10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2020

or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____ to ____.

Commission File Number 001-14817

PACCAR Inc

(Exact name of Registrant as specified in its charter)

Delaware	91-0351110
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

777 - 106th Ave. N.E., Bellevue, WA	98004
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code   (425) 468-7400

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $1 par value	PCAR	The Nasdaq Stock Market

Securities registered pursuant to Section 12(g) of the Act:  NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes  ☒   No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒   No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  ☒

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2020:

Common Stock, $1 par value – $25.44 billion

The number of shares outstanding of the registrant's classes of common stock, as of January 31, 2021:

Common Stock, $1 par value – 346,936,820 shares

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the annual stockholders meeting to be held on April 27, 2021 are incorporated by reference into Part III.

PACCAR Inc – FORM 10-K

INDEX

		Page
PART I		3
ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	9
ITEM 1B.	UNRESOLVED STAFF COMMENTS	11
ITEM 2.	PROPERTIES	12
ITEM 3.	LEGAL PROCEEDINGS	12
ITEM 4.	MINE SAFETY DISCLOSURES	12
PART II		13
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	13
ITEM 6.	SELECTED FINANCIAL DATA	15
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	31
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	32
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	77
ITEM 9A.	CONTROLS AND PROCEDURES	77
ITEM 9B.	OTHER INFORMATION	77
PART III		78
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	78
ITEM 11.	EXECUTIVE COMPENSATION	78
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	78
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	79
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	79
PART IV		80
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	80
SIGNATURES		83

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PART I

ITEM 1. BUSINESS.

(a) General Development of Business

PACCAR Inc (the Company or PACCAR), incorporated under the laws of Delaware in 1971, is the successor to Pacific Car and Foundry Company which was incorporated in Washington in 1924. The Company traces its predecessors to Seattle Car Manufacturing Company formed in 1905.

(b) Financial Information About Industry Segments and Geographic Areas

Information about the Company’s industry segments and geographic areas in response to Items 101(c)(1)(i) of Regulation S-K appears in Item 8, Note S, of this Form 10-K.

(c) Narrative Description of Business

PACCAR is a multinational company operating in three principal industry segments:

(1) The Truck segment includes the design, manufacture and distribution of high-quality, light-, medium- and heavy-duty commercial trucks. Heavy-duty trucks have a gross vehicle weight (GVW) of over 33,000 lbs (Class 8) in North America and over 16 metric tonnes in Europe and South America. Medium-duty trucks have a GVW ranging from 19,500 to 33,000 lbs (Class 6 to 7) in North America, and in Europe, light- and medium-duty trucks range between 6 and 16 metric tonnes. Trucks are configured with engine in front of cab (conventional) or cab-over-engine (COE).

(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.

PACCAR’s Other business includes the manufacturing and marketing of industrial winches.

TRUCKS

PACCAR’s trucks are marketed under the Kenworth, Peterbilt and DAF nameplates. These trucks, which are built in three plants in the United States, three in Europe and one each in Australia, Brasil, Canada and Mexico, are used worldwide for over-the-road and off-highway hauling of commercial and consumer goods. The Company also manufactures 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; 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; Denton, Texas, and Mexicali, Mexico. PACCAR competes in the European light/medium market with DAF COE trucks assembled in the United Kingdom (U.K.) by Leyland, one of PACCAR’s wholly owned subsidiaries, and participates in the European heavy market with DAF COE trucks assembled in the Netherlands and the U.K. PACCAR competes in the Brazilian heavy truck market with DAF models assembled at Ponta Grossa in the state of Paraná, Brasil. PACCAR competes in the Australian medium and heavy truck markets with Kenworth conventional and COE models and certain DAF COE models assembled at its facility at Bayswater in the state of Victoria, Australia, and DAF COE models primarily assembled in the U.K. Commercial truck manufacturing comprises the largest segment of PACCAR’s business and accounted for 70% of total 2020 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 Kenworth nameplate is also marketed and distributed by foreign subsidiaries in Mexico and Australia. The DAF nameplate is marketed and distributed worldwide by a foreign subsidiary headquartered in the Netherlands and is also marketed and distributed by foreign subsidiaries in Brasil and Australia. The decision to operate as a subsidiary or as a division is incidental to PACCAR’s Truck segment operations and reflects legal, tax and regulatory requirements in the various countries where PACCAR operates.

The Truck segment utilizes centrally managed purchasing, information technology, technical research and testing, treasury and finance functions. Some manufacturing plants in North America produce trucks for more than one nameplate, while other plants produce trucks for only one nameplate, depending on various factors. Best manufacturing practices within the Company are shared on a routine basis reflecting the similarity of the business models employed by each nameplate.

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The Company’s trucks have a reputation for high quality products, most of which are ordered by dealers according to customer specifications. Some units are ordered by dealers for stocking to meet the needs of certain customers who require immediate delivery or for customers that require chassis to be fitted with specialized bodies. For a significant portion of the Company’s truck operations, major components, such as engines, transmissions and axles, as well as a substantial percentage of other components, are purchased from component manufacturers pursuant to PACCAR and customer specifications. DAF, which is more vertically integrated, manufactures PACCAR engines and axles and a higher percentage of other components for its heavy truck models. The Company also manufactures engines at its Columbus, Mississippi facility. In 2020, the Company installed PACCAR engines in approximately 40% 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 purchased a significant portion of its transmissions from Eaton Corporation Plc. (Eaton) and ZF Friedrichshafen AG (ZF). The Company also purchased a significant portion of North America stampings used for cabs from Magna International Inc. (Magna). The Company has long-term agreements with Cummins, Eaton, ZF and Magna to provide for continuity of supply. A loss of supply from Cummins, Eaton, ZF or Magna, and the resulting interruption in the production of trucks, would have a material effect on the Company’s results. Purchased materials and parts include raw materials, partially processed materials, such as castings, and finished components manufactured by independent suppliers. Raw materials, partially processed materials and finished components make up approximately 85% of the cost of new trucks. The value of major finished truck components manufactured by independent suppliers ranges from approximately 32% in Europe to approximately 87% in North America. In addition to materials, the Company’s cost of sales includes labor and factory overhead, vehicle delivery and warranty. Accordingly, except for certain factory overhead costs such as facilities depreciation, property taxes and utilities, the Company’s cost of sales are highly correlated to sales.

The Company’s DAF subsidiary purchases fully assembled cabs from a competitor, Renault V.I., for its European light-duty product line pursuant to a joint product development and long-term supply contract. Sales of trucks manufactured with these cabs amounted to approximately 3% of consolidated revenues in 2020. 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. However, a loss of supply for an extended period of time would require the Company to either contract for an alternative source of supply or to manufacture cabs itself.

Other than these components, the Company is not limited to any single source for any significant component, although the sudden inability of a supplier to deliver components could have a temporary adverse effect on production of certain products. Manufacturing inventory levels are based upon production schedules, and orders are placed with suppliers accordingly.

Key factors affecting Truck segment earnings include the number of new trucks sold in the markets served and the margins realized on the sales. The Company’s sales of new trucks are dependent on the size of the truck markets served and the Company’s share of those markets. Truck segment sales and margins tend to be cyclical based on the level of overall economic activity, the availability of capital and the amount of freight being transported. The Company’s costs for trucks consist primarily of material costs, which are influenced by the price of commodities such as steel, copper, aluminum and petroleum. The Company utilizes long-term supply agreements to reduce the variability of the unit cost of purchased materials and finished components. The Company’s spending on research and development varies based on product development cycles and government requirements such as changes to diesel engine emissions and vehicle fuel efficiency standards in the various markets served. The Company maintains rigorous control of selling, general and administrative (SG&A) expenses and seeks to minimize such costs.

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 30.1% of retail sales in 2020, and the Company’s medium-duty market share was 22.6%. In Europe, there are six principal competitors in the commercial truck market, including parent companies to three competitors of the Company in the U.S. In 2020, DAF had a 16.3% 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. PACCAR is not dependent on any single customer for its sales. There are no significant seasonal variations in sales.

The Peterbilt, Kenworth and DAF nameplates are recognized internationally and play an important role in the marketing of the Company’s truck products. The Company engages in a continuous program of trademark and trade name protection in all marketing areas of the world.

The Company’s truck products are subject to noise, emission and safety regulations. Competing manufacturers are subject to the same regulations. The Company believes the cost of complying with these regulations will not be detrimental to its business.

The Company had a total production backlog of $7.6 billion at the end of 2020. Within this backlog, orders scheduled for delivery within three months (90 days) are considered to be firm. The 90‑day backlog approximated $4.6 billion at December 31, 2020, $3.3 billion at December 31, 2019 and $4.5 billion at December 31, 2018. Production of the year-end 2020 backlog is expected to be substantially completed during 2021.

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PARTS

The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles to over 2,200 Kenworth, Peterbilt and DAF dealers in 102 countries around the world. Aftermarket truck parts are sold and delivered to the Company’s independent dealers through the Company’s 18 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 parts inventory levels are determined largely by anticipated customer demand and the need for timely delivery. The Parts segment accounted for 21% of total 2020 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 sales are influenced by the total number of the Company’s trucks in service and the average age and mileage of those trucks. To reflect the benefit the Parts segment receives from costs incurred by the Truck segment, certain factory overhead, research and development, engineering and SG&A expenses are allocated from the Truck segment to the Parts segment. The Company’s cost for parts sold consists primarily of material costs, which are influenced by the price of commodities such as steel, copper, aluminum and petroleum. The Company utilizes long-term supply agreements to reduce the variability of the cost of parts sold. The Company maintains rigorous control of SG&A expenses and seeks to minimize such costs.

FINANCIAL SERVICES

PACCAR Financial Services (PFS) operates in 26 countries in North America, Europe, Australia and South America through wholly owned finance companies operating under the PACCAR Financial trade name. PFS also conducts full-service leasing operations through operating divisions or wholly owned subsidiaries in North America, Germany and Australia under the PacLease trade name. Selected dealers in North America are franchised to provide full-service leasing. PFS provides its franchisees with equipment financing and administrative support. PFS also operates its own full service lease outlets. 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 56% of total assets in 2020.

PFS is primarily responsible for managing the sales of the Company’s used trucks. The Company’s Financial Services segment sells used trucks returned from matured operating leases in the ordinary course of business and trucks acquired from repossessions. PFS also obtains used trucks from the Truck segment in trades related to new truck sales and trucks returned from residual value guarantees (RVGs). Certain gains and losses from the sale of used trucks are shared with the Truck segment. The Company’s Financial Services segment records revenue on the sale of used trucks received in trade and RVG returns.

The Company’s finance receivables are classified as dealer wholesale, dealer retail and customer retail segments. The dealer wholesale segment consists of truck inventory financing to independent PACCAR dealers. The dealer retail segment consists of loans and leases to participating dealers and franchises, which use the proceeds to fund their customers’ acquisition of trucks and related equipment. The customer retail segment consists of loans and leases directly to customers for their acquisition of trucks and related equipment. Customer retail receivables are further segregated by fleet and owner/operator classes. The fleet class consists of customers operating more than five trucks. All others are considered owner/operators. Similar methods are employed to assess and monitor credit risk for each class.

Finance receivables are secured by the trucks and related equipment being financed or leased. The terms of loan and lease contracts generally range from three to five years depending on the type and use of equipment. Payment is required on dealer inventory financing when the floored truck is sold to a customer or upon maturity of the flooring loan, whichever comes first. Dealer inventory loans generally mature within one year.

The Company funds its financial services activities primarily from collections on existing finance receivables and borrowings in the capital markets. The primary sources of borrowings in the capital markets are commercial paper and medium-term notes issued in public and private offerings and, to a lesser extent, bank loans. An additional source of funds is loans from other PACCAR companies. PFS matches the maturity and interest rate characteristics of its debt with the maturity and interest rate characteristics of loans and leases.

Key factors affecting the earnings of the Financial Services segment include the volume of new loans and leases, the yield earned on the loans and leases, the costs of funding investments in loans and leases and the ability to collect the amounts owed to PFS. New loan and lease volume is dependent on the volume of new trucks sold by Kenworth, Peterbilt and DAF and the share of those truck sales that are financed by the Financial Services segment. The Company’s Financial Services market share is influenced by the extent of competition in the financing market. PFS’s primary competitors include commercial banks and independent finance and leasing companies.

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The revenue earned on loans and leases depends on market interest and lease rates and the ability of PFS to differentiate itself from the competition by superior industry knowledge and customer service. Dealer inventory loans have variable rates with rates reset monthly based on an index pertaining to the applicable local market. Retail loan and lease contracts normally have fixed rates over the contract term. PFS obtains funds either through fixed rate borrowings or through variable rate borrowings, a portion of which have been effectively converted to fixed rate through the use of interest-rate contracts. This enables PFS to obtain a stable spread between the cost of borrowing and the yield on fixed rate contracts over the contract term. Included in Financial Services cost of revenues is depreciation on equipment on operating leases. The amount of depreciation on operating leases principally depends on the acquisition cost of leased equipment, the term of the leases, which generally ranges from three to five years, and the residual value of the leases, which generally ranges from 30% to 70%. The margin earned is the difference between the revenues on loan and lease contracts and the direct costs of operation, including interest and depreciation.

PFS incurs credit losses when customers are unable to pay the full amounts due under loan and finance lease contracts. PFS takes a conservative approach to underwriting new retail business in order to minimize credit losses.

The ability of customers to pay their obligations to PFS depends on the state of the general economy, the extent of freight demand, freight rates and the cost of fuel, among other factors. PFS limits its exposure to any one customer, with no one customer or dealer balance representing over 5% of the aggregate portfolio assets. PFS generally requires a down payment and secures its interest in the underlying truck collateral and may require other collateral or guarantees. In the event of default, PFS will repossess the truck and sell it in the open market primarily through its dealer network as well as PFS used truck centers. PFS will also seek to recover any shortfall between the amounts owed and the amounts recovered from sale of the collateral. The amount of credit losses depends on the rate of default on loans and finance leases and, in the event of repossession, the ability to recover the amount owed from sale of the collateral which is affected by used truck prices. PFS’s experience over the last sixty years financing truck sales has been that periods of economic weakness result in higher past dues and increased rates of repossession. Used truck prices also tend to fall during periods of economic weakness. As a result, credit losses tend to increase during periods of economic weakness. PFS provides an allowance for credit losses based on specifically identified customer risks and an analysis of estimated losses inherent in the portfolio, considering the amount of past due accounts, the trends of used truck prices and the current and forecasted economic conditions of its geographic markets.

Financial Services SG&A expenses consist primarily of personnel costs associated with originating and servicing the loan and lease portfolios. These costs vary somewhat depending on overall levels of business activity, but given the ongoing nature of servicing activities, tend to be relatively stable.

OTHER BUSINESSES

Other businesses include the manufacturing of industrial winches in two U.S. plants and marketing them under the Braden, Carco and Gearmatic nameplates. The markets for these products are highly competitive, and the Company competes with a number of well established firms. Sales of industrial winches were less than 1% of total net sales and revenues in 2020, 2019 and 2018.

The Braden, Carco and Gearmatic trademarks and trade names are recognized internationally and play an important role in the marketing of those products.

PATENTS

The Company owns numerous patents which relate to all product lines. Although these patents are considered important to the overall conduct of the Company’s business, no patent or group of patents is considered essential to a material part of the Company’s business.

REGULATION

As a manufacturer of highway trucks, the Company is subject to the National Traffic and Motor Vehicle Safety Act and Federal Motor Vehicle Safety Standards promulgated by the National Highway Traffic Safety Administration as well as environmental laws and regulations in the United States, and is subject to similar regulations in all countries where it has operations and where its trucks are distributed. In addition, the Company is subject to certain other licensing requirements to do business in the United States and Europe. The Company believes it is in compliance with laws and regulations applicable to safety standards, the environment and other licensing requirements in all countries where it has operations and where its trucks are distributed.

Information regarding the effects that compliance with international, federal, state and local provisions regulating the environment have on the Company’s capital and operating expenditures and the Company’s involvement in environmental cleanup activities is

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included in Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Company’s Consolidated Financial Statements in Items 7 and 8, respectively.

HUMAN CAPITAL MANAGEMENT

PACCAR is committed to a strong, diverse and inclusive culture and the Company’s excellent financial results reflect its human centered philosophy. The Company provides its employees with robust benefits packages, comprehensive training programs, tuition assistance and a work environment that promotes safety and diversity.

The Company’s benefit packages support employee physical, emotional and financial well-being. 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. The Company has diversity councils throughout its global business that set goals to enhance business success through diverse and inclusive workplaces. 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.

Safety is a key priority and the Company’s major manufacturing facilities are equipped with safety and health departments staffed with trained medical personnel. In response to the COVID-19 pandemic, the Company adapted its facilities for social distancing and implemented strong procedures to maintain appropriate health and safety protocols. The Company’s managers continuously address safety enhancements; provide regular and ongoing safety training; and use displays located in factories to provide all employees with safety-related information. PACCAR's consistent focus on workplace safety has resulted in a recordable injury rate lower than the U.S. industry average.

On December 31, 2020, the Company had approximately 26,000 employees. Approximately 38% are U.S. employees.

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). The information on the Company’s website is not incorporated by reference into this report. In addition, the Company’s reports filed with the SEC can be found at www.sec.gov.

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INFORMATION ABOUT THE COMPANY’S EXECUTIVE OFFICERS

Item 401(b) of Regulation S-K:

Information about the Company’s Executive Officers as of February 17, 2021 is as follows:

Name and Age	Present Position and Other Position(s) Held During Last Five Years
Mark C. Pigott (67)	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 (53)	Chief Executive Officer since July 2019; Executive Vice President September 2018 to June 2019; Vice President of PACCAR and President of DAF Trucks N.V. from April 2016 to August 2018; Vice President and General Manager, Kenworth from January 2015 to April 2016.
Harrie C.A.M. Schippers (58)	President and Chief Financial Officer since January 2018; Executive Vice President and Chief Financial Officer from February 2017 to December 2017; Senior Vice President from April 2016 to February 2017; Vice President of PACCAR and President of DAF Trucks N.V. from April 2010 to April 2016.
Michael T. Barkley (65)	Senior Vice President and Controller since January 2016.
C. Michael Dozier (55)	Senior Vice President since January 2020; Vice President of PACCAR from August 2019 to December 2019; Vice President of PACCAR and General Manager, Kenworth from April 2016 to July 2019; Managing Director, PACCAR Australia from April 2013 to March 2016.
T. Kyle Quinn (59)	Senior Vice President and Chief Technology Officer since April 2018; Senior Vice President and General Manager, Peterbilt from January 2017 to March 2018; Senior Vice President from January 2016 to January 2017.
Darrin C. Siver (54)	Senior Vice President since January 2017; Vice President and General Manager, Peterbilt from June 2013 to December 2016.
Kevin D. Baney (50)	Vice President of PACCAR and General Manager of Kenworth Truck Company since August 2019; Assistant General Manager – Sales and Marketing, Kenworth from January 2017 to July 2019; Kenworth Chief Engineer from March 2012 to December 2016.
David J. Danforth (60)	Vice President of PACCAR and General Manager, PACCAR Parts since 2014.
Todd R. Hubbard (58)	Vice President, Global Financial Services since February 2019; President, PACCAR Financial Corp. from April 2011 to January 2019.
Jack K. LeVier (61)	Vice President, Human Resources since June 2007.
A. Lily Ley (55)	Vice President and Chief Information Officer since January 2017; General Manager and Chief Information Officer from January 2016 to December 2016.
Jason P. Skoog (49)	Vice President of PACCAR and General Manager of Peterbilt since April 2018; Assistant General Manager – Operations, Kenworth from January 2017 to March 2018; Assistant General Manager – Sales and Marketing, Kenworth from January 2015 to December 2016.
Michael K. Walton (56)	Vice President and General Counsel since August 2020; Senior Counsel from August 2007 to July 2020; also served as Corporate Secretary from January 2015 to April 2016.
Harry M.B. Wolters (50)	Vice President of PACCAR and President of DAF Trucks N.V. since September 2018; European Sales Director, DAF Trucks, from October 2017 to August 2018; Operations Director, DAF Trucks from October 2014 to September 2017.

Officers are appointed by the Board of Directors annually but may be appointed or removed on interim dates.

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ITEM 1A. RISK FACTORS.

The following are significant risks which could have a material negative impact on the Company’s financial condition or results of operations.

Business and Industry Risks

Commercial Truck Market Demand is Variable. The Company’s business is highly sensitive to global and national economic conditions as well as economic conditions in the industries and markets it serves. Negative economic conditions and outlook can materially weaken demand for the Company’s equipment and services. The yearly demand for commercial vehicles may increase or decrease more than overall gross domestic product in markets the Company serves, which are principally North America and Europe. Demand for commercial vehicles may also be affected by the introduction of new vehicles and technologies by the Company or its competitors.

