 7,499.8 (8 ) New loan and lease volume by product: Loans and finance leases $ 6,211.1 $ 6,585.2 (6 ) Equipment on operating lease 665.1 914.6 (27 ) $ 6,876.2 $ 7,499.8 (8 ) New loan and lease unit volume: Loans and finance leases 42,550 46,600 (9 ) Equipment on operating lease 6,010 7,750 (22 ) 48,560 54,350 (11 ) Average earning assets: U.S. and Canada $ 12,219.7 $ 11,196.9 9 Europe 4,049.8 4,182.9 (3 ) Mexico, Australia, Brasil and other 4,986.2 4,514.9 10 $ 21,255.7 $ 19,894.7 7 Average earning assets by product: Loans and finance leases $ 15,057.7 $ 13,735.6 10 Dealer wholesale financing 4,207.9 3,988.2 6 Equipment on lease and other 1,990.1 2,170.9 (8 ) $ 21,255.7 $ 19,894.7 7 Revenues: U.S. and Canada $ 922.3 $ 894.2 3 Europe 567.8 577.9 (2 ) Mexico, Australia, Brasil and other 719.6 627.4 15 $ 2,209.7 $ 2,099.5 5 Revenues by product: Loans and finance leases $ 1,128.8 $ 981.3 15 Dealer wholesale financing 299.9 314.6 (5 ) Equipment on lease and other 781.0 803.6 (3 ) $ 2,209.7 $ 2,099.5 5 Income before income taxes $ 485.4 $ 435.6 11 New loan and lease volume was $6.88 billion in 2025 compared to $7.50 billion in 2024.
Truck segment income before income taxes and pre-tax return on revenues decreased primarily due to lower truck unit deliveries in Europe and the U.S. and Canada, partially offset by higher truck unit deliveries in Mexico and South America. 20 The major factors for the Truck segment changes in net sales and revenues, cost of sales and revenues and gross margin between 2024 and 2023 are as follows: NET COST OF SALES AND SALES AND GROSS ($ in millions) REVENUES REVENUES MARGIN 2023 $ 26,846.4 $ 22,440.6 $ 4,405.8 (Decrease) increase Truck sales volume (2,107.6 ) (1,650.0 ) (457.6 ) Average truck sales prices 155.6 155.6 Average material, labor and other direct costs 557.1 (557.1 ) Factory overhead and other indirect costs 18.6 (18.6 ) Extended warranties, operating leases and other 61.5 106.3 (44.8 ) Currency translation (117.5 ) (82.8 ) (34.7 ) Total decrease (2,008.0 ) (1,050.8 ) (957.2 ) 2024 $ 24,838.4 $ 21,389.8 $ 3,448.6 • Truck sales volume decreased revenues by $2,107.6 million and costs by $1,650.0 million, primarily reflecting lower truck deliveries in Europe and the U.S. and Canada, partially offset by higher truck deliveries in Mexico and Brasil. • Average truck sales prices increased sales by $155.6 million from modest price realization, primarily in the U.S. and Canada, Mexico and Australia. • Average cost per truck increased cost of sales by $557.1 million, primarily reflecting higher raw material and labor costs, partially offset by lower warranty costs. • Factory overhead and other indirect costs increased $18.6 million, primarily due to higher labor costs, primarily offset by lower utilities costs and factory supplies. • Extended warranties, operating leases and other increased revenues by $61.5 million primarily due to higher volume of repair and maintenance (R&M) contracts, extended warranty and dealer support services.
The major factors for the Truck segment changes in net sales and revenues, cost of sales and revenues and gross margin between 2025 and 2024 are as follows: NET COST OF SALES AND SALES AND GROSS ($ in millions) REVENUES REVENUES MARGIN 2024 $ 24,838.4 $ 21,389.8 $ 3,448.6 (Decrease) increase Truck sales volume (5,333.6 ) (4,489.9 ) (843.7 ) Average truck sales prices (306.2 ) (306.2 ) Average material, labor and other direct costs 962.2 (962.2 ) Factory overhead and other indirect costs (188.6 ) 188.6 Extended warranties, operating leases and other 41.2 80.0 (38.8 ) Currency translation 125.5 151.3 (25.8 ) Total decrease (5,473.1 ) (3,485.0 ) (1,988.1 ) 2025 $ 19,365.3 $ 17,904.8 $ 1,460.5 • Truck sales volume decreased revenues by $5,333.6 million and costs by $4,489.9 million, primarily reflecting lower truck deliveries in all major markets. • Average truck sales prices decreased sales by $306.2 million, primarily due to lower price realization in the U.S. and Canada and Europe, reflecting an increased competitive environment, partially offset by tariff price increases in the U.S. • Average cost per truck increased cost of sales by $962.2 million, primarily reflecting higher regulatory and other truck content, increased tariff costs and product support accruals. • Factory overhead and other indirect costs decreased $188.6 million, primarily due to lower labor costs, maintenance costs and factory supplies from lower truck build rates. • Extended warranties, operating leases and other increased revenues by $41.2 million primarily due to a higher portfolio of extended warranty and repair and maintenance (R&M) contracts and higher dealer support services.
PFS income before income taxes decreased to $435.6 million in 2024 from $540.3 million in 2023, primarily due to lower operating lease margins, reflecting lower results on returned lease assets, partially offset by higher finance margins from a higher asset portfolio and higher portfolio yields.
PFS income before income taxes increased to $485.4 million in 2025 from $435.6 million in 2024, due to higher finance margins from a higher loan and finance lease portfolio, and higher operating lease margins from operating lease portfolio, partially offset by a higher provision for losses on receivables.
