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ENVIRONMENTAL LEADERSHIP  — PACCAR is a global environmental leader. All PACCAR manufacturing facilities have earned ISO 14001 environmental certification. Peterbilt Motors’ Model 386 Liquefied Natural Gas (LNG) truck received Environmental Protection Agency (EPA) accreditation for the industry’s first SmartWay designated alternative-fuel vehicle. The company’s manufacturing facilities enhanced their “Zero Waste to Landfill” programs during the year. PACCAR employees are environmentally conscious and utilize van pools, car pools and bus passes for 30% of their business commuting. 

A LOOK AHEAD  — PACCAR’s 23,400 employees enabled the company to distinguish itself as a global leader in the technology, capital goods, financial services and aftermarket parts businesses. Superior product quality, technological innovation and balanced global diversification are three key operating characteristics that define PACCAR’s business philosophy. 

Current estimates for the industry 2012 Class 8 trucks in the U.S. and Canada indicate that sales could range from 210,000-240,000 units. Sales for Class 6 – 7 trucks are expected to be between 60,000-70,000 vehicles. 

The European 15+ tonne truck market in 2012 is also estimated to be in the range of 210,000-240,000 trucks, while demand for medium duty trucks should range from 55,000-65,000 units. 

The outlook for 2012 appears good as the North American economy generates growth of 2-3%, though Europe is struggling with economic challenges. There are opportunities for PACCAR to grow its business in its current markets and eventually in the emerging BRIC markets. PACCAR is well positioned and committed to maintaining the profitable results its shareholders expect, by delivering industry-leading products and services globally. 

PACCAR recognizes three significant retirements. Vice Chairman Tom Plimpton retired upon completion of 35 years of exemplary service, in which he was instrumental in the integration of DAF into PACCAR, the growth of Peterbilt and providing the foundation for PACCAR’s increased investments in Asia. We thank Tom for his dedication, superb performance and positive outreach during his years at PACCAR. Steve Page 

and Bob Parry are retiring after eight years on the PACCAR Board of Directors. Steve’s strong analytical knowledge of international business and Bob’s thorough understanding of finance and economics contributed to PACCAR’s success. We thank Tom, Steve and Bob for their dedication and wish them a happy and healthy retirement. 

PACCAR and its employees are proud of the remarkable achievement of 73 consecutive years of net profit. PACCAR embraces a long-term view of its businesses, and our shareholders have benefited from that approach. The embedded principles of integrity, quality and consistency of purpose continue to define the course in PACCAR’s operations. The proven business strategy — deliver technologically advanced premium products and an extensive array of tailored aftermarket customer services — enables PACCAR to pragmatically approach growth opportunities with a long-term focus. PACCAR is enhancing its stellar reputation as a leading technology company in the capital goods and financial services marketplace. 

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