Competition and Prices. The Company operates in a highly competitive environment, which could adversely affect the Company’s sales and pricing. Financial results depend largely on the ability to develop, manufacture and market competitive products that profitably meet customer demand.

Production Costs and Supplier Capacity. The Company’s products are exposed to variability in material and commodity costs. Commodity or component price increases and significant shortages of component products may adversely impact the Company’s financial results or use of its production capacity. Many of the Company’s suppliers also supply automotive manufacturers, and factors that adversely affect the automotive industry can also have adverse effects on these suppliers and the Company. Supplier delivery performance can be adversely affected if increased demand for these suppliers’ products exceeds their production capacity. Unexpected events, including natural disasters, may increase the Company’s cost of doing business or disrupt the Company’s or its suppliers’ operations.

The automotive industry is currently experiencing a semiconductor supply shortage that is having wide-ranging effects across the automotive supply chain including some of the Company’s suppliers. The shortage may have a short-term impact on the ability of the Company to deliver products to dealers and customers.

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. A lowering of the Company’s credit ratings could increase the cost of borrowing and adversely affect access to capital markets. The Company’s Financial Services segment obtains funds for its operations from commercial paper, medium-term notes and bank debt. If the markets for commercial paper, medium-term notes and bank debt do not provide the necessary liquidity in the future, the Financial Services segment may experience increased costs or may have to limit its financing of retail and wholesale assets. This could result in a reduction of the number of vehicles the Company is able to produce and sell to customers.

The Financial Services Industry is Highly Competitive. The Company’s Financial Services segment competes with banks, other commercial finance companies and financial services firms which may have lower costs of borrowing, higher leverage or market share goals that result in a willingness to offer lower interest rates, which may lead to decreased margins, lower market share or both. A decline in the Company’s truck unit sales and a decrease in truck residual values and used truck inventory values due to lower used truck pricing are also factors which may affect the Company’s Financial Services segment.

The Financial Services Segment is Subject to Credit Risk. The Financial Services segment is exposed to the risk of loss arising from the failure of a customer, dealer or counterparty to meet the terms of the loans, leases and derivative contracts with the Company. Although the financial assets of the Financial Services segment are secured by underlying equipment collateral, in the event a customer cannot meet its obligations to the Company, there is a risk that the value of the underlying collateral will not be sufficient to recover the amounts owed to the Company, resulting in credit losses.

Interest-Rate Risks. The Financial Services segment is subject to interest-rate risks, because increases in interest rates can reduce demand for its products, increase borrowing costs and potentially reduce interest margins. PFS uses derivative contracts to match the interest-rate characteristics of its debt to the interest rate characteristics of its finance receivables in order to mitigate the risk of changing interest rates.

9

Information Technology. The Company relies on information technology systems and networks to process, transmit and store electronic information, and to manage or support a variety of its business processes and activities. These computer systems and networks may be subject to disruptions during the process of upgrading or replacing software, databases or components; power outages; hardware failures; computer viruses; or outside parties attempting to disrupt the Company’s business or gain unauthorized access to the Company’s electronic data. The Company maintains and continues to invest in protections to guard against such events. Examples of these protections include conducting third-party penetration tests, implementing software detection and prevention tools, event monitoring, and disaster recoverability. Additionally the Company maintains a cybersecurity insurance policy. Despite these safeguards, there remains a risk of system disruptions, unauthorized access and data loss.

If the Company’s computer systems were to be damaged, disrupted or breached, it could impact data availability and integrity, result in a theft of the Company’s intellectual property or lead to unauthorized disclosure of confidential information of the Company’s customers, suppliers and employees. Security breaches could also result in a violation of U.S. and international privacy and other laws and subject the Company to various litigations and governmental proceedings. These events could have an adverse impact on the Company’s results of operations and financial condition, damage its reputation, disrupt operations and negatively impact competitiveness in the marketplace.

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 may be adversely affected by political instabilities, fuel shortages or interruptions in utility or transportation systems, natural calamities, wars, terrorism and labor strikes. 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.

COVID-19 Pandemic. The COVID-19 pandemic and various governmental responses to contain the outbreak have resulted in a significant reduction in global economic activity. National and local governments have issued various stay-at-home orders, travel restrictions and border closures affecting consumers and businesses. These restrictions have been lifted to various degrees in different locations, but are subject to being re-imposed. The Company’s operations have been designated as essential businesses in many jurisdictions as they support the transport of food, medical supplies and other essential materials which means the Company may operate under certain conditions including ensuring employee health and safety is maintained. The Company’s workforce at a given location could be affected by a localized outbreak of COVID-19, necessitating facility shutdowns. If the Company suspends production at one or more of its factories as a result of the pandemic or related impacts, or if one or more of the Company’s suppliers could not produce needed parts or not produce at sufficient volumes to support the Company’s production plans or aftermarket requirements, revenues and operating results could be adversely affected.

The full extent and duration of the adverse effect on the Company’s business is uncertain and depends on the severity of the pandemic and how quickly and to what extent global and local economies are able to recover from the effects of the pandemic. Prolonged unemployment, changes in consumer behavior as a result of COVID-19, as well as other pandemic related economic factors such as business failures, lower housing and construction starts, lower automobile sales and disruptions in financial markets could have further adverse effects on the Company’s truck and parts revenues and operating results and may result in higher finance portfolio past dues, credit losses and used truck losses. Other unforeseen impacts of the COVID-19 pandemic could also impact the Company’s business and results of operations.

U.K. Exit from the European Union (EU). The Company manufactures medium- and heavy-duty DAF trucks in the U.K. which are sold primarily in the U.K. and to a lesser extent in Europe and other world markets. In 2020, approximately 10% of the Company’s worldwide truck production was manufactured in the U.K. The EU and U.K. concluded negotiations on the EU-UK Trade and Cooperation Agreement (EU-UK TCA) which was passed by the U.K. Parliament on December 30, 2020, and is pending formal consent of the European Parliament which is expected in early 2021. The EU-UK TCA provides for continued tariff-free, quota-free access for products traded between the U.K. and the EU, subject to Rules of Origin requirements. The Company believes it will qualify for the proposed Rules of Origin requirements.  

London Inter-Bank Offered Rate (LIBOR) Transition. Certain financing provided by PFS to dealers and retail customers, as well as financing extended to PFS are based on variable interest rate contracts. These contracts utilize various benchmark rates, including LIBOR, to establish applicable contract interest rates. PACCAR also utilizes hedging instruments and has line of credit arrangements which reference LIBOR (including other similar benchmark rates). In July 2017, the U.K. Financial Conduct Authority, which regulates LIBOR, announced it intends to stop compelling banks to submit rates for calculation of LIBOR after 2021. At this time it is not clear if LIBOR will continue to exist, and if not, what alternative benchmark rate(s) will replace LIBOR in the marketplace. Any

10

new benchmark rate will likely not replicate LIBOR exactly, which could impact currently active contracts which terminate after 2021, or after such other date when LIBOR may cease to exist.

Substantially all of the Company’s contracts which reference LIBOR, including dealer wholesale financing contracts, medium-term notes, hedging instruments and line of credit arrangements, include fall-back language that specifies the methods to establish contract interest rates in the absence of LIBOR, or provide for the use of an alternative benchmark rate should LIBOR be discontinued. The Company has efforts underway to offer new finance contracts which makes use of alternative benchmark rates in replacement of all instances where LIBOR was previously used. These efforts are expected to be completed prior to December 31, 2021.

The Company has retail loan and lease contracts with a December 31, 2020 balance of approximately $148 million, or less than 1% of PFS assets, referencing LIBOR that extend beyond 2021 and do not contain fall-back language or provide for the use of an alternative benchmark rate. The Company will seek to amend these contracts to allow for the use of an alternative benchmark rate.

Changes to benchmark rates will have an uncertain impact on finance receivables and other financial obligations, our current or future cost of funds and/or access to capital markets. The Company will attempt to minimize the impact of differences between the current and replacement benchmark rates through pricing adjustments on the financing provided by PFS, but it is not certain the Company will be able to do so. Based on the current balance of finance contracts referencing LIBOR, it is estimated that for a 10 basis point difference between the current and replacement benchmark rates that the Company is unable to recover through pricing adjustments, income before income taxes would decrease by approximately $1.6 million. Accordingly, the Company does not expect the anticipated changes to the use of LIBOR as a benchmark rate will have a material impact on the results of operations.

Environmental Regulations. The 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.

Litigation, Product Liability and Regulatory. The Company’s products are subject to recall for environmental, performance and safety-related issues. Product recalls, lawsuits, regulatory actions or increases in the reserves the Company establishes for contingencies may increase the Company’s costs and lower profits. Due to the international nature of the Company’s business, some products are also subject to international trade regulations, including customs and import / export related laws and regulations, government embargoes and sanctions prohibiting sales to specific persons or countries, as well as anti-corruption laws. The Company’s reputation and its brand names are valuable assets, and claims or regulatory actions, even if unsuccessful or without merit, could adversely affect the Company’s reputation and brand images because of adverse publicity.

Currency Exchange and Translation. The Company’s consolidated financial results are reported in U.S. dollars, while significant operations are denominated in the currencies of other countries. Currency exchange rate fluctuations can affect the Company’s assets, liabilities and results of operations through both translation and transaction risk, as reported in the Company’s financial statements. The Company uses certain derivative financial instruments and localized production of its products to reduce, but not eliminate, the effects of foreign currency exchange rate fluctuations.

Accounting Estimates. In the preparation of the Company’s financial statements in accordance with U.S. generally accepted accounting principles, management uses estimates and makes judgments and assumptions that affect asset and liability values and the amounts reported as income and expense during the periods presented. Certain of these estimates, judgments and assumptions, such as residual values on operating leases, the allowance for credit losses and product warranty are particularly sensitive. If actual results are different from estimates used by management, they may have a material impact on the financial statements. For additional disclosures regarding accounting estimates, see “Critical Accounting Policies” under Item 7 of this Form 10-K.

Taxes. Changes in statutory income tax rates in the countries in which the Company operates impact the Company’s effective tax rate. 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.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

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ITEM 2. PROPERTIES.

The Company and its subsidiaries own and operate manufacturing plants in five U.S. states, three countries in Europe, and in Australia, Brasil, Canada and Mexico. The Company also has 18 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. Facilities for product testing and research and development are located in the state of Washington and the Netherlands. The Company also has an innovation center in Sunnyvale, California. The Company's corporate headquarters is located in owned premises in Bellevue, Washington. The Company considers all of the properties used by its businesses to be suitable for their intended purposes.

The Company invests in facilities, equipment and processes to provide manufacturing and warehouse capacity to meet its customers’ needs and improve operating performance.

The following summarizes the number of the Company’s manufacturing plants and parts distribution centers by geographical location within indicated industry segments:

	U.S		Canada		Australia		Mexico		Europe		Central and So. America
Truck		4		1		1		1		3		1
Parts		6		2		2		1		5		2
Other		2		—		—		—		—		—

ITEM 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 SAFETY DISCLOSURES.

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

(a) Market Information, Holders, Dividends, Securities Authorized for Issuance Under Equity Compensation Plans and Performance Graph.

Market Information, Holders and Dividends.

Common stock of the Company is traded on the Nasdaq Stock Market under the symbol PCAR. The table below reflects the range of trading prices as reported by the Nasdaq Stock Market and cash dividends declared. There were 1,469 record holders of the common stock at December 31, 2020.

	2020						2019
	DIVIDENDS		STOCK PRICE				DIVIDENDS		STOCK PRICE
QUARTER	DECLARED		HIGH		LOW		DECLARED		HIGH		LOW
First	$	.32	$	79.66	$	49.11	$	.32	$	70.35	$	55.84
Second		.32		79.48		58.21		.32		73.00		65.78
Third		.32		91.30		74.00		.32		72.86		62.13
Fourth		.32		95.82		82.85		.32		83.41		65.17
Year-End Extra		.70						2.30

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, 2020 regarding compensation plans under which PACCAR equity securities are authorized for issuance.

	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		3,767,655	$	64.34		11,806,487

All stock compensation plans have been approved by the stockholders.

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 425,826 shares that represent deferred cash awards payable in stock.

Securities available for future grant are authorized under the following two plans: (i) 11,129,964 shares under the LTI Plan, and (ii) 676,523 shares under the RSDC Plan.

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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 groups of companies identified in the graph (the “Peer Group Index”) for the last five fiscal years ended December 31, 2020. Standard & Poor’s has calculated a return for each company in the Peer Group Index weighted according to its respective capitalization at the beginning of each period with dividends reinvested on a monthly basis. Management believes that the identified companies and methodology used in the graph for the Peer Group Index provide a better comparison than other indices available. The Peer Group Index consists of AGCO Corporation, Caterpillar Inc., Cummins Inc., Dana Incorporated, Deere & Company, Eaton Corporation, Meritor Inc., Navistar International Corporation, Oshkosh Corporation, AB Volvo and CNH Industrial N.V. The comparison assumes that $100 was invested December 31, 2015, in the Company’s common stock and in the stated indices and assumes reinvestment of dividends.

	2015		2016		2017		2018		2019		2020
PACCAR Inc		100		138.38		158.89		134.55		195.16		218.07
S&P 500 Index		100		111.96		136.40		130.42		171.49		203.04
Peer Group Index		100		142.24		214.65		177.39		227.93		302.22

(b) Use of Proceeds from Registered Securities.

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, 2020, the Company has repurchased $110.0 million of shares under this plan. There were no repurchases made during the fourth quarter of 2020.

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ITEM 6. SELECTED FINANCIAL DATA.

		2020		2019		2018		2017		2016
	(millions, except per share data)
Truck, Parts and Other Net Sales and Revenues	$	17,154.3	$	24,119.7	$	22,138.6	$	18,187.5	$	15,846.6
Financial Services Revenues		1,574.2		1,480.0		1,357.1		1,268.9		1,186.7
Total Revenues	$	18,728.5	$	25,599.7	$	23,495.7	$	19,456.4	$	17,033.3
Net Income	$	1,298.4	$	2,387.9	$	2,195.1	$	1,675.2	$	521.7
Adjusted Net Income *								1,501.8		1,354.7
Net Income Per Share:
Basic		3.74		6.88		6.25		4.76		1.49
Diluted		3.74		6.87		6.24		4.75		1.48
Adjusted Diluted *								4.26		3.85
Cash Dividends Declared Per Share		1.98		3.58		3.09		2.19		1.56
Total Assets:
Truck, Parts and Other		12,460.2		12,289.7		11,082.8		10,237.9		8,444.1
Financial Services		15,799.8		16,071.4		14,399.6		13,202.3		12,194.8
Financial Services Debt		10,853.3		11,222.7		9,950.5		8,879.4		8,475.2
Stockholders’ Equity		10,390.0		9,706.1		8,592.9		8,050.5		6,777.6

* See Reconciliation of GAAP to Non-GAAP Financial Measures.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES:

Item 6 of this Form 10-K includes “adjusted net income (non-GAAP)” and “adjusted net income per diluted share (non-GAAP)”, which are financial measures that are not in accordance with U.S. generally accepted accounting principles (“GAAP”), since they exclude the one-time tax benefit from the Tax Cuts and Jobs Act (“the Tax Act”) in 2017 and the non-recurring European Commission charge in 2016. These measures differ from the most directly comparable measures calculated in accordance with GAAP and may not be comparable to similarly titled non-GAAP financial measures used by other companies.

Management utilizes these non-GAAP measures to evaluate the Company’s performance and believes these measures allow investors and management to evaluate operating trends by excluding significant non-recurring items that are not representative of underlying operating trends.

Reconciliations from the most directly comparable GAAP measures of adjusted net income (non-GAAP) and adjusted net income per diluted share (non-GAAP) are as follows:

($ in millions, except per share amounts)
Year Ended December 31,	2017			2016
Net income	$	1,675.2		$	521.7
One-time tax benefit from the Tax Act		(173.4	)
Non-recurring European Commission charge					833.0
Adjusted net income (non-GAAP)	$	1,501.8		$	1,354.7
Per diluted share:
Net income	$	4.75		$	1.48
One-time tax benefit from the Tax Act		(.49	)
Non-recurring European Commission charge					2.37
Adjusted net income (non-GAAP)	$	4.26		$	3.85

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW:

PACCAR is a global technology company whose Truck segment includes the design and manufacture of high-quality light-, medium- and heavy-duty commercial trucks. In North America, trucks are sold under the Kenworth and Peterbilt nameplates, in Europe, under the DAF nameplate and in Australia and South America, under the Kenworth and DAF nameplates. The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles. The Company’s Financial Services segment derives its earnings primarily from financing or leasing PACCAR products in North America, Europe and Australia. The Company’s Other business includes the manufacturing and marketing of industrial winches.

PACCAR’s financial results for year ended December 31, 2020 were impacted by the COVID-19 pandemic, with the most significant impact in the quarter ended June 30, 2020. The Company’s truck and engine production was suspended at its factories worldwide starting March 24, 2020. Truck and engine production restarted in Europe and Australia on April 20, 2020, and factories gradually resumed operations in North America and Brasil in early May. In the third quarter the Company resumed production at rates sufficient to accommodate demand while maintaining appropriate health and safety protocols. Effects of the pandemic included reduced truck deliveries, increased costs associated with the suspension of production, lower aftermarket parts sales and higher provision for losses on Financial Services receivables. Increased costs related to the suspension and subsequent resumption of production primarily included reduced labor efficiency, costs to prepare factories for safe re-opening and reduced factory utilization. The Company implemented cost saving measures to partially offset the increased costs. During the pandemic, the Company’s Parts segment continues to provide aftermarket support through its parts distribution centers, and the Financial Services segment continues to provide financing, leasing services and related support to customers.

2020 Financial Highlights

• Worldwide net sales and revenues were $18.73 billion in 2020 compared to $25.60 billion in 2019 due to lower truck revenues.

• Truck sales were $13.16 billion in 2020 compared to $19.99 billion in 2019 primarily due to lower truck deliveries in the U.S. and Canada and Europe.

• Parts sales were $3.91 billion in 2020 compared to $4.02 billion in 2019 primarily due to lower demand in the U.S. and Canada.  

• Financial Services revenues were $1.57 billion in 2020 compared to $1.48 billion in 2019. The increase was primarily the result of higher used truck sales in Europe.

• In 2020, PACCAR earned net income for the 82^nd consecutive year. Net income was $1.30 billion ($3.74 per diluted share) in 2020 compared to $2.39 billion ($6.87 per diluted share) in 2019 primarily reflecting lower Truck operating results.

• Capital investments were $569.5 million in 2020 compared to $743.9 million in 2019 reflecting continued investments in the Company’s manufacturing facilities, new product development and enhanced aftermarket support.

• After-tax return on beginning equity (ROE) was 13.4% in 2020 compared to 27.8% in 2019.

• Research and development (R&D) expenses were $273.9 million in 2020 compared to $326.6 million in 2019.

PACCAR signed a global strategic agreement with Aurora, a leader in autonomous driving technologies, to develop autonomous Peterbilt 579 and Kenworth T680 trucks. The partnership will integrate PACCAR’s autonomous vehicle platform with the Aurora self-driving technologies to deliver enhanced safety and operational efficiency to customers. Kenworth T680 and Peterbilt 579 trucks utilizing the Aurora Driver are expected to be delivered in the next several years.

A Kenworth T680 fuel cell electric vehicle and a battery electric Peterbilt 579EV became the first Class 8 zero emissions vehicles to drive to the 14,115 foot summit of Pikes Peak in Colorado, demonstrating superb power and excellent drivability. More than 60 hybrid and zero emissions vehicles are currently in customer testing, which have traveled nearly 500,000 miles. Kenworth K270E and T680E, Peterbilt 579EV, 220EV and 520EV, and DAF CF Electric zero emissions trucks became available for customers to order in the third quarter of 2020. The Company anticipates electric vehicle production may be a few hundred units in 2021.

Kenworth and Toyota Motor North America are collaborating on a project to develop Kenworth T680 zero emissions trucks powered by hydrogen fuel cell electric powertrains.

PACCAR Parts continues to add global parts distribution capacity to further enhance parts availability to its customers. A new 260,000 square-foot distribution center will open in Louisville, Kentucky next year.

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PACCAR has been honored as a global leader in environmental practices by reporting firm CDP, earning a score of “A-” in 2020, which places PACCAR in the top 15% of over 9,500 reporting companies which disclose data about their environmental programs to CDP for independent assessment. Environmental leadership is one of PACCAR’s core values, and the Company has earned an “A” or “A-” rating for six consecutive years.

PACCAR Inc, Kenworth, Peterbilt, PACCAR Parts and Dynacraft were each honored by the Women in Trucking Association (WIT) as a 2020 “Top Company for Women to Work for in Transportation”. The recognition was for fostering gender diversity, flexible hours, competitive compensation and benefits, training, professional development and career advancement opportunities.

PACCAR Financial Services (PFS) recently opened used truck centers in Lyon, France, Denton, Texas, and Prague, Czech Republic, and plans to open a used truck facility in Madrid, Spain in 2021.