Truck Outlook Truck industry heavy-duty retail sales in the U.S. and Canada in 2025 are expected to be 250,000 to 280,000 units compared to 268,100 in 2024. In Europe, the 2025 truck industry registrations for over 16-tonne vehicles are expected to be 270,000 to 300,000 units compared to 316,100 in 2024.
In Europe, the 2026 truck industry registrations for over 16-tonne vehicles are expected to be 280,000 to 320,000 units compared to 297,000 in 2025. In South America, heavy-duty truck industry registrations in 2026 are projected to be 100,000 to 110,000 compared to 115,000 in 2025.
The Company’s Other business included the manufacturing and marketing of industrial winches through October 31, 2024, when PACCAR sold its industrial winch business. 2024 Financial Highlights • Worldwide net sales and revenues were $33.66 billion in 2024 compared to $35.13 billion in 2023, primarily due to lower truck revenues, partially offset by higher parts and financial services revenues. • Truck sales were $24.84 billion in 2024 compared to $26.85 billion in 2023 from lower revenues in Europe and the U.S. and Canada. • Parts sales were $6.67 billion in 2024 compared to $6.41 billion in 2023, reflecting higher price realization in all markets. • Financial Services revenues were $2.10 billion in 2024 compared to $1.81 billion in 2023, primarily due to portfolio growth and higher portfolio yields. • In 2024, PACCAR earned net income for the 86 th consecutive year.
The Company’s Financial Services segment derives its earnings primarily from financing or leasing PACCAR products in North America, Europe, Australia and South America. 2025 Financial Highlights • Worldwide net sales and revenues were $28.44 billion in 2025 compared to $33.66 billion in 2024, primarily due to lower truck revenues, partially offset by higher parts and financial services revenues. • Truck sales were $19.37 billion in 2025 compared to $24.84 billion in 2024 due to lower truck deliveries in all major markets. • Parts sales were $6.87 billion in 2025 compared to $6.67 billion in 2024, reflecting higher sales in the U.S. and Canada and Europe. • Financial Services revenues were $2.21 billion in 2025 compared to $2.10 billion in 2024, primarily due to higher interest income driven by retail portfolio growth and higher portfolio yields. • In 2025, PACCAR earned net income for the 87 th consecutive year.
The increase in new loan and finance lease volume reflected higher finance market share of new PACCAR truck sales, primarily in the U.S. and Canada and Brasil. The increase in equipment on operating lease volume reflected higher market demand and a higher amount financed per truck in all major markets.
PFS finance market share of new PACCAR truck sales was 27.0% in 2025 compared to 25.0% in 2024, reflecting higher shares in all markets. The decrease in equipment on operating lease volume was primarily due to lower market demand in the U.S. and Canada and Mexico.
Cost per asset increased $85.1 million due to higher depreciation and operating expenses, mainly in Europe. Financial Services SG&A expense increased to $159.0 million in 2024 from $149.0 million in 2023. The increase was primarily due to higher salaries and related expenses and higher depreciation.
Cost per asset increased $28.5 million due to higher depreciation and operating expenses, mainly in Europe and Mexico. • The currency translation effects reflect an increase in the value of foreign currencies relative to the U.S. dollar, primarily the euro. Financial Services SG&A expense of $159.2 million in 2025 was comparable to $159.0 million in 2024.
The decrease related to Insignificant delay modifications reflects a decrease in customers requesting payment relief for up to three months, primarily in the U.S., partially offset by an increase in customers requesting payment relief for up to three months in Brasil. The increase in Credit modifications reflects higher volumes of contract modifications in the U.S.
Modification activity increased to $1,175.3 million in 2025 from $994.5 million in 2024. The decrease in modifications for commercial reasons primarily reflects lower volumes of refinancing, primarily in the U.S. The increase related to Insignificant delay modifications reflects an increase in customers requesting payment relief for up to three months, primarily in the U.S.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed3 unchanged
Biggest changeThe 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 2024 2023 CONSOLIDATED: Assets Cash equivalents and marketable debt securities $ (49.6 ) $ (29.2 ) FINANCIAL SERVICES: Assets Fixed rate loans (157.7 ) (146.5 ) Interest-rate swaps (35.1 ) Liabilities Fixed rate term debt 198.9 156.8 Interest-rate swaps 1.2 Total $ (43.5 ) $ (17.7 ) 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) .
Biggest changeThe 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 2025 2024 CONSOLIDATED: Assets Cash equivalents and marketable debt securities $ (58.6 ) $ (49.6 ) FINANCIAL SERVICES: Assets Fixed rate loans (179.8 ) (157.7 ) Interest-rate swaps related to debt (35.1 ) Liabilities Fixed rate term debt 202.3 198.9 Interest-rate swaps related to debt (22.0 ) Total $ (58.1 ) $ (43.5 ) 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 commodity prices would be nil related to contracts outstanding at December 31, 2024, compared to a loss of $3.3 at December 31, 2023. The Company had no commodity contracts at December 31, 2024. , 34
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 $.9 related to contracts outstanding at December 31, 2025, compared to a loss of nil at December 31, 2024. The Company had no commodity contracts at December 31, 2024. , 34
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 $126.3 related to contracts outstanding at December 31, 2024, compared to a loss of $259.7 at December 31, 2023.
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 $96.8 related to contracts outstanding at December 31, 2025, compared to a loss of $126.3 at December 31, 2024.

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