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The following provides an analysis of the results of operations for the two reportable segments, Truck and Financial Services. Where possible, the Company has quantified the factors identified in the following discussion and analysis. In cases where it is not possible to quantify the impact of factors, the Company lists them in estimated order of importance. 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. 

## 2011 Compared to 2010: 

## Truck 

PACCAR’s Truck segment accounted for 93% and 90% of revenues in 2011 and 2010, respectively. 

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The Company’s worldwide truck and parts sales and revenues increased due to higher market demand, primarily in the U.S. and Canada and Europe. 

The increase in Truck segment income before income taxes was due to higher truck unit sales and margin and higher aftermarket parts sales and margins, partially offset by increases in R&D and selling, general and administrative (SG&A) expenses to support a higher level of business activity. 2011 truck income before income taxes was also affected by the translation of stronger foreign currencies, primarily the euro. The translation effect of all currencies increased 2011 income before income taxes by $28.1 million compared to 2010. 