The PFS group of companies has operations covering four continents and 26 countries. The global breadth of PFS and its rigorous credit application process support a portfolio of loans and leases with total assets of $15.80 billion. PFS issued $1.99 billion in medium-term notes during 2020 to support portfolio growth and repay maturing debt.

Truck Outlook

The Company suspended truck production worldwide on March 24, 2020, due to the COVID-19 pandemic, with production resuming at all facilities by early May. The Company adjusted its manufacturing facilities for social distancing and implemented deep cleaning procedures. Initial truck production rates at all facilities were lower than those in effect at the time of the worldwide closure. In the fourth quarter, production rates had returned to pre-pandemic levels. Future production volumes will depend on market demand for trucks, parts availability from the Company’s suppliers and further government directives related to the COVID-19 pandemic.

Assuming no significant impacts from a resurgence of the COVID-19 pandemic, truck industry retail sales in the U.S. and Canada in

2021 are expected to be 250,000 to 280,000 units compared to 216,500 in 2020. In Europe, the 2021 truck industry registrations for over 16-tonne vehicles are expected to be 250,000 to 280,000 units compared to 230,400 in 2020. In South America, heavy-duty truck industry registrations in 2021 are projected to be 100,000 to 110,000 units as compared to 93,000 in 2020.

Parts Outlook

The Company continues to provide strong aftermarket support to enable the shipment of essential goods and services to communities around the world while following social distancing and hygiene protocols. Strengthening economies and higher truck traffic in the second half of the year resulted in increased demand for aftermarket parts as compared to the first half of the year. In 2021, PACCAR Parts sales are expected to increase 7-9% from 2020 levels. If economic conditions were to worsen, lower freight volumes could reduce the demand for replacement parts, resulting in lower parts revenues and operating results.

Financial Services Outlook

Based on the truck market outlook, average earning assets in 2021 are expected to increase 4-6% compared to 2020. Current high levels of freight tonnage, freight rates and fleet utilization are contributing to customers’ profitability and cash flow. If current freight transportation conditions decline due to weaker economic conditions, then past due accounts, truck repossessions and credit losses would likely increase from the current low levels and new business volume would likely decline.

Capital Spending and R&D Outlook

Capital investments in 2021 are expected to be $575 to $625 million, and R&D is expected to be $350 to $375 million. The Company is investing for medium- and long-term growth in aerodynamic truck models, integrated powertrains including diesel, electric, hybrid, and hydrogen fuel cell technologies, as well as advanced driver assistance and autonomous systems, connected vehicle services and next-generation manufacturing and distribution capabilities.

See the Forward-Looking Statements section of Management’s Discussion and Analysis for factors that may affect these outlooks.

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RESULTS OF OPERATIONS:

The Company’s results of operations for the years ended December 31, 2020 and 2019 are presented below. For information on the year ended December 31, 2018, refer to Part II, Item 7 in the 2019 Annual Report on Form 10-K.  

($ in millions, except per share amounts)
Year Ended December 31,		2020			2019
Net sales and revenues:
Truck	$	13,164.8		$	19,989.5
Parts		3,912.9			4,024.9
Other		76.6			105.3
Truck, Parts and Other		17,154.3			24,119.7
Financial Services		1,574.2			1,480.0
	$	18,728.5		$	25,599.7
Income (loss) before income taxes:
Truck	$	581.4		$	1,904.9
Parts		799.3			830.8
Other		18.2			(17.7	)
Truck, Parts and Other		1,398.9			2,718.0
Financial Services		223.1			298.9
Investment income		35.9			82.3
Income taxes		(359.5	)		(711.3	)
Net Income	$	1,298.4		$	2,387.9
Diluted earnings per share	$	3.74		$	6.87
After-tax return on revenues		6.9	%		9.3	%

The following provides an analysis of the results of operations for the Company’s three reportable segments - Truck, Parts and Financial Services. Where possible, the Company has quantified the impact of 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.

2020 Compared to 2019:

Truck

The Company’s Truck segment accounted for 70% of revenues in 2020 compared to 78% in 2019.

The Company’s new truck deliveries are summarized below:

Year Ended December 31,	2020	2019	% CHANGE
U.S. and Canada	73,300	117,200		(37	)
Europe	42,900	59,900		(28	)
Mexico, South America, Australia and other	17,100	21,700		(21	)
Total units	133,300	198,800		(33	)

The decrease in new truck deliveries worldwide in 2020 compared to 2019 was driven primarily by lower build rates caused by lower demand partially as a result of the COVID-19 pandemic.

Market share data discussed below is provided by third party sources and is measured by either registrations or retail sales for the

Company’s dealer network as a percentage of total registrations or retail sales depending on the geographic market. In the U.S. and

Canada, market share is based on retail sales. In Europe, market share is based primarily on registrations.

In 2020, industry retail sales in the heavy-duty market in the U.S. and Canada decreased to 216,500 units from 308,800 units in 2019. The Company’s heavy-duty truck retail market share was 30.1% in 2020 compared to 30.0% in 2019. The medium-duty market was 74,500 units in 2020 compared to 114,200 units in 2019. The Company’s medium-duty market share was 22.6% in 2020 compared to 17.2% in 2019.

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The over 16‑tonne truck market in Europe in 2020 decreased to 230,400 units from 320,200 units in 2019, and DAF’s market share was 16.3% in 2020 compared to 16.2% in 2019. The 6 to 16‑tonne market in 2020 decreased to 41,400 units from 53,600 units in 2019. DAF’s market share in the 6 to 16-tonne market in 2020 was 9.5% compared to 9.7% in 2019.

The Company’s worldwide truck net sales and revenues are summarized below:

($ in millions)
Year Ended December 31,		2020			2019		% CHANGE
Truck net sales and revenues:
U.S. and Canada	$	8,062.0		$	13,106.5			(38	)
Europe		3,419.3			4,797.6			(29	)
Mexico, South America, Australia and other		1,683.5			2,085.4			(19	)
	$	13,164.8		$	19,989.5			(34	)
Truck income before income taxes	$	581.4		$	1,904.9			(69	)
Pre-tax return on revenues		4.4	%		9.5	%

The Company’s worldwide truck net sales and revenues decreased to $13.16 billion in 2020 from $19.99 billion in 2019 due to lower truck deliveries in all markets, though primarily the U.S. and Canada and Europe. Truck segment income before income taxes and pretax return on revenues reflect the impact of lower truck unit deliveries and lower margins, driven primarily by reduced demand and the worldwide truck plant closures as a result of the COVID-19 pandemic.

The major factors for the Truck segment changes in net sales and revenues, cost of sales and revenues and gross margin between 2020 and 2019 are as follows:

	NET			COST OF
	SALES AND			SALES AND			GROSS
($ in millions)	REVENUES			REVENUES			MARGIN
2019	$	19,989.5		$	17,562.6		$	2,426.9
(Decrease) increase
Truck sales volume		(6,738.2	)		(5,504.2	)		(1,234.0	)
Average truck sales prices		(44.5	)					(44.5	)
Average per truck material, labor and other direct costs					271.5			(271.5	)
Factory overhead and other indirect costs					(200.8	)		200.8
Extended warranties, operating leases and other		(78.3	)		8.2			(86.5	)
Currency translation		36.3			34.4			1.9
Total decrease		(6,824.7	)		(5,390.9	)		(1,433.8	)
2020	$	13,164.8		$	12,171.7		$	993.1

• Truck sales volume primarily reflects lower unit deliveries in the U.S. and Canada ($5.01 billion sales and $4.05 billion cost of sales), Europe ($1.42 billion sales and $1.19 billion cost of sales) and Mexico ($254.1 million sales and $211.0 million cost of sales), due to reduced retail demand and the impact of the worldwide production suspension due to the COVID-19 pandemic.

• Average truck sales prices decreased sales by $44.5 million, primarily due to lower price realization in North America and Europe.

• Average cost per truck increased cost of sales by $271.5 million, primarily reflecting higher accruals for product support costs and increased labor costs from lower volumes and inefficiencies related to the COVID-19 pandemic.

• Factory overhead and other indirect costs decreased $200.8 million, primarily due to lower costs for labor, repair and maintenance and depreciation, partially offset by increased costs associated with the COVID-19 pandemic.

• Extended warranties, operating leases and other revenues decreased by $78.3 million primarily due to lower revenues from operating leases as a result of a decreasing portfolio and lower revenues from dealer support services, partially offset by higher revenues from extended warranty contracts. Cost of sales and revenues increased by $8.2 million primarily due to higher costs on extended warranty contracts and higher impairments and losses on used trucks in Europe, partially offset by lower costs from operating leases and dealer support services.

• 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 decline in the value of the Brazilian real and the Canadian dollar.

• Truck gross margins decreased to 7.5% in 2020 from 12.1% in 2019, primarily due to the factors noted above.

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Truck selling, general and administrative expenses (SG&A) for 2020 decreased to $210.9 million from $269.7 million in 2019. The decrease was primarily due to lower sales and marketing costs ($30.1 million), salaries and related expenses ($22.7 million) and travel expenses ($17.3 million). As a percentage of sales, Truck SG&A increased to 1.6% in 2020 from 1.3% in 2019 due to lower net sales, partially offset by lower spending.

Parts

The Company’s Parts segment accounted for 21% of revenues in 2020 compared to 16% in 2019.

($ in millions)
Year Ended December 31,	2020			2019			% CHANGE
Parts net sales and revenues:
U.S. and Canada	$	2,664.9		$	2,731.7			(2	)
Europe		896.1			908.5			(1	)
Mexico, South America, Australia and other		351.9			384.7			(9	)
	$	3,912.9		$	4,024.9			(3	)
Parts income before income taxes	$	799.3		$	830.8			(4	)
Pre-tax return on revenues		20.4	%		20.6	%

The Company’s worldwide parts net sales and revenues decreased to $3.91 billion in 2020 from $4.02 billion in 2019 due to lower sales volume, partially offset by higher prices. The decrease in Parts segment income before income taxes and pre-tax return on revenues in 2020 was primarily due to lower volume and margins. Parts income before income taxes in 2020 included a $10.2 million gain on the sale of the prior Las Vegas parts distribution facility which was replaced by a new larger facility. The gain was recorded in the second quarter in Interest and other (income), net on the Consolidated Statement of Income.

The major factors for the Parts segment changes in net sales and revenues, cost of sales and revenues and gross margin between 2020 and 2019 are as follows:

	NET SALES AND			COST OF SALES AND			GROSS
($ in millions)	REVENUES			REVENUES			MARGIN
2019	$	4,024.9		$	2,906.8		$	1,118.1
(Decrease) increase
Aftermarket parts volume		(220.1	)		(149.1	)		(71.0	)
Average aftermarket parts sales prices		96.8						96.8
Average aftermarket parts direct costs					60.8			(60.8	)
Warehouse and other indirect costs					17.8			(17.8	)
Currency translation		11.3			6.5			4.8
Total decrease		(112.0	)		(64.0	)		(48.0	)
2020	$	3,912.9		$	2,842.8		$	1,070.1

• Aftermarket parts sales volume decreased by $220.1 million and related cost of sales decreased by $149.1 million primarily due to lower demand in the U.S. and Canada.

• Average aftermarket parts sales prices increased sales by $96.8 million primarily due to higher price realization in North America.

• Average aftermarket parts direct costs increased $60.8 million due to higher material costs.

• Warehouse and other indirect costs increased $17.8 million, primarily due to higher salaries and related expenses.

• 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 Brazilian real.

• Parts gross margins in 2020 decreased to 27.3% from 27.8% in 2019 due to the factors noted above.

Parts SG&A expense for 2020 decreased to $192.7 million compared to $207.8 million in 2019 primarily due to lower salaries and related expenses, lower travel expenses and lower sales and marketing costs. As a percentage of sales, Parts SG&A decreased to 4.9% in 2020 from 5.2% in 2019, primarily due to lower spending, partially offset by lower net sales.

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Financial Services

The Company’s Financial Services segment accounted for 8% of revenues in 2020 compared to 6% in 2019.

($ in millions)
Year Ended December 31,		2020		2019	% CHANGE
New loan and lease volume:
U.S. and Canada	$	3,027.0	$	3,425.8		(12	)
Europe		1,204.1		1,349.5		(11	)
Mexico, Australia and other		787.6		857.7		(8	)
	$	5,018.7	$	5,633.0		(11	)
New loan and lease volume by product:
Loans and finance leases	$	3,975.0	$	4,277.1		(7	)
Equipment on operating lease		1,043.7		1,355.9		(23	)
	$	5,018.7	$	5,633.0		(11	)
New loan and lease unit volume:
Loans and finance leases		36,100		38,000		(5	)
Equipment on operating lease		10,700		13,700		(22	)
		46,800		51,700		(9	)
Average earning assets:
U.S. and Canada	$	9,011.3	$	8,837.7		2
Europe		3,560.2		3,547.6
Mexico, Australia and other		1,782.4		1,895.5		(6	)
	$	14,353.9	$	14,280.8		1
Average earning assets by product:
Loans and finance leases	$	9,123.8	$	8,758.8		4
Dealer wholesale financing		2,101.4		2,428.8		(13	)
Equipment on lease and other		3,128.7		3,093.2		1
	$	14,353.9	$	14,280.8		1
Revenues:
U.S. and Canada	$	785.0	$	810.1		(3	)
Europe		562.2		409.3		37
Mexico, Australia and other		227.0		260.6		(13	)
	$	1,574.2	$	1,480.0		6
Revenues by product:
Loans and finance leases	$	457.8	$	470.2		(3	)
Dealer wholesale financing		69.6		112.8		(38	)
Equipment on lease and other		1,046.8		897.0		17
	$	1,574.2	$	1,480.0		6
Income before income taxes	$	223.1	$	298.9		(25	)

New loan and lease volume was $5.02 billion in 2020 compared to $5.63 billion in 2019, primarily reflecting lower truck deliveries worldwide, partially offset by higher finance market share. PFS finance market share of new PACCAR truck sales was 28.3% in 2020 compared to 24.5% in 2019.

PFS revenues increased to $1.57 billion in 2020 from $1.48 billion in 2019. The increase was primarily due to higher used truck sales in Europe, partially offset by lower portfolio yields reflecting lower U.S. market interest rates. The effects of currency translation decreased PFS revenues by $7.3 million in 2020, primarily due to a weaker Mexican peso and Brazilian real, partially offset by a stronger euro.

PFS income before income taxes decreased to $223.1 million in 2020 from $298.9 million in 2019, primarily due to lower used truck results, lower yields and a higher provision for credit losses, partially offset by lower SG&A expenses. The effects of translating weaker foreign currencies to the U.S. dollar decreased PFS income before taxes by $9.3 million in 2020.

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Included in Financial Services “Other Assets” on the Company’s Consolidated Balance Sheets are used trucks held for sale, net of impairments, of $375.8 million at December 31, 2020 and $391.4 million at December 31, 2019. These trucks are primarily units returned from matured operating leases in the ordinary course of business, and also include trucks acquired from repossessions, through acquisitions of used trucks in trades related to new truck sales and trucks returned from residual value guarantees (RVGs).

The Company recognized losses on used trucks, excluding repossessions, of $88.2 million in 2020 compared to $57.5 million in 2019, including losses on multiple unit transactions of $38.6 million in 2020 compared to $19.1 million in 2019. Used truck losses related to repossessions, which are recognized as credit losses, were insignificant for 2020 and 2019.

The major factors for the changes in interest and fees, interest and other borrowing expenses and finance margin between 2020 and 2019 are outlined below:

($ in millions)	INTEREST AND FEES			INTEREST AND OTHER BORROWING EXPENSES			FINANCE MARGIN
2019	$	583.0		$	230.5		$	352.5
Increase (decrease)
Average finance receivables		3.0						3.0
Average debt balances					1.2			(1.2	)
Yields		(47.1	)					(47.1	)
Borrowing rates					(35.8	)		35.8
Currency translation and other		(11.5	)		(3.8	)		(7.7	)
Total decrease		(55.6	)		(38.4	)		(17.2	)
2020	$	527.4		$	192.1		$	335.3

• Average finance receivables increased $51.4 million (excluding foreign exchange effects) in 2020 as a result of retail portfolio new business volume exceeding collections, partially offset by lower dealer wholesale balances.

• Average debt balances increased $12.4 million (excluding foreign exchange effects) in 2020. The higher average debt balances reflect funding for a higher average earning assets portfolio.

• Lower portfolio yields (4.7% in 2020 compared to 5.2% in 2019) decreased interest and fees by $47.1 million. The lower portfolio yields were primarily due to lower market rates in North America.

• Lower borrowing rates (1.8% in 2020 compared to 2.2% in 2019) were primarily due to lower debt market rates in North America.

• The currency translation effects reflect a decrease in the value of foreign currencies relative to the U.S. dollar, primarily the Mexican peso and the Brazilian real.

The following table summarizes operating lease, rental and other revenues and depreciation and other expenses:

($ in millions)
Year Ended December 31,		2020		2019
Operating lease and rental revenues	$	832.0	$	831.0
Used truck sales		194.8		43.9
Insurance, franchise and other revenues		20.0		22.1
Operating lease, rental and other revenues	$	1,046.8	$	897.0
Depreciation of operating lease equipment	$	651.9	$	605.4
Vehicle operating expenses		152.4		143.8
Cost of used truck sales		200.1		45.9
Insurance, franchise and other expenses		3.6		3.1
Depreciation and other expenses	$	1,008.0	$	798.2

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The major factors for the changes in operating lease, rental and other revenues, depreciation and other expenses and lease margin between 2020 and 2019 are outlined below:

($ in millions)	OPERATING LEASE, RENTAL AND OTHER REVENUES			DEPRECIATION AND OTHER EXPENSES		LEASE MARGIN
2019	$	897.0		$	798.2	$	98.8
Increase (decrease)
Used truck sales		151.0			154.2		(3.2	)
Results on returned lease assets					28.7		(28.7	)
Average operating lease assets		(1.4	)		.9		(2.3	)
Revenue and cost per asset		(2.0	)		17.5		(19.5	)
Currency translation and other		2.2			8.5		(6.3	)
Total increase (decrease)		149.8			209.8		(60.0	)
2020	$	1,046.8		$	1,008.0	$	38.8

• A higher sales volume of used trucks received on trade and upon RVG contract expiration increased operating lease, rental and other revenues by $151.0 million and increased depreciation and other expenses by $154.2 million.

• Results on returned lease assets increased depreciation and other expenses by $28.7 million primarily due to higher impairments in the U.S. and Europe and higher losses on sales of returned lease units in the U.S.

• Average operating lease assets increased $9.8 million (excluding foreign exchange effects), which increased related depreciation and other expenses by $.9 million. Revenues decreased by $1.4 million due to lower rental income per unit in Europe.

• Revenue per asset decreased $2.0 million primarily due to lower fleet utilization. Cost per asset increased $17.5 million due to higher operating lease impairments in Europe, higher depreciation expense and higher vehicle operating expenses.

• The currency translation effects reflect an increase in the value of foreign currencies relative to the U.S. dollar, primarily the euro, partially offset by the Mexican peso.

Financial Services SG&A expense decreased to $122.2 million in 2020 from $137.0 million in 2019. The decrease was due to lower salaries and related expenses as a result of cost controls and lower travel expenses. As a percentage of revenues, Financial Services SG&A decreased to 7.8% in 2020 from 9.3% in 2019.

The following table summarizes the provision for losses on receivables and net charge-offs:

	2020				2019
($ in millions)	PROVISION FOR LOSSES ON RECEIVABLES		NET CHARGE-OFFS		PROVISION FOR LOSSES ON RECEIVABLES			NET CHARGE-OFFS
U.S. and Canada	$	16.2	$	13.8	$	13.5		$	14.0
Europe		5.1		3.2		(3.2	)		(.8	)
Mexico, Australia and other		7.5		5.3		5.1			4.2
	$	28.8	$	22.3	$	15.4		$	17.4

The provision for losses on receivables increased to $28.8 million in 2020 from $15.4 million in 2019, primarily driven by growth in the loans and finance leases portfolio and challenging economic conditions related to the COVID-19 pandemic. In addition, the provision for losses in 2019 also included recoveries on charged-off accounts in Europe.

The Company modifies loans and finance leases as a normal part of its Financial Services operations. 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. Modifications for credit reasons are changes to contract terms for customers considered to be in financial difficulty. 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. When the

23

Company modifies a loan or finance lease for credit reasons and grants a concession, the modification is classified as a troubled debt restructuring (TDR).

The post-modification balances of accounts modified during the years ended December 31, 2020 and 2019 are summarized below:

	2020					2019
($ in millions)	AMORTIZED COST BASIS		% OF TOTAL PORTFOLIO*			AMORTIZED COST BASIS		% OF TOTAL PORTFOLIO*
Commercial	$	244.4		2.5	%	$	316.4		3.5	%
Insignificant delay		2,545.3		26.0	%		83.2		.9	%
Credit - no concession		120.2		1.2	%		23.3		.3	%
Credit - TDR		74.7		.8	%		2.5
	$	2,984.6		30.5	%	$	425.4		4.7	%

* Amortized cost basis immediately after modification as a percentage of the year-end retail portfolio balance.

In 2020, total modification activity significantly increased compared to 2019. The decrease in modifications for Commercial reasons primarily reflects lower volumes of refinancing. The increase in modifications for Insignificant delay reflects fleet customers requesting payment relief for up to three months related to the COVID-19 pandemic. The increase in modifications for Credit - no concession is primarily due to higher volumes of refinancing and requests for payment relief in Europe, the U.S. and Mexico. Credit - TDR modifications increased to $74.7 million in 2020 from $2.5 million in 2019 primarily due to two fleet customers in the U.S. and four fleet customers in Mexico.

The following table summarizes the Company’s 30+ days past due accounts:

At December 31,	2020		2019
Percentage of retail loan and lease accounts 30+ days past due:
U.S. and Canada	.1	%	.4	%
Europe	.9	%	.7	%
Mexico, Australia and other	1.7	%	2.0	%
Worldwide	.5	%	.7	%

Accounts 30+ days past due decreased to .5% at December 31, 2020 from .7% at December 31, 2019. The Company continues to focus on maintaining low past due balances.

When the Company modifies a 30+ days past due account, the customer is then generally considered current under the revised contractual terms. The Company modified $18.6 million and $1.7 million of accounts worldwide during the fourth quarter of 2020 and the fourth quarter of 2019, respectively, which were 30+ days past due and became current at the time of modification. 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,	2020		2019
Pro forma percentage of retail loan and lease accounts 30+ days past due:
U.S. and Canada	.1	%	.4	%
Europe	1.5	%	.7	%
Mexico, Australia and other	1.9	%	2.1	%
Worldwide	.6	%	.7	%

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, 2020 and 2019. The effect on the allowance for credit losses from such modifications was not significant at December 31, 2020 and 2019.

The Company’s 2020 and 2019 annualized pre-tax return on average assets for Financial Services was 1.4% and 2.0%, respectively.

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Other

Other includes the winch business as well as sales, income and expenses not attributable to a reportable segment. Other also includes non-service cost components of pension expense and a portion of corporate expense. Other sales represent less than 1% of consolidated net sales and revenues for 2020 and 2019. Other SG&A decreased to $55.6 million in 2020 from $84.0 million in 2019 primarily due to lower compensation costs reflecting stringent cost controls and lower travel expenses.

Other income (loss) before tax was $18.2 million in 2020 compared to $(17.7) million in 2019. The income in 2020 compared to loss in 2019 was primarily due to lower salaries and related expenses, lower expected costs to resolve certain environmental matters and lower travel expenses, partially offset by lower results from the winch business.

Investment income decreased to $35.9 million in 2020 from $82.3 million in 2019, primarily due to lower yields on U.S. investments due to lower market interest rates.

Income Taxes

In 2020, the effective tax rate was 21.7% compared to 23.0% in 2019. The lower effective tax rate in 2020 was primarily due to the change in mix of income generated in jurisdictions with lower tax rates in 2020 as compared to 2019.

($ in millions)
Year Ended December 31,		2020			2019
Domestic income before taxes	$	1,122.9		$	2,201.1
Foreign income before taxes		535.0			898.1
Total income before taxes	$	1,657.9		$	3,099.2
Domestic pre-tax return on revenues		10.8	%		14.5	%
Foreign pre-tax return on revenues		6.4	%		8.6	%
Total pre-tax return on revenues		8.9	%		12.1	%

In 2020, both domestic and foreign income before income taxes and pre-tax return on revenues decreased primarily due to lower revenues and lower margins from truck operations.

LIQUIDITY AND CAPITAL RESOURCES:

($ in millions)
At December 31,		2020		2019
Cash and cash equivalents	$	3,539.6	$	4,175.1
Marketable debt securities		1,429.0		1,162.1
	$	4,968.6	$	5,337.2

The Company’s total cash and marketable debt securities at December 31, 2020 decreased $368.6 million from the balances at December 31, 2019 due to a decrease in cash and cash equivalents, primarily reflecting $1,239.8 million of dividends paid during 2020, partially offset by other cash flows as described below.

25

The change in cash and cash equivalents is summarized below:

($ in millions)
Year Ended December 31,		2020			2019
Operating activities:
Net income	$	1,298.4		$	2,387.9
Net income items not affecting cash		1,097.7			1,190.1
Pension contributions		(184.9	)		(35.7	)
Changes in operating assets and liabilities, net		776.0			(682.0	)
Net cash provided by operating activities		2,987.2			2,860.3
Net cash used in investing activities		(1,875.8	)		(2,207.4	)
Net cash (used in) provided by financing activities		(1,808.5	)		83.4
Effect of exchange rate changes on cash		61.6			2.9
Net (decrease) increase in cash and cash equivalents		(635.5	)		739.2
Cash and cash equivalents at beginning of the year		4,175.1			3,435.9
Cash and cash equivalents at end of the year	$	3,539.6		$	4,175.1

Operating activities: Cash provided by operations increased by $126.9 million to $2.99 billion in 2020 from $2.86 billion in 2019. The increase reflects $1,391.4 million from wholesale receivables on new trucks as there was a cash inflow of $871.2 million in 2020 versus a cash outflow of $520.2 million in 2019. Higher operating cash flows reflect an increase of $144.2 million from used truck inventories as there was a cash inflow in 2020 ($65.1 million) compared to a cash outflow in 2019 ($79.1 million) and $194.1 million from accounts receivable as collections exceeded sales in 2020 ($121.8 million) compared to sales exceeding collections in 2019 ($72.3 million). The higher operating cash inflows were partially offset by lower net income of $1,089.5 million and a higher outflow for product support liabilities of $255.7 million as payments exceeded accruals by $89.1 million in 2020 and accruals exceeded payments by $166.6 million in 2019. Additionally, there were higher cash outflows for pension contributions of $149.2 million and higher net purchases of inventories of $72.8 million as there were $48.2 million in net purchases in 2020 and $24.6 million in net inventory reductions in 2019.

Investing activities:  Cash used in investing activities decreased by $331.6 million to $1,875.8 million in 2020 from $2,207.4 million in 2019. Lower net cash used in investing activities reflects lower cash used in the acquisition of equipment for operating leases of $308.8 million. In addition, there was $101.0 million of higher proceeds from dealer wholesale receivables on used trucks as cash receipts exceeded cash outflows in 2020 ($53.3 million) compared to originations exceeding cash receipts in 2019 ($47.7 million). The lower cash usage was partially offset by higher net purchases of marketable securities of $109.5 million in 2020 compared to 2019.

Financing activities:  Cash used in financing activities increased $1,891.9 million to $1,808.5 million in 2020 compared to cash provided by financing activities of $83.4 million in 2019. In 2020, the Company issued $2,150.1 million of term debt, repaid term debt of $1,898.5 million and decreased its outstanding commercial paper and short-term bank loans by $831.9 million. In 2019, the Company issued $2,504.3 million of term debt, repaid term debt of $1,790.0 million and increased its outstanding commercial paper and short-term bank loans by $557.1 million. This resulted in cash used by borrowing activities of $580.3 million in 2020, $1,851.7 million lower than the cash provided by borrowing activities of $1,271.4 million in 2019. The Company paid $1,239.8 million in dividends in 2020 compared to $1,138.6 million in 2019 due to a higher extra dividend paid in January 2020. In addition, the Company repurchased .7 million shares of common stock for $42.1 million in 2020 compared to the purchase of 1.7 million shares for $110.2 million in 2019.

Credit Lines and Other:

The Company has line of credit arrangements of $3.52 billion, of which $3.29 billion were unused at December 31, 2020. Included in these arrangements are $3.00 billion of committed bank facilities, of which $1.00 billion expires in June 2021, $1.00 billion expires in June 2023 and $1.00 billion expires in June 2024. The Company intends to extend or replace these credit facilities on or before expiration to maintain facilities of similar amounts and duration. 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, 2020.

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, 2020, the Company has repurchased $110.0 million of shares under the December 4, 2018 authorization. The Company has temporarily suspended its repurchases as a result of the economic uncertainty related to the COVID-19 pandemic.

26

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 2020 were $558.8 million compared to $734.0 million in 2019. Over the past decade, the Company’s combined investments in worldwide capital projects and R&D totaled $7.20 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.

Capital investments in 2021 are expected to be $575 to $625 million, and R&D is expected to be $350 to $375 million. The Company is investing for medium- and long-term growth in aerodynamic truck models, integrated powertrains including diesel, electric, hybrid, and hydrogen fuel cell technologies, as well as advanced driver assistance and autonomous systems, connected vehicle services and next-generation manufacturing and distribution capabilities.

Financial Services

The Company funds its financial services activities primarily from collections on existing finance receivables and borrowings in the capital markets. 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 2018, the Company’s U.S. finance subsidiary, PACCAR Financial Corp. (PFC), filed a shelf registration under the Securities Act of 1933. The total amount of medium-term notes outstanding for PFC as of December 31, 2020 was $6.00 billion. In February 2021, PFC issued $400.0 million of medium-term notes under this registration. The registration expires in November 2021 and does not limit the principal amount of debt securities that may be issued during that period.

As of December 31, 2020, the Company’s European finance subsidiary, PACCAR Financial Europe, had €1.60 billion 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 replaced an expiring program in the second quarter of 2020 and is renewable annually through the filing of a new listing.

In April 2016, PACCAR Financial Mexico registered a 10.00 billion peso medium-term note and commercial paper program with the Comision Nacional Bancaria y de Valores. The registration expires in April 2021 and limits the amount of commercial paper (up to one year) to 5.00 billion pesos. At December 31, 2020, 6.84 billion pesos were available for issuance.

In August 2018, the Company’s Australian subsidiary, PACCAR Financial Pty. Ltd. (PFPL), registered 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 as of December 31, 2020 was 450.0 million Australian dollars.

The Company believes its cash balances and investments, collections on existing finance receivables, committed bank facilities, and current investment-grade credit ratings of A+/A1 will continue to provide it with sufficient resources and access to capital markets at competitive interest rates and therefore contribute to the Company maintaining its liquidity and financial stability. In the event of a decrease in the Company’s credit ratings or a disruption in the financial markets, the Company may not be able to refinance its maturing debt in the financial markets. 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.

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Commitments

The following summarizes the Company’s contractual cash commitments at December 31, 2020:

	MATURITY
($ in millions)	WITHIN 1 YEAR		1-3 YEARS		3-5 YEARS		MORE THAN 5 YEARS		TOTAL
Borrowings*	$	5,396.0	$	4,604.4	$	865.6			$	10,866.0
Purchase obligations		91.6		75.4		.4				167.4
Interest on debt**		114.6		103.6		15.4				233.6
Lease liabilities		14.3		16.8		5.7	$	6.0		42.8
Other obligations		37.6		5.5		1.1				44.2
	$	5,654.1	$	4,805.7	$	888.2	$	6.0	$	11,354.0

* Commercial paper included in borrowings is at par value.

** Interest on floating-rate debt is based on the applicable market rates at December 31, 2020.

Total cash commitments for borrowings and interest on term debt were $11.10 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. 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 to purchase energy.

The Company’s other commitments include the following at December 31, 2020:

	COMMITMENT EXPIRATION
($ in millions)	WITHIN 1 YEAR		1-3 YEARS		3-5 YEARS		MORE THAN 5 YEARS		TOTAL
Loan and lease commitments	$	823.4							$	823.4
Residual value guarantees		633.0	$	709.2	$	158.7	$	42.2		1,543.1
Letters of credit		9.3		.1		.2		.7		10.3
	$	1,465.7	$	709.3	$	158.9	$	42.9	$	2,376.8

Loan and lease commitments are for funding new retail loan and lease contracts. Residual value guarantees represent the Company’s commitment to acquire trucks at a guaranteed value if the customer decides to return the truck at a specified date in the future.

IMPACT OF ENVIRONMENTAL MATTERS:

The Company, its competitors and industry in general are subject to various domestic and foreign requirements relating to the environment. The Company believes its policies, practices and procedures are designed to prevent unreasonable risk of environmental damage and that its handling, use and disposal of hazardous or toxic substances have been in accordance with environmental laws and regulations in effect at the time such use and disposal occurred.

The Company is involved in various stages of investigations and cleanup actions in different countries related to environmental matters. In certain of these matters, the Company has been designated as a “potentially responsible party” by domestic and foreign environmental agencies. 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, 2020 and 2019 were $1.9 million and $1.3 million, respectively. While the timing and amount of the ultimate costs associated with future environmental cleanup cannot be determined, management expects that these matters will not have a significant effect on the Company’s consolidated cash flow, liquidity or financial condition.

28

CRITICAL ACCOUNTING POLICIES:

The Company’s significant accounting policies are disclosed in Note A of the consolidated financial statements. In the preparation of the Company’s financial statements, in accordance with U.S. generally accepted accounting principles, management uses estimates and makes judgments and assumptions that affect asset and liability values and the amounts reported as income and expense during the periods presented. The following are accounting policies which, in the opinion of management, are particularly sensitive and which, if actual results are different from estimates used by management, may have a material impact on the financial statements.

Operating Leases

Trucks sold pursuant to agreements accounted for as operating leases are disclosed in Note F of the consolidated financial statements. In determining its estimate of the residual value of such vehicles, the Company considers the length of the lease term, the truck model, the expected usage of the truck and anticipated market demand. Operating lease terms generally range from three to five years. The resulting residual values on operating leases generally range between 30% and 70% of the original equipment cost. If the sales price of a truck at the end of the term of the agreement differs from the Company’s estimated residual value, a gain or loss will result.

Future market conditions, changes in government regulations and other factors outside the Company’s control could impact the ultimate sales price of trucks returned under these contracts. Residual values are reviewed regularly and adjusted if market conditions warrant. A decrease in the estimated equipment residual values would increase annual depreciation expense over the remaining lease term.

During 2020 and 2019, 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 $99.9 million and $65.8 million, respectively.

At December 31, 2020, 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 $2.42 billion. 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 $80.7 million in 2021, $70.6 in 2022, $55.6 in 2023, $22.6 in 2024 and $12.9 in 2025 and thereafter.  

Allowance for Credit Losses

The allowance for credit losses related to the Company’s loans and finance leases is disclosed in Note E of the consolidated financial statements. The Company has developed a systematic methodology for determining the allowance for credit losses for its two portfolio segments, retail and wholesale. The retail segment consists of retail loans and finance leases, net of unearned interest. The wholesale segment consists of truck inventory financing loans to dealers that are collateralized by trucks and other collateral. The wholesale segment generally has less risk than the retail segment. Wholesale receivables generally are shorter in duration than retail receivables, and the Company requires periodic reporting of the wholesale dealer’s financial condition, conducts periodic audits of the trucks being financed and in many cases obtains guarantees or other security such as dealership assets. In determining the allowance for credit losses, retail loans and finance leases are evaluated together since they relate to a similar customer base, their contractual terms require regular payment of principal and interest, generally over three to five years, and they are secured by the same type of collateral. The allowance for credit losses consists of both specific and general reserves.

The Company individually evaluates certain finance receivables for impairment. Finance receivables that are evaluated individually for impairment consist of all wholesale accounts and certain large retail accounts with past due balances or otherwise determined to be at a higher risk of loss. A finance receivable is impaired if it is considered probable the Company will be unable to collect all contractual interest and principal payments as scheduled. In addition, all retail loans and leases which have been classified as TDRs and all customer accounts over 90 days past due are considered impaired. Generally, impaired accounts are on non-accrual status. Impaired accounts classified as TDRs which have been performing for 90 consecutive days are placed on accrual status if it is deemed probable that the Company will collect all principal and interest payments.

Impaired receivables are generally considered collateral dependent. Large balance retail and all wholesale impaired receivables are individually evaluated to determine the appropriate reserve for losses. The determination of reserves for large balance impaired receivables considers the fair value of the associated collateral. When the underlying collateral fair value exceeds the Company’s amortized cost basis, no reserve is recorded. Small balance impaired receivables with similar risk characteristics are evaluated as a separate pool to determine the appropriate reserve for losses using the historical loss and economic forecasts information discussed below.

29

The Company evaluates finance receivables that are not individually impaired and share similar risk characteristics on a collective basis and determines the general allowance for credit losses for both retail and wholesale receivables based on historical loss information, using past due account data, current market conditions, and expected changes in future macroeconomic conditions that affect collectability. Historical credit loss information provides relevant information of expected credit losses. The historical information used includes assumptions regarding the likelihood of collecting current and past due accounts, repossession rates, and the recovery rate on the underlying collateral based on used truck values and other pledged collateral or recourse.

The Company has developed a range of loss estimates for each of its country portfolios based on historical experience, taking into account loss frequency and severity in both strong and weak truck market conditions. A projection is made of the range of estimated credit losses inherent in the portfolio from which an amount is determined based on current market conditions and other factors impacting the creditworthiness of the Company’s borrowers and their ability to repay. Adjustments to historical loss information are made for changes in forecasted economic conditions that are specific to the industry and markets in which the Company conducts business. The Company utilizes economic forecasts from third party sources and determines expected losses based on historical experience under similar market conditions. After determining the appropriate level of the allowance for credit losses, a provision for losses on finance receivables is charged to income as necessary to reflect management’s estimate of expected credit losses, net of recoveries, inherent in the portfolio.

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 30% and 70%. Over the past two years, the Company’s year-end 30+ days past due accounts have ranged between .5% and .7% 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 2 to 37 basis points of receivables. At December 31, 2020, 30+ days past dues were .5%. If past dues were 100 basis points higher or 1.5% as of December 31, 2020, the Company’s estimate of credit losses would likely have increased by a range of $2 to $36 million depending on the extent of the past dues, the estimated value of the collateral as compared to amounts owed and general economic factors.

Product Warranty

Product warranty is disclosed in Note I of the consolidated financial statements. The expenses related to product warranty are estimated and recorded at the time products are sold based on historical and current data and reasonable expectations for the future regarding the frequency and cost of warranty claims, net of recoveries. 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 1.7% and 2.2%. If the 2020 warranty expense had been .2% higher as a percentage of net sales and revenues in 2020, warranty expense would have increased by approximately $34 million.

FORWARD-LOOKING STATEMENTS:

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include statements relating to future results of operations or financial position and any other statement that does not relate to any historical or current fact. Such statements are based on currently available operating, financial and other information and are subject to risks and uncertainties that may affect actual results. 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; labor disruptions; shortages of commercial truck drivers; increased warranty costs; pandemics; litigation, including EC settlement-related claims; or legislative and governmental regulations. A more detailed description of these and other risks is included under the heading Part I, Item 1A, “Risk Factors” and in Note L in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.

30

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Currencies are presented in millions for the market risks and derivative instruments sections below.

Interest-Rate Risks - See Note P for a description of the Company’s hedging programs and exposure to interest rate fluctuations. The 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	2020			2019
CONSOLIDATED:
Assets
Cash equivalents and marketable debt securities	$	(26.9	)	$	(19.5	)
FINANCIAL SERVICES:
Assets
Fixed rate loans		(105.7	)		(94.4	)
Liabilities
Fixed rate term debt		124.3			113.3
Interest-rate swaps		14.2			13.9
Total	$	5.9		$	13.3

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 foreign currency exchange rates would be a loss of $155.2 related to contracts outstanding at December 31, 2020, compared to a loss of $128.0 at December 31, 2019. These amounts would be largely offset by changes in the values of the underlying hedged exposures.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

CONSOLIDATED STATEMENTS OF INCOME

Year Ended December 31,	2020			2019			2018
	(millions, except per share data)
TRUCK, PARTS AND OTHER:
Net sales and revenues	$	17,154.3		$	24,119.7		$	22,138.6
Cost of sales and revenues		15,076.4			20,555.6			18,925.0
Research and development		273.9			326.6			306.1
Selling, general and administrative		459.2			561.5			524.9
Interest and other (income), net		(54.1	)		(42.0	)		(60.8	)
		15,755.4			21,401.7			19,695.2
Truck, Parts and Other Income Before Income Taxes		1,398.9			2,718.0			2,443.4
FINANCIAL SERVICES:
Interest and fees		527.4			583.0			497.7
Operating lease, rental and other revenues		1,046.8			897.0			859.4
Revenues		1,574.2			1,480.0			1,357.1
Interest and other borrowing expenses		192.1			230.5			186.9
Depreciation and other expenses		1,008.0			798.2			728.0
Selling, general and administrative		122.2			137.0			119.8
Provision for losses on receivables		28.8			15.4			16.5
		1,351.1			1,181.1			1,051.2
Financial Services Income Before Income Taxes		223.1			298.9			305.9
Investment income		35.9			82.3			60.9
Total Income Before Income Taxes		1,657.9			3,099.2			2,810.2
Income taxes		359.5			711.3			615.1
Net Income	$	1,298.4		$	2,387.9		$	2,195.1
Net Income Per Share
Basic	$	3.74		$	6.88		$	6.25
Diluted	$	3.74		$	6.87		$	6.24
Weighted Average Number of Common Shares Outstanding
Basic		346.8			346.9			351.0
Diluted		347.4			347.5			351.8

See notes to consolidated financial statements.

32

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year Ended December 31,		2020			2019			2018
	(millions)
Net income	$	1,298.4		$	2,387.9		$	2,195.1
Other comprehensive income:
Unrealized (losses) gains on derivative contracts
Net (loss) gain arising during the period		(105.3	)		(76.1	)		121.6
Tax effect		26.9			19.1			(30.7	)
Reclassification adjustment		87.6			51.7			(121.5	)
Tax effect		(23.1	)		(12.0	)		31.0
		(13.9	)		(17.3	)		.4
Unrealized gains on marketable debt securities
Net holding gain		13.6			11.6			.2
Tax effect		(3.3	)		(2.9	)		(.1	)
Reclassification adjustment		(2.4	)		(.4	)		(.2	)
Tax effect		.6			.1			.1
		8.5			8.4
Pension plans
Net loss arising during the period		(132.4	)		(74.8	)		(114.0	)
Tax effect		28.4			18.0			27.2
Reclassification adjustment		57.3			21.9			36.7
Tax effect		(13.7	)		(5.0	)		(8.7	)
		(60.4	)		(39.9	)		(58.8	)
Foreign currency translation gain (loss)		115.6			47.2			(213.3	)
Net other comprehensive income (loss)		49.8			(1.6	)		(271.7	)
Comprehensive Income	$	1,348.2		$	2,386.3		$	1,923.4

See notes to consolidated financial statements.

33

CONSOLIDATED BALANCE SHEETS

December 31,	2020		2019
	(millions)
ASSETS
TRUCK, PARTS AND OTHER:
Current Assets
Cash and cash equivalents	$	3,405.0	$	4,007.3
Trade and other receivables, net (allowance for losses: 2020 - $.6, 2019 - $.6)		1,197.5		1,306.1
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0;    allowance for credit losses: none)		1,429.0		1,162.1
Inventories, net		1,221.9		1,153.2
Other current assets		515.6		388.0
Total Truck, Parts and Other Current Assets		7,769.0		8,016.7
Equipment on operating leases, net		421.9		545.5
Property, plant and equipment, net		3,270.4		2,883.8
Other noncurrent assets, net		998.9		843.7
Total Truck, Parts and Other Assets		12,460.2		12,289.7
FINANCIAL SERVICES:
Cash and cash equivalents		134.6		167.8
Finance and other receivables, net (allowance for losses: 2020 - $127.0, 2019 - $112.4)		11,820.7		12,086.0
Equipment on operating leases, net		3,162.8		3,102.6
Other assets		681.7		715.0
Total Financial Services Assets		15,799.8		16,071.4
	$	28,260.0	$	28,361.1

34

CONSOLIDATED BALANCE SHEETS

December 31,		2020			2019
	(millions)
LIABILITIES AND STOCKHOLDERS' EQUITY
TRUCK, PARTS AND OTHER:
Current Liabilities
Accounts payable, accrued expenses and other	$	3,413.9		$	3,194.2
Dividend payable		242.6			796.5
Total Truck, Parts and Other Current Liabilities		3,656.5			3,990.7
Residual value guarantees and deferred revenues		457.4			587.3
Other liabilities		1,487.2			1,435.1
Total Truck, Parts and Other Liabilities		5,601.1			6,013.1
FINANCIAL SERVICES:
Accounts payable, accrued expenses and other		561.0			629.0
Commercial paper and bank loans		3,344.4			4,110.2
Term notes		7,508.9			7,112.5
Deferred taxes and other liabilities		854.6			790.2
Total Financial Services Liabilities		12,268.9			12,641.9
STOCKHOLDERS' EQUITY:
Preferred stock, no par value - authorized 1.0 million shares, none issued
Common stock, $1 par value - authorized 1.2 billion shares;    issued 346.6 million and 346.3 million shares		346.6			346.3
Additional paid-in capital		88.5			61.4
Retained earnings		11,005.2			10,398.5
Accumulated other comprehensive loss		(1,050.3	)		(1,100.1	)
Total Stockholders’ Equity		10,390.0			9,706.1
	$	28,260.0		$	28,361.1

See notes to consolidated financial statements.

35

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,	2020			2019			2018
	(millions)
OPERATING ACTIVITIES:
Net Income	$	1,298.4		$	2,387.9		$	2,195.1
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization:
Property, plant and equipment		249.6			322.2			337.6
Equipment on operating leases and other		799.4			755.1			716.5
Provision for losses on financial services receivables		28.8			15.4			16.5
Deferred taxes		(.5	)		70.8			17.5
Other, net		20.4			26.6			35.1
Pension contributions		(184.9	)		(35.7	)		(88.9	)
Change in operating assets and liabilities:
Decrease (increase) in assets other than cash and cash equivalents:
Receivables:
Trade and other receivables		121.8			(72.3	)		(299.1	)
Wholesale receivables on new trucks		871.2			(520.2	)		(512.3	)
Inventories		(48.2	)		24.6			(332.7	)
Other assets, net		(133.8	)		(365.4	)		(187.0	)
(Decrease) increase in liabilities:
Accounts payable and accrued expenses		(53.6	)		(27.6	)		528.9
Residual value guarantees and deferred revenues		(127.8	)		(179.7	)		275.0
Other liabilities, net		146.4			458.6			290.1
Net Cash Provided by Operating Activities		2,987.2			2,860.3			2,992.3
INVESTING ACTIVITIES:
Originations of retail loans and finance leases		(3,917.3	)		(4,081.8	)		(3,858.9	)
Collections on retail loans and finance leases		3,252.0			3,388.8			2,914.0
Net decrease (increase) in wholesale receivables on used equipment		53.3			(47.7	)		(.9	)
Purchases of marketable debt securities		(842.4	)		(850.6	)		(615.9	)
Proceeds from sales and maturities of marketable debt securities		597.8			715.5			931.5
Payments for property, plant and equipment		(550.4	)		(574.0	)		(457.6	)
Acquisitions of equipment for operating leases		(1,088.0	)		(1,396.8	)		(1,494.7	)
Proceeds from asset disposals		601.9			638.1			653.7
Other, net		17.3			1.1			(1.9	)
Net Cash Used in Investing Activities		(1,875.8	)		(2,207.4	)		(1,930.7	)
FINANCING ACTIVITIES:
Payments of cash dividends		(1,239.8	)		(1,138.6	)		(804.3	)
Purchases of treasury stock		(42.1	)		(110.2	)		(354.4	)
Proceeds from stock compensation transactions		53.7			60.8			19.3
Net (decrease) increase in commercial paper, short-term bank loans and other		(831.9	)		557.1			625.9
Proceeds from term debt		2,150.1			2,504.3			2,339.9
Payments on term debt		(1,898.5	)		(1,790.0	)		(1,755.3	)
Net Cash  (Used in) Provided by Financing Activities		(1,808.5	)		83.4			71.1
Effect of exchange rate changes on cash		61.6			2.9			(61.5	)
Net (Decrease) Increase in Cash and Cash Equivalents		(635.5	)		739.2			1,071.2
Cash and cash equivalents at beginning of year		4,175.1			3,435.9			2,364.7
Cash and cash equivalents at end of year	$	3,539.6		$	4,175.1		$	3,435.9

See notes to consolidated financial statements.

36

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

December 31,		2020			2019			2018
	(millions, except per share data)
COMMON STOCK, $1 PAR VALUE:
Balance at beginning of year	$	346.3		$	346.6		$	351.8
Treasury stock retirement		(.7	)		(1.7	)		(5.8	)
Stock compensation		1.0			1.4			.6
Balance at end of year		346.6			346.3			346.6
ADDITIONAL PAID-IN CAPITAL:
Balance at beginning of year		61.4			69.4			123.2
Treasury stock retirement		(41.4	)		(85.7	)		(88.3	)
Stock compensation and tax benefit		68.5			77.7			34.5
Balance at end of year		88.5			61.4			69.4
TREASURY STOCK, AT COST:
Balance at beginning of year
Purchases, shares: 2020 - .71; 2019 - 1.68; 2018 - 5.85		(42.1	)		(110.2	)		(354.4	)
Retirements		42.1			110.2			354.4
Balance at end of year
RETAINED EARNINGS:
Balance at beginning of year		10,398.5			9,275.4			8,369.1
Net income		1,298.4			2,387.9			2,195.1
Cash dividends declared on common stock,    per share: 2020 - $1.98; 2019 - $3.58; 2018 - $3.09		(687.1	)		(1,242.0	)		(1,078.8	)
Treasury stock retirement					(22.8	)		(260.3	)
Cumulative effect of change in accounting principles		(4.6	)					50.3
Balance at end of year		11,005.2			10,398.5			9,275.4
ACCUMULATED OTHER COMPREHENSIVE LOSS:
Balance at beginning of year		(1,100.1	)		(1,098.5	)		(793.6	)
Other comprehensive income (loss)		49.8			(1.6	)		(271.7	)
Reclassifications to retained earnings in accordance with ASU 2018-02								(33.2	)
Balance at end of year		(1,050.3	)		(1,100.1	)		(1,098.5	)
Total Stockholders’ Equity	$	10,390.0		$	9,706.1		$	8,592.9

See notes to consolidated financial statements.

37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

A. SIGNIFICANT ACCOUNTING POLICIES

Description of Operations: PACCAR Inc (the Company or PACCAR) is a multinational company operating in three principal segments: (1) the Truck segment includes the design and manufacture of high-quality, light-, medium- and heavy-duty commercial trucks; (2) the Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles; and (3) the Financial Services segment (PFS) 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. PACCAR’s sales and revenues are derived primarily from North America and Europe. The Company also operates in Australia and Brasil and sells trucks and parts to customers in Asia, Africa, the Middle East and South America.

Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned domestic and foreign subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.

Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue Recognition:

Truck, Parts and Other: The Company enters into sales contracts with customers associated with purchases of the Company’s products and services including trucks, parts, product support, and other related services. Generally, the Company recognizes revenue for the amount of consideration it will receive for delivering a product or service to a customer. Revenue is recognized when the customer obtains control of the product or receives benefits of the service. The Company excludes sales taxes, value added taxes and other related taxes assessed by government agencies from revenue. There are no significant financing components included in product or services revenue since generally customers pay shortly after the products or services are transferred. In the Truck and Parts segment, when the Company grants extended payment terms on selected receivables and charges interest, interest income is recognized when earned.

The Company recognizes truck and parts sales as revenue when control of the products is transferred to customers which generally occurs upon shipment, except for certain truck sales which are subject to a residual value guarantee (RVG) by the Company. The standard payment term for trucks and aftermarket parts is typically within 30 days, but the Company may grant extended payment terms on selected receivables. The Company recognizes revenue for the invoice amount adjusted for estimated sales incentives and returns. Sales incentives and returns are estimated based on historical experience and are adjusted to current period revenue when the most likely amount of consideration the Company expects to receive changes or becomes fixed. Truck and part sales include a standard product warranty which is included in cost of sales. The Company has elected to treat delivery services as a fulfillment activity with revenues recognized when the customer obtains control of the product. Delivery revenue is included in revenues and the related costs are included in cost of sales. As a practical expedient, the Company is not disclosing truck order backlog, as a significant majority of the backlog has a duration of less than one year.

Truck sales with RVGs that allow customers the option to return their truck are accounted for as a sale when the customer does not have an economic incentive to return the truck to the Company, or as an operating lease when the customer does have an economic incentive to return the truck. The estimate of customers’ economic incentive to return the trucks is based on an analysis of historical guaranteed buyback value and estimated market value. When truck sales with RVGs are accounted for as a sale, revenue is recognized when the truck is transferred to the customer less an amount for expected returns. Expected return rates are estimated by using a historical weighted average return rate over a seven-year period. The estimated value of the truck assets to be returned and the related return liabilities at December 31, 2020 were $627.9 and $664.1, respectively, compared to $473.0 and $503.4 at December 31, 2019, respectively. The Company’s total commitment to acquire trucks at a guaranteed value for contracts accounted for as a sale was $1,184.7 at December 31, 2020.

Revenues from extended warranties, operating leases and other include optional extended warranty and repair and maintenance (R&M) service contracts which can be purchased for periods generally ranging up to five years. The Company defers revenue based on stand-alone observable selling prices when it receives payments in advance and generally recognizes the revenue on a straight-line basis over the warranty or R&M contract periods. See Note I, Product Support Liabilities, in the Notes to the Consolidated Financial Statements for further information. Also included are truck sales with an RVG accounted for as an operating lease. A liability is created for the residual value obligation with the remainder of the proceeds recorded as deferred revenue. The deferred revenue is recognized on a straight-line basis over the guarantee period, which typically ranges from three to five years. Total operating lease income from truck sales with RVGs for the years ended December 31, 2020, 2019 and 2018 was $104.2, $159.7 and $152.6, respectively.

38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

Aftermarket parts sales allow for returns which are estimated at the time of sale based on historical data. At December 31, 2020, the estimated value of the returned goods asset and the related return liability were $62.2 and $142.0, respectively, compared to $56.3 and $126.3 at December 31, 2019, respectively. Parts dealer services and other revenues are recognized as services are performed.     

Revenue from winch sales and other is primarily derived from the industrial winch business. Winch sales are recognized when the product is transferred to a customer, which generally occurs upon shipment. Also within this category are other revenues not attributable to a reportable segment.

Financial Services: The Company’s Financial Services segment products include loans to customers collateralized by the vehicles being financed, finance leases to lease equipment to retail customers and dealers, dealer wholesale financing which includes floating-rate wholesale loans to PACCAR dealers for new and used trucks, and operating leases which include rentals on Company owned equipment. Interest income from finance and other receivables is recognized using the interest method. Certain loan origination costs are deferred and amortized to interest income over the expected life of the contracts using the straight-line method which approximates the interest method.

Operating lease rental revenue is recognized on a straight-line basis over the term of the lease. Customer contracts may include additional services such as excess mileage, repair and maintenance and other services on which revenue is recognized when earned. The Company’s full-service lease arrangements bundle these additional services. Rents for full-service lease contracts are allocated between lease and non-lease components based on the relative stand-alone price of each component. Taxes, such as sales and use and value added, which are collected by the Company from a customer, are excluded from the measurement of lease income and expenses. Rental revenues for the years ended December 31, 2020, 2019 and 2018 were $802.3, $798.2 and $797.1, respectively. Depreciation and related leased unit operating expenses were $776.5, $721.6 and $686.9 for the years ended December 31, 2020, 2019 and 2018, respectively.

Recognition of interest income and rental revenue is suspended (put on non-accrual status) when the receivable becomes more than 90 days past the contractual due date or earlier if some other event causes the Company to determine that collection is not probable. Accordingly, no finance receivables more than 90 days past due were accruing interest at December 31, 2020 or December 31, 2019. Recognition is resumed if the receivable becomes current by the payment of all amounts due under the terms of the existing contract and collection of remaining amounts is considered probable (if not contractually modified) or if the customer makes scheduled payments for three months and collection of remaining amounts is considered probable (if contractually modified). Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms.

Finance leases are secured by the trucks and related equipment being leased and the lease terms generally range from three to five years depending on the type and use of the equipment. The lessee is required to either purchase the equipment or guarantee to the Company a stated residual value upon the disposition of the equipment at the end of the finance lease term.

Operating lease terms generally range from three to five years. At the end of the operating lease term, the lessee has the option to return the equipment to the Company or purchase the equipment at its fair market value.  

The Company determines its estimate of the residual value of leased vehicles by considering the length of the lease term, the truck model, the expected usage of the truck and anticipated market demand. If the sales price of the truck at the end of the agreement differs from the Company’s estimated residual value, a gain or loss will result. Future market conditions, changes in government regulations and other factors outside the Company’s control could impact the ultimate sales price of trucks returned under these contracts. Residual values are reviewed regularly and adjusted if market conditions warrant.

Cash and Cash Equivalents: Cash equivalents consist of liquid investments with a maturity at date of purchase of 90 days or less.

Marketable Debt Securities: The Company's investments in marketable debt securities are classified as available-for-sale. These investments are stated at fair value and may include an allowance for credit losses. Changes in the allowance for credit losses are recognized in the current period earnings and any unrealized gains or losses, net of tax, are included as a component of accumulated other comprehensive income (loss) (AOCI).

The Company utilizes third-party pricing services for all of its marketable debt security valuations. The Company reviews the pricing methodology used by the third-party pricing services, including the manner employed to collect market information. On a quarterly basis, the Company also performs review and validation procedures on the pricing information received from the third-party

39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

providers. These procedures help ensure the fair value information used by the Company is determined in accordance with applicable accounting guidance.

The Company evaluates its investment in marketable debt securities at the end of each reporting period to determine if a decline in fair value is the result of credit losses or unrealized losses. In assessing credit losses, the Company considers the collectability of principal and interest payments by monitoring changes to issuers’ credit ratings, specific credit events associated with individual issuers as well as the credit ratings of any financial guarantor. The Company considers its intent for selling the security and whether it is more likely than not the Company will be able to hold the security until the recovery of any credit losses and unrealized losses. Charges against the allowance for credit losses occur when a security with credit losses is sold or the Company no longer intends to hold that security.

Receivables:

Trade and Other Receivables: The Company’s trade and other receivables are recorded at cost, net of allowances. At December 31, 2020 and 2019, respectively, trade and other receivables included trade receivables from dealers and customers of $942.7 and $1,055.0 and other receivables of $254.8 and $251.1 relating primarily to value added tax receivables and supplier allowances and rebates.

Finance and Other Receivables:

Loans – Loans represent fixed or floating-rate loans to customers collateralized by the vehicles purchased and are recorded at amortized cost.

Finance leases – Finance leases are sales-type finance leases, which lease equipment to retail customers and dealers. These leases are reported as the sum of minimum lease payments receivable and estimated residual value of the property subject to the contracts, reduced by unearned interest.

Dealer wholesale financing – Dealer wholesale financing is floating-rate wholesale loans to PACCAR dealers for new and used trucks and are recorded at amortized cost. The loans are collateralized by the trucks being financed.

Operating lease receivables and other – Operating lease receivables and other include monthly rentals due on operating leases, unamortized loan and lease origination costs, interest on loans and other amounts due within one year in the normal course of business.

Allowance for Credit Losses:

Truck, Parts and Other: The Company historically has not experienced significant losses or past due amounts on trade and other receivables in its Truck, Parts and Other businesses. Accounts are considered past due once the unpaid balance is over 30 days outstanding based on contractual payment terms. Accounts are charged off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible. The allowance for credit losses for Truck, Parts and Other was $.6 for the years ended December 31, 2020 and 2019. Net charge-offs were nil, $.3 and $.1 for the years ended December 31, 2020, 2019 and 2018, respectively.

Financial Services: The Company continuously monitors the payment performance of its finance receivables. For large retail finance customers and dealers with wholesale financing, the Company regularly reviews their financial statements and makes site visits and phone contact as appropriate. If the Company becomes aware of circumstances that could cause those customers or dealers to face financial difficulty, whether or not they are past due, the customers are placed on a watch list.

The Company modifies loans and finance leases in the normal course of its Financial Services operations. 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. Modifications for credit reasons are changes to contract terms for customers considered to be in financial difficulty. 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.

40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

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. When the Company modifies a loan or finance lease for credit reasons and grants a concession, the modification is classified as a troubled debt restructuring (TDR). The Company does not typically grant credit modifications for customers that do not meet minimum underwriting standards since the Company normally repossesses the financed equipment in these circumstances. When such modifications do occur, they are considered TDRs. In accordance with FASB statement, Prudential Regulator Guidance Concerning

Troubled Debt Restructurings, issued on March 22, 2020, short-term modifications granted to customers were not considered TDRs if they were not past due and were seeking to manage their liquidity needs because of the effects of the COVID-19 pandemic.

On average, modifications extended contractual terms by approximately three months in 2020 and five months in 2019 and did not have a significant effect on the weighted average term or interest rate of the total portfolio at December 31, 2020 and 2019.

The Company has developed a systematic methodology for determining the allowance for credit losses for its two portfolio segments, retail and wholesale. The retail segment consists of retail loans and sales-type finance leases, net of unearned interest. The wholesale segment consists of truck inventory financing loans to dealers that are collateralized by trucks and other collateral. The wholesale segment generally has less risk than the retail segment. Wholesale receivables generally are shorter in duration than retail receivables, and the Company requires periodic reporting of the wholesale dealer’s financial condition, conducts periodic audits of the trucks being financed and in many cases, obtains guarantees or other security such as dealership assets. In determining the allowance for credit losses, retail loans and finance leases are evaluated together since they relate to a similar customer base, their contractual terms require regular payment of principal and interest, generally over three to five years, and they are secured by the same type of collateral. The allowance for credit losses consists of both specific and general reserves.

The Company individually evaluates certain finance receivables for impairment. Finance receivables that are evaluated individually for impairment consist of all wholesale accounts and certain large retail accounts with past due balances or otherwise determined to be at a higher risk of loss. A finance receivable is impaired if it is considered probable the Company will be unable to collect all contractual interest and principal payments as scheduled. In addition, all retail loans and leases which have been classified as TDRs and all customer accounts over 90 days past due are considered impaired. Generally, impaired accounts are on non-accrual status. Impaired accounts classified as TDRs which have been performing for 90 consecutive days are placed on accrual status if it is deemed probable that the Company will collect all principal and interest payments.

Impaired receivables are generally considered collateral dependent. Large balance retail and all wholesale impaired receivables are individually evaluated to determine the appropriate reserve for losses. The determination of reserves for large balance impaired receivables considers the fair value of the associated collateral. When the underlying collateral fair value exceeds the Company’s amortized cost basis, no reserve is recorded. Small balance impaired receivables with similar risk characteristics are evaluated as a separate pool to determine the appropriate reserve for losses using the historical loss information discussed below.

The Company evaluates finance receivables that are not individually impaired and share similar risk characteristics on a collective basis and determines the general allowance for credit losses for both retail and wholesale receivables based on historical loss information, using past due account data, current market conditions, and expected changes in future macroeconomic conditions that affect collectability. Historical credit loss data provides relevant information of expected credit losses. The historical information used includes assumptions regarding the likelihood of collecting current and past due accounts, repossession rates, and the recovery rate on the underlying collateral based on used truck values and other pledged collateral or recourse.

The Company has developed a range of loss estimates for each of its country portfolios based on historical experience, taking into account loss frequency and severity in both strong and weak truck market conditions. A projection is made of the range of estimated credit losses inherent in the portfolio from which an amount is determined based on current market conditions and other factors impacting the creditworthiness of the Company’s borrowers and their ability to repay. Adjustments to historical loss information are made for changes in forecasted economic conditions that are specific to the industry and markets in which the Company conducts business. The Company utilizes economic forecasts from third party sources and determines expected losses based on historical experience under similar market conditions. After determining the appropriate level of the allowance for credit losses, a provision for losses on finance receivables is charged to income as necessary to reflect management’s estimate of expected credit losses, net of recoveries, inherent in the portfolio.

In determining the fair value of the collateral, the Company uses a pricing matrix and categorizes the fair value as Level 2 in the hierarchy of fair value measurement. The pricing matrix is reviewed quarterly and updated as appropriate. The pricing matrix considers the make, model and year of the equipment as well as recent sales prices of comparable equipment sold individually, which

41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

is the lowest unit of account, through wholesale channels to the Company’s dealers (principal market). The fair value of the collateral also considers the overall condition of the equipment.

Accounts are charged off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible, which generally occurs upon repossession of the collateral. Typically the timing between the repossession and charge-off is not significant. In cases where repossession is delayed (e.g., for legal proceedings), the Company records a partial charge-off. The charge-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost basis.

Inventories: Inventories are stated at the lower of cost or market. Cost of inventories in the U.S. is determined principally by the last‑in, first-out (LIFO) method. Cost of all other inventories is determined principally by the first-in, first-out (FIFO) method. Cost of sales and revenues include shipping and handling costs incurred to deliver products to dealers and customers.

Equipment on Operating Leases: The Company’s Financial Services segment leases equipment under operating leases to its customers. In addition, in the Truck segment, equipment sold to customers in Europe subject to an RVG by the Company may be accounted for as an operating lease. Equipment is recorded at cost and is depreciated on the straight-line basis to the lower of the estimated residual value or guarantee value. Lease and guarantee periods generally range from three to five years. Estimated useful lives of the equipment range from three to ten years. The Company reviews residual values of equipment on operating leases periodically to determine that recorded amounts are appropriate.

Property, Plant and Equipment: Property, plant and equipment are stated at cost. Depreciation is computed by the straight-line method based on the estimated useful lives of various classes of assets. Certain production tooling and equipment are amortized on a unit of production basis.

Long-lived Assets and Goodwill: The Company evaluates the carrying value of property, plant and equipment when events and circumstances warrant a review. Goodwill is tested for impairment at least on an annual basis. There were no significant impairment charges for the three years ended December 31, 2020. Goodwill was $118.8 and $109.1 at December 31, 2020 and 2019, respectively. The increase in value was due to currency translation.

Product Support Liabilities: Product support liabilities include estimated future payments related to product warranties and deferred revenues on optional extended warranties and R&M contracts. The Company generally offers one year warranties covering most of its vehicles and related aftermarket parts. For vehicles equipped with engines manufactured by PACCAR, the Company generally offers two year warranties on the engine. Specific terms and conditions vary depending on the product and the country of sale. Optional extended warranty and R&M contracts can be purchased for periods which generally range up to five years. Warranty expenses and reserves are estimated and recorded at the time products or contracts are sold based on historical and current data and reasonable expectations for the future regarding the frequency and cost of warranty claims, net of any recoveries. The Company periodically assesses the adequacy of its recorded liabilities and adjusts them as appropriate to reflect actual experience. Revenue from extended warranty and R&M contracts is deferred and recognized to income generally on a straight-line basis over the contract period. Warranty and R&M costs on these contracts are recognized as incurred.

Derivative Financial Instruments: As part of its risk management strategy, the Company enters into derivative contracts to hedge against interest rate and foreign currency risk. Certain derivative instruments designated as fair value hedges, cash flow hedges or net investment hedges are subject to hedge accounting. Derivative instruments that are not subject to hedge accounting are held as derivatives not designated as hedged instruments. The Company’s policies prohibit the use of derivatives for speculation or trading. At the inception of each hedge relationship, the Company documents its risk management objectives, procedures and accounting treatment. All of the Company’s interest-rate and certain foreign-exchange contracts are transacted under International Swaps and Derivatives Association (ISDA) master agreements. Each agreement permits the net settlement of amounts owed in the event of default and certain other termination events. For derivative financial instruments, the Company has elected not to offset derivative positions in the balance sheet with the same counterparty under the same agreements and is not required to post or receive collateral.

Exposure limits and minimum credit ratings are used to minimize the risks of counterparty default. The Company’s maximum exposure to potential default of its derivative counterparties is limited to the asset position of its derivative portfolio. The asset position of the Company’s derivative portfolio was $20.5 at December 31, 2020.

42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

The Company uses regression analysis to assess effectiveness of interest-rate contracts and net investment hedges at inception and uses quantitative analysis to assess subsequent effectiveness on a quarterly basis. For foreign-exchange contracts, the Company performs quarterly assessments to ensure that critical terms continue to match. All components of the derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. Hedge accounting is discontinued prospectively when the Company determines that a derivative financial instrument has ceased to be a highly effective hedge. Cash flows from derivative instruments are included in operating activities in the Consolidated Statements of Cash Flows.

Foreign Currency Translation: For most of the Company’s foreign subsidiaries, the local currency is the functional currency. All assets and liabilities are translated at year-end exchange rates and all income statement amounts are translated at the weighted average rates for the period. Translation adjustments are recorded in AOCI. The Company uses the U.S. dollar as the functional currency for all but one of its Mexican subsidiaries, which uses the local currency. For the U.S. functional currency entities in Mexico, inventories, cost of sales, property, plant and equipment and depreciation are remeasured at historical rates and resulting adjustments are included in net income.

Earnings per Share: Basic earnings per common share are computed by dividing earnings by the weighted average number of common shares outstanding, plus the effect of any participating securities. Diluted earnings per common share are computed assuming that all potentially dilutive securities are converted into common shares under the treasury stock method.

New Accounting Pronouncements

New Credit Loss Standard

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, including subsequently issued ASUs to clarify the implementation guidance in ASU 2016-13. The amendment introduces new guidance for credit losses on financial assets measured at amortized cost, including finance receivables, trade receivables and available-for-sale debt securities. Under this new model, expected credit losses are based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect collectability, replacing the previous incurred loss model. This ASU also updates the methodology for recording credit losses on available-for-sale debt securities from the write-down for other-than-temporary impairment to the allowance approach. The ASU is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. The Company adopted this ASU on January 1, 2020 on a modified retrospective basis as required, with a cumulative effect adjustment to Retained earnings as of the beginning of the period of adoption. The standard requires the application of the new credit impairment model for debt securities prospectively.

The cumulative effect of the changes made to the Company’s Consolidated Balance Sheet on January 1, 2020 for the adoption of ASU 2016-13 was as follows:

	BALANCE AT DECEMBER 31, 2019		CHANGE DUE TO NEW STANDARD			BALANCE AT JANUARY 1, 2020
Consolidated Balance Sheets
FINANCIAL SERVICES:
ASSETS
Finance and other receivables, net	$	12,086.0	$	(6.2	)	$	12,079.8
Other assets		715.0		.1			715.1
LIABILITIES
Deferred taxes and other liabilities		790.2		(1.5	)		788.7
STOCKHOLDERS' EQUITY
Retained earnings		10,398.5		(4.6	)		10,393.9

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

Other New Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate

Reform on Financial Reporting. This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period and will be in effect for a limited time through December 31, 2022. The Company adopted this ASU as of October 1, 2020. The Company will apply the accounting relief as relevant contract and hedge accounting relationship modifications are made during the reference rate reform transition period. The Company does not expect the standard to have a material impact on its consolidated financial statements.

In addition to adopting the ASUs disclosed above, the Company adopted the following standards on January 1, 2020, which had no material impact on the Company’s consolidated financial statements.

STANDARD	DESCRIPTION
2018-13	Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.
2018-15	Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.
2019-12	Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.

The FASB also issued the following standard, which is not expected to have a material impact on the Company’s consolidated financial statements.

STANDARD	DESCRIPTION	EFFECTIVE DATE
2018-14 *	Compensation – Retirement Benefits – Defined Benefit Plans – General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans.	January 1, 2021

* The Company will adopt on the effective date.

B.SALES AND REVENUES

The following table disaggregates Truck, Parts and Other revenues by major sources:

Year Ended December 31,	2020		2019
Truck
Truck sales	$	12,466.9	$	19,225.2
Revenues from extended warranties, operating leases and other		697.9		764.3
		13,164.8		19,989.5
Parts
Parts sales		3,803.3		3,912.1
Revenues from dealer services and other		109.6		112.8
		3,912.9		4,024.9
Winch sales and other		76.6		105.3
Truck, Parts and Other sales and revenues	$	17,154.3	$	24,119.7

The following table summarizes Financial Services lease revenues by lease type:

Year Ended December 31,	2020		2019
Finance lease revenues	$	189.2	$	199.7
Operating lease revenues		802.3		798.2
Total lease revenues	$	991.5	$	997.9

44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

C. INVESTMENTS IN MARKETABLE DEBT SECURITIES

Marketable debt securities consisted of the following at December 31:

	AMORTIZED		UNREALIZED		UNREALIZED		FAIR
2020	COST		GAINS		LOSSES		VALUE
U.S. tax-exempt securities	$	388.1	$	4.4	$	.1	$	392.4
U.S. corporate securities		229.6		3.3				232.9
U.S. government and agency securities		92.1		2.3				94.4
Non-U.S. corporate securities		406.0		5.5				411.5
Non-U.S. government securities		77.0		.5				77.5
Other debt securities		216.9		3.4				220.3
	$	1,409.7	$	19.4	$	.1	$	1,429.0

	AMORTIZED		UNREALIZED		UNREALIZED		FAIR
2019	COST		GAINS		LOSSES		VALUE
U.S. tax-exempt securities	$	318.1	$	2.2	$	.1	$	320.2
U.S. corporate securities		163.8		1.9				165.7
U.S. government and agency securities		128.4		.9				129.3
Non-U.S. corporate securities		347.7		2.3		.2		349.8
Non-U.S. government securities		72.3		.2		.1		72.4
Other debt securities		123.7		1.1		.1		124.7
	$	1,154.0	$	8.6	$	.5	$	1,162.1

The cost of marketable debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Amortization, accretion, interest and dividend income and realized gains and losses are included in investment income. The cost of securities sold is based on the specific identification method. Gross realized gains were $2.7, $1.3 and $1.1, and gross realized losses were $.3, $.4 and $.8 for the years ended December 31, 2020, 2019 and 2018, respectively.

Marketable debt securities with continuous unrealized losses and their related fair values were as follows:

At December 31,	2020				2019
	LESS THAN TWELVE MONTHS		TWELVE MONTHS OR GREATER		LESS THAN TWELVE MONTHS		TWELVE MONTHS OR GREATER
Fair value	$	81.1	$	1.3	$	177.0	$	31.4
Unrealized losses		.1				.4		.1

The unrealized losses on the investments above were due to higher yields on certain securities. The Company did not identify any indicators of a credit loss in its assessments. Accordingly, no allowance for credit losses was recorded at December 31, 2020 and December 31, 2019. The Company does not currently intend, and it is more likely than not, that it will not be required to sell the investment securities before recovery of the unrealized losses. The Company expects that the contractual principal and interest will be received on the investment securities. 

Contractual maturities on marketable debt securities at December 31, 2020 were as follows:

	AMORTIZED		FAIR
Maturities:	COST		VALUE
Within one year	$	313.9	$	315.7
One to five years		1,088.6		1,106.1
Six to ten years		5.2		5.2
More than ten years		2.0		2.0
	$	1,409.7	$	1,429.0

45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

Marketable debt securities included nil and $49.7 of variable rate demand obligations (VRDOs) at December 31, 2020 and 2019, respectively. VRDOs are debt instruments with long-term scheduled maturities which have interest rates that reset periodically. Actual maturities of VRDOs may differ from contractual maturities because these securities may be sold when interest rates are reset.

D. INVENTORIES

Inventories include the following:

At December 31,	2020			2019
Finished products	$	610.0		$	584.6
Work in process and raw materials		801.9			754.9
		1,411.9			1,339.5
Less LIFO reserve		(190.0	)		(186.3	)
	$	1,221.9		$	1,153.2

Inventories valued using the LIFO method comprised 42% and 46% of consolidated inventories before deducting the LIFO reserve at December 31, 2020 and 2019, respectively.

E. FINANCE AND OTHER RECEIVABLES

Finance and other receivables include the following:

At December 31,	2020			2019
Loans	$	5,839.1		$	5,241.7
Finance leases		3,944.7			3,906.7
Dealer wholesale financing		2,012.4			2,907.4
Operating lease receivables and other		151.5			142.6
	$	11,947.7		$	12,198.4
Less allowance for losses:
Loans and leases		(120.4	)		(104.4	)
Dealer wholesale financing		(3.4	)		(4.3	)
Operating lease receivables and other		(3.2	)		(3.7	)
	$	11,820.7		$	12,086.0

Included in Finance and other receivables, net on the Consolidated Balance Sheets is accrued interest receivable (net of allowance for credit losses) of $35.6 and $29.5 as of December 31, 2020 and December 31, 2019, respectively. The net activity of dealer direct loans and dealer wholesale financing on new trucks is shown in the operating section of the Consolidated Statements of Cash Flows since those receivables finance the sale of Company inventory.

Annual minimum payments due on loans are as follows:

Beginning January 1,	LOANS
2021	$	1,758.4
2022		1,480.1
2023		1,223.6
2024		881.8
2025		380.0
Thereafter		115.2
	$	5,839.1

46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

Annual minimum payments due on finance lease receivables and a reconciliation of the undiscounted cash flows to the net investment in finance leases are as follows:

	FINANCE
Beginning January 1,	LEASES
2021	$	1,310.4
2022		1,030.5
2023		775.0
2024		458.8
2025		223.4
Thereafter		82.5
		3,880.6
Unguaranteed residual values		458.8
Unearned interest on finance leases		(394.7	)
Net investment in finance leases	$	3,944.7

Experience indicates substantially all of dealer wholesale financing will be repaid within one year. In addition, repayment experience indicates that some loans, leases and other finance receivables will be paid prior to contract maturity, while others may be extended or modified.

For the following credit quality disclosures, finance receivables are classified into two portfolio segments, wholesale and retail. The retail portfolio is further segmented into dealer retail and customer retail. The dealer wholesale segment consists of truck inventory financing to PACCAR dealers. The dealer retail segment consists of loans and leases to participating dealers and franchises that use the proceeds to fund customers’ acquisition of commercial vehicles and related equipment. The customer retail segment consists of loans and leases directly to customers for the acquisition of commercial vehicles and related equipment. Customer retail receivables are further segregated between fleet and owner/operator classes. The fleet class consists of customer retail accounts operating more than five trucks. All other customer retail accounts are considered owner/operator. These two classes have similar measurement attributes, risk characteristics and common methods to monitor and assess credit risk.

Allowance for Credit Losses: The allowance for credit losses is summarized as follows:

	2020
	DEALER						CUSTOMER
	WHOLESALE			RETAIL			RETAIL			OTHER*			TOTAL**
Balance at January 1	$	4.3		$	9.2		$	101.4		$	3.7		$	118.6
Provision for losses		(1.0	)		(.8	)		30.1			.5			28.8
Charge-offs								(26.6	)		(1.4	)		(28.0	)
Recoveries								5.3			.4			5.7
Currency translation and other		.1						1.8						1.9
Balance at December 31	$	3.4			8.4		$	112.0		$	3.2		$	127.0

	2019
	DEALER						CUSTOMER
	WHOLESALE			RETAIL			RETAIL			OTHER*			TOTAL
Balance at January 1	$	6.8		$	10.0		$	93.8		$	3.2		$	113.8
Provision for losses		(1.6	)		(1.0	)		14.2			3.8			15.4
Charge-offs		(.6	)					(24.2	)		(3.6	)		(28.4	)
Recoveries								10.7			.3			11.0
Currency translation and other		(.3	)		.2			.7						.6
Balance at December 31	$	4.3		$	9.2		$	95.2		$	3.7		$	112.4

* Operating lease and other trade receivables.

**    The beginning balance has been adjusted for the adoption of ASU 2016-13.

47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

	2018
	DEALER						CUSTOMER
	WHOLESALE			RETAIL			RETAIL			OTHER*			TOTAL
Balance at January 1	$	6.0		$	9.4		$	92.5		$	9.3		$	117.2
Provision for losses		1.0			.7			13.6			1.2			16.5
Charge-offs								(20.0	)		(7.5	)		(27.5	)
Recoveries								9.9			.4			10.3
Currency translation and other		(.2	)		(.1	)		(2.2	)		(.2	)		(2.7	)
Balance at December 31	$	6.8		$	10.0		$	93.8		$	3.2		$	113.8

* Operating lease and other trade receivables.

Information regarding finance receivables evaluated and determined individually and collectively is as follows:

	DEALER				CUSTOMER
At December 31, 2020	WHOLESALE		RETAIL		RETAIL		TOTAL
Amortized cost basis for impaired finance    receivables evaluated individually			$	1.2	$	86.7	$	87.9
Allowance for impaired finance receivables    determined individually						5.6		5.6
Amortized cost basis for finance receivables    evaluated collectively	$	2,012.4		1,701.9		7,994.0		11,708.3
Allowance for finance receivables determined    collectively		3.4		8.4		106.4		118.2

	DEALER				CUSTOMER
At December 31, 2019	WHOLESALE		RETAIL		RETAIL		TOTAL
Amortized cost basis for impaired finance    receivables evaluated individually			$	2.3	$	47.6	$	49.9
Allowance for impaired finance receivables    determined individually						6.5		6.5
Amortized cost basis for finance receivables    evaluated collectively	$	2,907.4		1,643.3		7,455.2		12,005.9
Allowance for finance receivables determined    collectively		4.3		9.2		88.7		102.2

The amortized cost basis for finance receivables that are on non-accrual status is as follows:

At December 31,	2020			2019
Dealer:
Retail	$	1.2	$	2.3
Customer retail:
Fleet		78.6		40.2
Owner/operator		8.1		7.2
	$	87.9	$	49.7

48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

Impaired Loans: Impaired loans are summarized below. The impaired loans with specific reserve represent the unpaid principal balance. The amortized cost basis of impaired loans as of December 31, 2020 and 2019 was not significantly different than the unpaid principal balance.

	DEALER			CUSTOMER RETAIL
At December 31, 2020	WHOLESALE	RETAIL		FLEET			OWNER/ OPERATOR			TOTAL
Impaired loans with a specific reserve				$	22.6		$	2.1		$	24.7
Associated allowance					(1.6	)		(.3	)		(1.9	)
					21.0			1.8			22.8
Impaired loans with no specific reserve		$	1.2								1.2
Net carrying amount of impaired loans		$	1.2	$	21.0		$	1.8		$	24.0
Average amortized cost basis		$	1.6	$	26.5		$	2.8		$	30.9

	DEALER				CUSTOMER RETAIL
At December 31, 2019	WHOLESALE		RETAIL		FLEET			OWNER/ OPERATOR			TOTAL
Impaired loans with a specific reserve					$	10.9		$	3.1		$	14.0
Associated allowance						(2.1	)		(.6	)		(2.7	)
						8.8			2.5			11.3
Impaired loans with no specific reserve			$	2.3		6.7			.4			9.4
Net carrying amount of impaired loans			$	2.3	$	15.5		$	2.9		$	20.7
Average amortized cost basis	$	4.9	$	2.4	$	16.6		$	3.4		$	27.3

During the period the loans above were considered impaired, interest income recognized on a cash basis was as follows:

Year Ended December 31,	2020		2019		2018
Dealer:
Retail	$	.2	$	.2
Customer retail:
Fleet		1.5		1.3	$	2.0
Owner/operator		.2		.2		.2
	$	1.9	$	1.7	$	2.2

Credit Quality: The Company's customers are principally concentrated in the transportation industry in North America, Europe and Australia. The Company’s portfolio assets are diversified over a large number of customers and dealers with no single customer or dealer balances representing over 5% of the total portfolio assets. The Company retains as collateral a security interest in the related equipment.

At the inception of each contract, the Company considers the credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit-rating agency ratings, loan-to-value ratios and other internal metrics. On an ongoing basis, the Company monitors credit quality based on past due status and collection experience as there is a meaningful correlation between the past due status of customers and the risk of loss.

The Company has three credit quality indicators: performing, watch and at-risk. Performing accounts pay in accordance with the contractual terms and are not considered high-risk. Watch accounts include accounts 31 to 90 days past due and large accounts that are performing but are considered to be high‑risk. Watch accounts are not impaired. At-risk accounts are accounts that are impaired, including TDRs, accounts over 90 days past due and other accounts on non-accrual status.

The table below summarizes the amortized cost basis of the Company’s finance receivables within each credit quality indicator by year of origination and portfolio class.  

49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

	Revolving
At December 31, 2020	Loans		2020		2019		2018		2017		2016		Prior		Total
Dealer:
Wholesale:
Performing	$	2,004.5													$	2,004.5
Watch		7.9														7.9
	$	2,012.4													$	2,012.4
Retail:
Performing	$	20.7	$	504.2	$	474.9	$	268.0	$	180.1	$	100.4	$	132.0	$	1,680.3
Watch				5.2		10.5		4.5		1.4						21.6
At-risk												1.2				1.2
	$	20.7	$	509.4	$	485.4	$	272.5	$	181.5	$	101.6	$	132.0	$	1,703.1
Total Dealer	$	2,033.1	$	509.4	$	485.4	$	272.5	$	181.5	$	101.6	$	132.0	$	3,715.5
Customer Retail:
Fleet:
Performing			$	2,664.9	$	1,921.6	$	1,203.7	$	533.7	$	234.2	$	65.2	$	6,623.3
Watch				13.5		17.8		11.8		5.9		1.5		1.2		51.7
At-risk				8.0		37.0		18.2		12.2		2.4		.8		78.6
			$	2,686.4	$	1,976.4	$	1,233.7	$	551.8	$	238.1	$	67.2	$	6,753.6
Owner/Operator:
Performing			$	554.6	$	376.4	$	225.1	$	105.2	$	41.2	$	9.1	$	1,311.6
Watch				1.6		2.7		2.0		.7		.2		.2		7.4
At-risk				.9		2.1		3.2		1.2		.4		.3		8.1
			$	557.1	$	381.2	$	230.3	$	107.1	$	41.8	$	9.6	$	1,327.1
Total Customer Retail			$	3,243.5	$	2,357.6	$	1,464.0	$	658.9	$	279.9	$	76.8	$	8,080.7
Total	$	2,033.1	$	3,752.9	$	2,843.0	$	1,736.5	$	840.4	$	381.5	$	208.8	$	11,796.2

The tables below summarize the Company’s finance receivables by aging category. In determining past due status, the Company considers the entire contractual account balance past due when any installment is over 30 days past due. Substantially all customer accounts that were greater than 30 days past due prior to credit modification became current upon modification for aging purposes.

	DEALER				CUSTOMER RETAIL
At December 31, 2020	WHOLESALE		RETAIL		FLEET		OWNER/ OPERATOR		TOTAL
Current and up to 30 days past due	$	2,012.4	$	1,703.1	$	6,718.3	$	1,314.7	$	11,748.5
31 – 60 days past due						12.3		6.5		18.8
Greater than 60 days past due						23.0		5.9		28.9
	$	2,012.4	$	1,703.1	$	6,753.6	$	1,327.1	$	11,796.2

	DEALER				CUSTOMER RETAIL
At December 31, 2019	WHOLESALE		RETAIL		FLEET		OWNER/ OPERATOR		TOTAL
Current and up to 30 days past due	$	2,907.4	$	1,645.6	$	6,297.1	$	1,140.7	$	11,990.8
31 – 60 days past due						23.0		8.7		31.7
Greater than 60 days past due						27.6		5.7		33.3
	$	2,907.4	$	1,645.6	$	6,347.7	$	1,155.1	$	12,055.8

50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

Troubled Debt Restructurings: The balance of TDRs was $63.1 and $14.1 at December 31, 2020 and 2019, respectively. At modification date, the pre-modification and post-modification amortized cost basis balances for finance receivables modified during the period by portfolio class were as follows:

	2020				2019
	AMORTIZED COST BASIS				AMORTIZED COST BASIS
	PRE-MODIFICATION		POST-MODIFICATION		PRE-MODIFICATION		POST-MODIFICATION
Fleet	$	72.5	$	72.5	$	2.2	$	2.2
Owner/operator		2.2		2.2		.3		.3
	$	74.7	$	74.7	$	2.5	$	2.5

The effect on the allowance for credit losses from such modifications was not significant at December 31, 2020 and 2019.

TDRs modified during the previous twelve months that subsequently defaulted (i.e., became more than 30 days past due) in the years ended December 31, 2020 and 2019 were $4.1 and nil, respectively.

There were $2.0 and nil of finance receivables modified as TDRs during the previous twelve months that subsequently defaulted and were charged off for the years ended December 31, 2020 and 2019, respectively.

Repossessions: When the Company determines a customer is not likely to meet its contractual commitments, the Company repossesses the vehicles which serve as collateral for the loans, finance leases and equipment under operating leases. The Company records the vehicles as used truck inventory included in Financial Services Other assets on the Consolidated Balance Sheets. The balance of repossessed inventory at December 31, 2020 and 2019 was $19.3 and $25.6, respectively. Proceeds from the sales of repossessed assets were $85.6, $62.4 and $75.8 for the years ended December 31, 2020, 2019 and 2018, respectively. These amounts are included in Proceeds from asset disposals in the Consolidated Statements of Cash Flows. Write-downs of repossessed equipment on operating leases are recorded as impairments and included in Financial Services Depreciation and other expenses on the Consolidated Statements of Income.

F. EQUIPMENT ON OPERATING LEASES

A summary of equipment on operating leases for Truck, Parts and Other and for the Financial Services segment is presented below.

	TRUCK, PARTS AND OTHER						FINANCIAL SERVICES
At December 31,		2020			2019			2020			2019
Equipment on operating leases	$	576.8		$	706.3		$	4,493.9		$	4,350.0
Less allowance for depreciation		(154.9	)		(160.8	)		(1,331.1	)		(1,247.4	)
	$	421.9		$	545.5		$	3,162.8		$	3,102.6

Annual minimum lease payments due on Financial Services operating leases beginning January 1, 2021 are $668.2, $451.8, $252.8, $104.3, $35.0 and $5.1 thereafter.

When the equipment is sold subject to an RVG, the full sales price is received from the customer. A liability is established for the residual value obligation with the remainder of the proceeds recorded as deferred lease revenue. These amounts are summarized below:

	TRUCK, PARTS AND OTHER
At December 31,		2020		2019
Residual value guarantees	$	358.4	$	439.6
Deferred lease revenues		99.0		147.7
	$	457.4	$	587.3

The deferred lease revenue is amortized on a straight-line basis over the RVG contract period. At December 31, 2020, the annual amortization of deferred revenues beginning January 1, 2021 is $53.6, $24.6, $12.1, $8.5, $.2 and nil thereafter. Annual maturities of the RVGs beginning January 1, 2021 are $179.8, $82.4, $54.2, $15.9, $15.2 and $10.9 thereafter.

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

G. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment include the following:

At December 31,	USEFUL LIVES	2020			2019
Land		$	286.4		$	271.8
Buildings and improvements	10 - 40 years		1,474.7			1,382.2
Machinery, equipment and production tooling	3 - 12 years		4,234.4			3,998.2
Construction in progress			1,081.8			741.7
			7,077.3			6,393.9
Less allowance for depreciation			(3,806.9	)		(3,510.1	)
		$	3,270.4		$	2,883.8

H. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER

Accounts payable, accrued expenses and other include the following:

At December 31,	2020		2019
Truck, Parts and Other:
Accounts payable	$	1,176.2	$	1,115.7
Product support liabilities		514.6		508.1
Accrued expenses		446.5		467.4
Right-of-return liabilities		337.3		226.0
Accrued capital expenditures		288.8		270.3
Salaries and wages		260.8		271.8
Other		389.7		334.9
	$	3,413.9	$	3,194.2

I. PRODUCT SUPPORT LIABILITIES

Changes in product support liabilities are summarized as follows:

WARRANTY RESERVES	2020			2019			2018
Balance at January 1	$	440.0		$	380.2		$	298.8
Cost accruals		295.0			386.3			331.9
Payments		(437.2	)		(343.7	)		(271.8	)
Change in estimates for pre-existing warranties		84.1			19.8			25.6
Currency translation and other		7.8			(2.6	)		(4.3	)
Balance at December 31	$	389.7		$	440.0		$	380.2

DEFERRED REVENUES ON EXTENDED WARRANTIES AND R&M CONTRACTS	2020			2019			2018
Balance at January 1	$	801.4		$	699.9		$	653.9
Deferred revenues		409.9			499.1			448.2
Revenues recognized		(438.9	)		(396.4	)		(385.0	)
Currency translation		23.4			(1.2	)		(17.2	)
Balance at December 31	$	795.8		$	801.4		$	699.9

The Company expects to recognize approximately $272.3 of the remaining deferred revenues on extended warranties and R&M contracts in 2021, $251.8 in 2022, $162.3 in 2023, $74.6 in 2024, $25.4 in 2025 and $9.4 thereafter.

52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

Product support liabilities are included in the accompanying Consolidated Balance Sheets as follows:

	WARRANTY RESERVES				DEFERRED REVENUES
At December 31,		2020		2019		2020		2019
Truck, Parts and Other:
Accounts payable, accrued expenses and other	$	245.6	$	270.6	$	269.0	$	237.5
Other liabilities		144.1		169.4		513.1		547.6
Financial Services:
Accounts payable, accrued expenses and other						5.7		6.8
Deferred taxes and other liabilities						8.0		9.5
	$	389.7	$	440.0	$	795.8	$	801.4

J. BORROWINGS AND CREDIT ARRANGEMENTS

Financial Services borrowings include the following:

At December 31,	2020					2019
	EFFECTIVE					EFFECTIVE
	RATE			BORROWINGS		RATE			BORROWINGS
Commercial paper		.4	%	$	3,113.5		1.5	%	$	3,797.2
Bank loans		5.9	%		230.9		7.1	%		313.0
					3,344.4					4,110.2
Term notes		1.7	%		7,508.9		1.9	%		7,112.5
		1.4	%	$	10,853.3		1.9	%	$	11,222.7

Commercial paper and term notes borrowings were $10,622.4 and $10,909.7 at December 31, 2020 and 2019, respectively. Unamortized debt issuance costs, unamortized discounts and the net effect of fair value hedges were $(12.7) and $(20.5) at December 31, 2020 and 2019, respectively. The effective rate is the weighted average rate as of December 31, 2020 and 2019 and includes the effects of interest-rate contracts.

The annual maturities of the Financial Services borrowings are as follows:

	COMMERCIAL		BANK		TERM
Beginning January 1,	PAPER		LOANS		NOTES		TOTAL
2021	$	3,114.2	$	40.1	$	2,241.7	$	5,396.0
2022				121.6		2,231.9		2,353.5
2023				19.0		2,231.9		2,250.9
2024				25.1		415.4		440.5
2025				25.1		400.0		425.1
	$	3,114.2	$	230.9	$	7,520.9	$	10,866.0

Interest paid on borrowings was $164.5, $203.8 and $166.5 in 2020, 2019 and 2018, respectively.

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. The medium-term notes are issued by PACCAR Financial Corp. (PFC), PACCAR Financial Europe, PACCAR Financial Mexico and PACCAR Financial Pty. Ltd. (PFPL).

In November 2018, the Company’s U.S. finance subsidiary, PFC, filed a shelf registration under the Securities Act of 1933. The total amount of medium-term notes outstanding for PFC as of December 31, 2020 was $6,000.0. In February 2021, PFC issued $400.0 of medium-term notes under this registration. The registration expires in November 2021 and does not limit the principal amount of debt securities that may be issued during that period.

53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

As of December 31, 2020, the Company’s European finance subsidiary, PACCAR Financial Europe, had €1,600.0 available for issuance under a €2,500.0 medium-term note program listed on the Euro MTF Market of the Luxembourg Stock Exchange. This program replaced an expiring program in the second quarter of 2020 and is renewable annually through the filing of a new listing.

In April 2016, PACCAR Financial Mexico registered a 10,000.0 pesos medium-term note and commercial paper program with the Comision Nacional Bancaria y de Valores. The registration expires in April 2021 and limits the amount of commercial paper (up to one year) to 5,000.0 pesos. At December 31, 2020, 6,842.7 pesos remained available for issuance.  

In August 2018, the Company’s Australian subsidiary, PACCAR Financial Pty. Ltd. (PFPL), registered 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 as of December 31, 2020 was 450.0 Australian dollars.

The Company has line of credit arrangements of $3,523.1, of which $3,292.2 were unused at December 31, 2020. Included in these arrangements are $3,000.0 of committed bank facilities, of which $1,000.0 expires in June 2021, $1,000.0 expires in June 2023 and $1,000.0 expires in June 2024. The Company intends to replace these credit facilities on or before expiration with facilities of similar amounts and duration. 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, 2020.

K. LEASES

The Company leases certain facilities and equipment. The Company determines whether an arrangement is or contains a lease at inception. The Company accounts for lease and non-lease components separately. The consideration in the contract is allocated to each separate lease and non-lease component of the contract generally based on the relative stand-alone price of the components. The lease component is accounted for in accordance with the lease standard and the non-lease component is accounted for in accordance with other standards. The Company uses its incremental borrowing rate in determining the present value of lease payments unless the rate implicit in the lease is available. The lease term may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. Leases that have a term of 12 months or less at the commencement date (“short-term leases”) are not included in the right-of-use assets and the lease liabilities. Lease expense for the short-term leases are recognized on a straight-line basis over the lease term.

The components of lease expense were as follows:

Year Ended December 31,	2020		2019
Finance lease cost
Amortization of right-of-use assets	$	.9	$	.9
Interest on lease liabilities		.1		.1
Operating lease cost		16.6		16.9
Short-term lease cost		.8		.7
Variable lease cost		1.7		1.8
Total lease cost	$	20.1	$	20.4

For the years ended December 31, 2020, 2019 and 2018, total rental expenses for all leases amounted to $20.1, $20.4 and $35.7, respectively.

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

Balance sheet information related to leases was as follows:

At December 31,	2020				2019
	OPERATING LEASES		FINANCE LEASES		OPERATING LEASES		FINANCE LEASES
TRUCK, PARTS AND OTHER:
Other noncurrent assets	$	30.9	$	1.0	$	31.7	$	1.1
FINANCIAL SERVICES:
Other assets		9.0				5.2
Total right-of-use assets	$	39.9	$	1.0	$	36.9	$	1.1
TRUCK, PARTS AND OTHER:
Accounts payable, accrued expenses and other	$	11.4	$	.5	$	13.0	$	.7
Other liabilities		20.3		.5		19.5		.5
FINANCIAL SERVICES:
Accounts payable, accrued expenses and other		2.0				1.5
Deferred taxes and other liabilities		6.6				3.7
Total lease liabilities	$	40.3	$	1.0	$	37.7	$	1.2

The weighted-average remaining lease term and discount rate are as follows at December 31:

	2020						2019
	OPERATING LEASES			FINANCE LEASES			OPERATING LEASES			FINANCE LEASES
Weighted-average remaining lease term	5.7 years			2.3 years			5.1 years			2.2 years
Weighted-average discount rate		1.4	%		2.5	%		1.9	%		4.0	%

Maturities of lease liabilities are as follows:

Beginning January 1,	OPERATING LEASES			FINANCE LEASES
2021	$	13.7		$	.6
2022		10.6			.2
2023		5.8			.2
2024		3.2			.1
2025		2.4
Thereafter		6.0
Total lease payments		41.7			1.1
Less: interest		(1.4	)		(.1	)
Total lease liabilities	$	40.3		$	1.0

Cash flow information related to leases was as follows:

Year Ended December 31,	2020		2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	17.2	$	17.0
Operating cash flows from finance leases		.1		.2
Financing cash flows from finance leases		.9		1.0
Right-of-use assets obtained in exchange for lease liabilities
Operating leases		19.9		8.9
Finance leases		.5		.7

55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

L. COMMITMENTS AND CONTINGENCIES

At December 31, 2020, PACCAR had standby letters of credit and surety bonds totaling $45.5, from third-party financial institutions, in the normal course of business, which guarantee various insurance, financing and other activities. At December 31, 2020, PACCAR’s financial services companies, in the normal course of business, had outstanding commitments to fund new loan and lease transactions amounting to $823.4. The commitments generally expire in 90 days. The Company had other commitments, primarily to purchase production inventory, equipment and energy amounting to $127.5, $76.1, $3.4, $.3, $.2 and nil for 2021, 2022, 2023, 2024, 2025 and beyond, respectively.

The Company is involved in various stages of investigations and cleanup actions in different countries related to environmental matters. In certain of these matters, the Company has been designated as a “potentially responsible party” by domestic and foreign environmental agencies. 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 for the years ended December 31, 2020, 2019 and 2018 were $1.9, $1.3 and $1.2, respectively.

While the timing and amount of the ultimate costs associated with future environmental cleanup cannot be determined, management expects that these matters will not have a significant effect on the Company’s consolidated financial position.

On July 19, 2016, the European Commission (EC) concluded its investigation of all major European truck manufacturers and reached a settlement with DAF. Following the settlement, claims and lawsuits have been filed against the Company, DAF and certain DAF subsidiaries and other truck manufacturers in various European jurisdictions. These claims and lawsuits include a number of collective proceedings, including proposed class actions in the United Kingdom, alleging EC-related claims and seeking unspecified damages.  Others may bring EC-related claims and lawsuits against the Company or its subsidiaries. While the Company believes it has meritorious defenses, such claims and lawsuits will likely take a significant period of time to resolve. The Company cannot reasonably estimate a range of loss, if any, that may result given the early stage of these claims and lawsuits. An adverse outcome of such proceedings could have a material impact on the Company’s results of operations.    

PACCAR is also a defendant in various other legal proceedings and, in addition, there are various other contingent liabilities arising in the normal course of business. After consultation with legal counsel, management does not anticipate that disposition of these various other proceedings and contingent liabilities will have a material effect on the consolidated financial statements.

M. EMPLOYEE BENEFITS

Severance Costs: The Company incurred severance expense in 2020, 2019 and 2018 of $6.1, $5.8 and $.7, respectively.

Defined Benefit Pension Plans: The Company has several defined benefit pension plans, which cover a majority of its employees. The Company evaluates its actuarial assumptions on an annual basis and considers changes based upon market conditions and other factors.

The expected return on plan assets is determined by using a market-related value of assets, which is calculated based on an average of the previous five years of asset gains and losses.

Generally, accumulated unrecognized actuarial gains and losses are amortized using the 10% corridor approach. The corridor is defined as the greater of either 10% of the projected benefit obligation or the market-related value of plan assets. The amortization amount is the excess beyond the corridor divided by the average remaining estimated service life of participants on a straight-line basis.

The Company funds its pensions in accordance with applicable employee benefit and tax laws. The Company contributed $184.9 to its pension plans in 2020 and $35.7 in 2019. The Company expects to contribute in the range of $100 to $150 to its pension plans in 2021, of which $19.7 is estimated to satisfy minimum funding requirements. Annual benefits expected to be paid beginning January 1, 2021 are $125.7, $109.8, $114.8, $121.2, $127.0 and a total of $726.4 for the five years thereafter.

Plan assets are invested in global equity and debt securities through professional investment managers with the objective to achieve targeted risk adjusted returns and maintain liquidity sufficient to fund current benefit payments. Typically, each defined benefit plan has an investment policy that includes a target for asset mix, including maximum and minimum ranges for allocation percentages by investment category. The actual allocation of assets may vary at times based upon rebalancing policies and other factors. The Company periodically assesses the target asset mix by evaluating external sources of information regarding the long-term historical return, volatilities and expected future returns for each investment category. In addition, the long-term rates of return assumptions for pension accounting are reviewed annually to ensure they are appropriate. Target asset mix and forecast long-term returns by asset

56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

category are considered in determining the assumed long-term rates of return, although historical returns realized are given some consideration.

The fair value of mutual funds, common stocks and U.S. treasuries is determined using the market approach and is based on the quoted prices in active markets. These securities are categorized as Level 1. The fair value of debt securities is determined using the market approach and is based on the quoted market prices of the securities or other observable inputs. These securities are categorized as Level 2.

The fair value of commingled and pooled trust funds is determined using the market approach and is based on the unadjusted net asset value (NAV) per unit as determined by the sponsor of the fund based on the fair values of underlying investments. These assets are collective investment trusts and pooled funds, and substantially all of these investments have no redemption restrictions or unfunded commitments. Securities measured at NAV per unit as a practical expedient are not classified in the fair value hierarchy.

The following information details the allocation of plan assets by investment type. See Note Q for definitions of fair value levels.

		FAIR VALUE HIERARCHY
At December 31, 2020	TARGET	LEVEL 1		LEVEL 2		TOTAL		MEASURED AT NAV		TOTAL
Equities:
U.S. equities								$	1,047.0	$	1,047.0
Global equities									1,140.6		1,140.6
Total equities	50 - 70%								2,187.6		2,187.6
Fixed income:
U.S. fixed income		$	83.9	$	296.0	$	379.9	$	719.9	$	1,099.8
Non-U.S. fixed income					30.4		30.4		372.8		403.2
Total fixed income	30 - 50%		83.9		326.4		410.3		1,092.7		1,503.0
Cash and other			2.6		99.8		102.4		.4		102.8
Total plan assets		$	86.5	$	426.2	$	512.7	$	3,280.7	$	3,793.4

		FAIR VALUE HIERARCHY
At December 31, 2019	TARGET	LEVEL 1		LEVEL 2		TOTAL		MEASURED AT NAV		TOTAL
Equities:
U.S. equities								$	860.1	$	860.1
Global equities									973.1		973.1
Total equities	50 - 70%								1,833.2		1,833.2
Fixed income:
U.S. fixed income		$	90.6	$	260.3	$	350.9	$	611.7	$	962.6
Non-U.S. fixed income					28.1		28.1		322.0		350.1
Total fixed income	30 - 50%		90.6		288.4		379.0		933.7		1,312.7
Cash and other			10.6		68.2		78.8		1.7		80.5
Total plan assets		$	101.2	$	356.6	$	457.8	$	2,768.6	$	3,226.4

In 2019, U.S. fixed income Level 1 included $123.4 of investments valued at NAV. The table above reflects these investments as Measured at NAV.

The following weighted average assumptions relate to all pension plans of the Company:

At December 31,	2020			2019
Discount rate		2.2	%		2.9	%
Rate of increase in future compensation levels		3.7	%		3.8	%
Assumed long-term rate of return on plan assets		6.2	%		6.3	%

57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

The components of the change in projected benefit obligation and change in plan assets are as follows:

At December 31,	2020			2019
Change in projected benefit obligation:
Benefit obligation at January 1	$	3,234.4		$	2,655.4
Service cost		130.4			102.0
Interest cost		83.0			95.6
Benefits paid		(120.2	)		(127.0	)
Actuarial loss		379.5			478.0
Currency translation and other		54.4			30.0
Participant contributions		.4			.4
Projected benefit obligation at December 31	$	3,761.9		$	3,234.4
Change in plan assets:
Fair value of plan assets at January 1	$	3,226.4		$	2,699.2
Employer contributions		184.9			35.7
Actual return on plan assets		453.4			588.1
Benefits paid		(120.2	)		(127.0	)
Currency translation and other		48.5			30.0
Participant contributions		.4			.4
Fair value of plan assets at December 31	$	3,793.4		$	3,226.4
Funded status at December 31	$	31.5		$	(8.0	)

At December 31,	2020		2019
Amounts recorded on Balance Sheet:
Other noncurrent assets	$	222.1	$	146.5
Accounts payable, accrued expenses and other		25.5		39.9
Other liabilities		165.1		114.6
Accumulated other comprehensive loss:
Actuarial loss		571.7		512.5
Prior service cost		6.3		5.1
Net initial transition amount				.1

Of the December 31, 2020 amounts in accumulated other comprehensive loss, $56.7 of unrecognized actuarial loss and $.8 of unrecognized prior service cost are expected to be amortized into net pension expense in 2021.

The accumulated benefit obligation for all pension plans of the Company was $3,321.5 and $2,806.3 at December 31, 2020 and 2019, respectively.

Information for all plans with an accumulated benefit obligation in excess of plan assets is as follows:

At December 31,	2020		2019
Projected benefit obligation	$	167.9	$	170.6
Accumulated benefit obligation		148.7		150.1
Fair value of plan assets		13.5		23.4

58

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

The components of pension expense are as follows:

Year Ended December 31,		2020			2019			2018
Service cost	$	130.4		$	102.0		$	108.3
Interest on projected benefit obligation		83.0			95.6			85.8
Expected return on assets		(190.6	)		(176.6	)		(177.2	)
Amortization of prior service costs		1.5			1.4			1.4
Recognized actuarial loss		44.2			20.5			35.3
Settlement loss		11.6
Net pension expense	$	80.1		$	42.9		$	53.6

The components of net pension expense other than service cost are included in Interest and other (income), net on the Consolidated Statements of Income.

Multi-employer Plans: The Company participates in multi-employer plans in the U.S. and Europe. These are typically under collective bargaining agreements and cover its union-represented employees. The Company’s participation in the following multi-employer plans for the years ended December 31 are as follows:

		PENSION PLAN	COMPANY CONTRIBUTIONS
PENSION PLAN	EIN	NUMBER		2020		2019		2018
Metal and Electrical Engineering Industry Pension Fund		135668	$	33.9	$	27.8	$	27.9
Western Metal Industry Pension Plan	91-6033499	001		3.0		3.8		2.7
Other plans				.9		1.2		1.2
			$	37.8	$	32.8	$	31.8

The Company contributions shown in the table above approximate the multi-employer pension expense for each of the years ended December 31, 2020, 2019 and 2018, respectively.

Metal and Electrical Engineering Industry Pension Fund is a multi-employer union plan incorporating all DAF employees in the Netherlands and is covered by a collective bargaining agreement that expired on November 30, 2020 and is under negotiation. The Company’s contributions were less than 5% of the total contributions to the plan for the last two reporting periods ending December 2020. The plan is required by law (the Netherlands Pension Act) to have a coverage ratio in excess of 104.3%. Because the coverage ratio of the plan was 97.2% at December 31, 2020, a funding improvement plan effective through 2029 is in place. The funding improvement plan includes a possible reduction in pension benefits and delays in future benefit increases.

The Western Metal Industry Pension Plan is located in the U.S. and is covered by a collective bargaining agreement that will expire on November 2, 2025. In accordance with the U.S. Pension Protection Act of 2006, the plan continued to be certified as critical (red) status as of December 31, 2020, and a funding improvement plan has been implemented requiring additional contributions through 2022 as long as the plan remains in critical status. Contributions by the Company were 15% and 20% of the total contributions to the plan for the years ended December 31, 2020 and 2019, respectively.

Other plans are principally located in the U.S. and the Company’s contributions to these plans for the years ended December 31, 2020 and 2019 were less than 5% of each plan’s total contributions. As of December 31, 2020, one of the other plans was under a funding improvement plan.

There were no significant changes for the multi-employer plans in the periods presented that affected comparability between periods.

Defined Contribution Plans: The Company maintains several defined contribution benefit plans whereby it contributes designated amounts on behalf of participant employees. The largest plan is for U.S. salaried employees where the Company matches a percentage of employee contributions up to an annual limit. The match was 5% of eligible pay in 2020, 2019 and 2018. Other plans are located in Australia, Brasil, Canada, the Netherlands, Belgium and Germany. Expenses for these plans were $42.5, $48.3 and $45.3 in 2020, 2019 and 2018, respectively.

59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

N. INCOME TAXES

The Company’s tax rate is based on income and statutory tax rates in the various jurisdictions in which the Company operates. Tax law requires certain items to be included in the Company’s tax returns at different times than the items reflected in the Company’s financial statements. As a result, the Company’s annual tax rate reflected in its financial statements is different than that reported in its tax returns. Some of these differences are permanent, such as expenses that are not deductible in the Company’s tax return, and some differences reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. The Company establishes valuation allowances for its deferred tax assets if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The components of the Company’s income before income taxes include the following:

Year Ended December 31,	2020		2019		2018
Domestic	$	1,122.9	$	2,201.1	$	1,775.2
Foreign		535.0		898.1		1,035.0
	$	1,657.9	$	3,099.2	$	2,810.2

The components of the Company’s provision for income taxes include the following:

Year Ended December 31,	2020			2019			2018
Current provision:
Federal	$	182.5		$	352.3		$	267.1
State		44.9			96.8			67.5
Foreign		132.6			191.4			263.0
		360.0			640.5			597.6
Deferred (benefit) provision:
Federal		(11.2	)		40.7			22.6
State		1.7			(4.3	)		1.3
Foreign		9.0			34.4			(6.4	)
		(.5	)		70.8			17.5
	$	359.5		$	711.3		$	615.1

Tax benefits recognized for net operating loss carryforwards were $17.8, $12.4 and $5.0 for the years ended 2020, 2019 and 2018, respectively.

A reconciliation of the statutory U.S. federal tax rate to the effective income tax rate is as follows:

	2020			2019			2018
Statutory rate		21.0	%		21.0	%		21.0	%
Effect of:
Transition tax								(.2	)
State		2.3			2.3			2.2
Research and development tax credit		(1.4	)		(.9	)		(.8	)
Tax on foreign earnings		.8			.9			1.0
Other, net		(1.0	)		(.3	)		(1.3	)
		21.7	%		23.0	%		21.9	%

Based on the Company’s current operations, the Company does not expect that the repatriation of future foreign earnings will be subject to significant income tax as a result of the U.S. modified territorial system.

At December 31, 2020, the Company had net operating loss carryforwards of $492.2, of which $416.2 related to foreign subsidiaries and $76.0 related to states in the U.S. The related deferred tax asset was $129.2, for which a $95.6 valuation allowance has been provided. The carryforward periods range from four years to indefinite, subject to certain limitations under applicable laws. The future tax benefits of net operating loss carryforwards are evaluated on a regular basis, including a review of historical and projected operating results.

60

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

The tax effects of temporary differences representing deferred tax assets and liabilities are as follows:

At December 31,	2020			2019
Assets:
Accrued expenses	$	205.3		$	203.5
Net operating loss and tax credit carryforwards		140.1			132.0
Postretirement benefit plans					4.9
Allowance for losses on receivables		36.0			31.4
Goodwill and intangibles		10.0			18.7
Other		122.9			103.3
		514.3			493.8
Valuation allowance		(102.1	)		(118.5	)
		412.2			375.3
Liabilities:
Financial Services leasing depreciation		(765.1	)		(777.5	)
Depreciation and amortization		(168.0	)		(159.4	)
Postretirement benefit plans		(3.0	)
Other		(46.1	)		(28.9	)
		(982.2	)		(965.8	)
Net deferred tax liability	$	(570.0	)	$	(590.5	)

The balance sheet classifications of the Company’s deferred tax assets and liabilities are as follows:

At December 31,	2020			2019
Truck, Parts and Other:
Other noncurrent assets, net	$	90.4		$	115.4
Other liabilities		(3.5	)		(5.3	)
Financial Services:
Other assets		46.8			36.8
Deferred taxes and other liabilities		(703.7	)		(737.4	)
Net deferred tax liability	$	(570.0	)	$	(590.5	)

Cash paid for income taxes was $374.0, $586.0 and $607.6 in 2020, 2019 and 2018, respectively.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

	2020			2019		2018
Balance at January 1	$	30.7		$	21.2	$	22.9
Additions for tax positions related to the current year		5.5			6.5		11.2
Additions for tax positions related to prior years		.3			3.0
Reductions for tax positions related to prior years		(4.2	)
Reductions related to settlements							(5.7	)
Lapse of statute of limitations		(7.8	)				(7.2	)
Balance at December 31	$	24.5		$	30.7	$	21.2

The Company had $24.5, $30.7 and $21.2 of unrecognized tax benefits, of which $23.2, $28.4 and $18.9 would impact the effective tax rate, if recognized, as of December 31, 2020, 2019 and 2018, respectively.

The Company recognized $(.7), $.8 and $(.1) of (income) expense related to interest in 2020, 2019 and 2018, respectively. Accrued interest expense and penalties were $1.2, $1.9 and $1.1 as of December 31, 2020, 2019 and 2018, respectively. Interest and penalties are classified as income taxes in the Consolidated Statements of Income.

61

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

The Company believes it is reasonably possible that approximately $5.5 of unrecognized tax benefits, resulting primarily from research and development tax credits, will be resolved within the next 12 months. As of December 31, 2020, the United States Internal Revenue Service has completed examinations of the Company’s tax returns for all years through 2014. The Company’s tax returns for other major jurisdictions remain subject to examination for the years ranging from 2012 through 2020.

O. STOCKHOLDERS’ EQUITY

Accumulated Other Comprehensive Income (Loss): The components of AOCI and the changes in AOCI, net of tax, included in the Consolidated Balance Sheets and the Consolidated Statements of Stockholders’ Equity, consisted of the following:

	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2020	$	(15.3	)	$	6.1		$	(517.7	)	$	(573.2	)	$	(1,100.1	)
Recorded into AOCI		(78.4	)		10.3			(104.0	)		115.6			(56.5	)
Reclassified out of AOCI		64.5			(1.8	)		43.6						106.3
Net other comprehensive (loss) income		(13.9	)		8.5			(60.4	)		115.6			49.8
Balance at December 31, 2020	$	(29.2	)	$	14.6		$	(578.1	)	$	(457.6	)	$	(1,050.3	)

	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2019	$	2.0		$	(2.3	)	$	(477.8	)	$	(620.4	)	$	(1,098.5	)
Recorded into AOCI		(57.0	)		8.7			(56.8	)		47.2			(57.9	)
Reclassified out of AOCI		39.7			(.3	)		16.9						56.3
Net other comprehensive (loss) income		(17.3	)		8.4			(39.9	)		47.2			(1.6	)
Balance at December 31, 2019	$	(15.3	)	$	6.1		$	(517.7	)	$	(573.2	)	$	(1,100.1	)

	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2018	$	1.2		$	(1.8	)	$	(375.6	)	$	(417.4	)	$	(793.6	)
Recorded into AOCI		90.9			.1			(86.8	)		(213.3	)		(209.1	)
Reclassified out of AOCI		(90.5	)		(.1	)		28.0						(62.6	)
Net other comprehensive income (loss)		.4						(58.8	)		(213.3	)		(271.7	)
Reclassifications to retained earnings in accordance with ASU 2018-02		.4			(.5	)		(43.4	)		10.3			(33.2	)
Balance at December 31, 2018	$	2.0		$	(2.3	)	$	(477.8	)	$	(620.4	)	$	(1,098.5	)

62

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

Reclassifications out of AOCI during the years ended December 31, 2020, 2019 and 2018 were as follows:

		AMOUNT RECLASSIFIED OUT OF AOCI
AOCI COMPONENTS	LINE ITEM IN THE CONSOLIDATED STATEMENTS OF INCOME	2020			2019			2018
Unrealized (gains) and losses on    derivative contracts:
Truck, Parts and Other
Foreign-exchange contracts	Net sales and revenues	$	(4.0	)	$	21.2		$	5.4
	Cost of sales and revenues		1.7			(4.1	)		(6.6	)
	Interest and other (income), net		(4.6	)		2.1			(1.6	)
Financial Services
Interest-rate contracts	Interest and other borrowing expenses		94.5			32.5			(118.7	)
	Pre-tax expense increase (reduction)		87.6			51.7			(121.5	)
	Tax (benefit) expense		(23.1	)		(12.0	)		31.0
	After-tax expense increase (reduction)		64.5			39.7			(90.5	)
Unrealized gains on marketable debt securities:
Marketable debt securities	Investment income		(2.4	)		(.4	)		(.2	)
	Tax expense		.6			.1			.1
	After-tax income increase		(1.8	)		(.3	)		(.1	)
Unrealized losses on pension plans:
Truck, Parts and Other
Actuarial loss	Interest and other (income), net		44.2			20.5			35.3
Prior service costs	Interest and other (income), net		1.5			1.4			1.4
Settlement loss	Interest and other (income), net		11.6
	Pre-tax expense increase		57.3			21.9			36.7
	Tax benefit		(13.7	)		(5.0	)		(8.7	)
	After-tax expense increase		43.6			16.9			28.0
Total reclassifications out of AOCI		$	106.3		$	56.3		$	(62.6	)

Other Capital Stock Changes: The Company purchased and retired treasury shares of .7, 1.7 and 5.8 million in 2020, 2019 and 2018, respectively.

P. DERIVATIVE FINANCIAL INSTRUMENTS

As part of its risk management strategy, the Company enters into derivative contracts to hedge against interest rate and foreign currency risk.

Interest-Rate Contracts: The Company enters into various interest-rate contracts, including interest-rate swaps and cross currency interest-rate swaps. Interest-rate swaps involve the exchange of fixed for floating rate or floating for fixed rate interest payments based on the contractual notional amounts in a single currency. Cross currency interest-rate swaps involve the exchange of notional amounts and interest payments in different currencies. The Company is exposed to interest-rate and exchange-rate risk caused by market volatility as a result of its borrowing activities. The objective of these contracts is to mitigate the fluctuations on earnings, cash flows and fair value of borrowings. Net amounts paid or received are reflected as adjustments to interest expense.

At December 31, 2020, the notional amount of the Company’s interest-rate contracts was $3,280.5. Notional maturities for all interest-rate contracts are $1,241.1 for 2021, $950.0 for 2022, $761.8 for 2023, $169.6 for 2024, $58.9 for 2025 and $99.1 thereafter.

63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

Foreign-Exchange Contracts: The Company enters into foreign-exchange contracts to hedge certain anticipated transactions and assets and liabilities denominated in foreign currencies, particularly the Canadian dollar, the euro, the British pound, the Australian dollar, the Brazilian real and the Mexican peso. The objective is to reduce fluctuations in earnings and cash flows associated with changes in foreign currency exchange rates. The Company enters into foreign-exchange contracts as net investment hedges to reduce the foreign currency exposure from its investments in foreign subsidiaries. At December 31, 2020, the notional amount of the outstanding foreign-exchange contracts was $1,128.8. Foreign-exchange contracts mature within one year.

The following table presents the balance sheet classification, fair value, gross and pro forma net amounts of derivative financial instruments:

At December 31,	2020						2019
	ASSETS			LIABILITIES			ASSETS			LIABILITIES
Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets	$	16.4					$	45.8
Deferred taxes and other liabilities				$	116.1					$	31.0
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets		2.7						10.1
Accounts payable, accrued expenses and other					35.9						9.2
Financial Services:
Deferred taxes and other liabilities					1.2
	$	19.1		$	153.2		$	55.9		$	40.2
Derivatives not designated as hedging instruments:
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets	$	1.1					$	.4
Accounts payable, accrued expenses and other				$	3.3					$	1.8
Financial Services:
Other assets		.3
Deferred taxes and other liabilities					3.4						2.3
	$	1.4		$	6.7		$	.4		$	4.1
Gross amounts recognized in Balance Sheet	$	20.5		$	159.9		$	56.3		$	44.3
Less amounts not offset in financial instruments:
Truck, Parts and Other:
Foreign-exchange contracts		(2.1	)		(2.1	)		(.4	)		(.4	)
Financial Services:
Interest-rate contracts		(12.0	)		(12.0	)		(8.6	)		(8.6	)
Pro forma net amount	$	6.4		$	145.8		$	47.3		$	35.3

64

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

The following table presents the amount of (gain) loss from derivative financial instruments reclassified from AOCI into the Consolidated Statements of Income:

Year Ended December 31,		2020			2019			2018
Truck, Parts and Other:
Cash flow hedges	$	(6.9	)	$	19.2		$	(2.8	)
Net investment hedge		(5.6	)		(4.6	)
Total	$	(12.5	)	$	14.6		$	(2.8	)
Financial Services:
Fair value hedges		1.1			1.5			1.8
Cash flow hedges		94.5			32.5			(118.7	)
Total	$	95.6		$	34.0		$	(116.9	)

Fair Value Hedges

Changes in the fair value of derivatives designated as fair value hedges are recorded in earnings together with the changes in fair value of the hedged item attributable to the risk being hedged. The following table presents the amounts recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:

At December 31,	2020			2019
Financial Services
Term notes:
Carrying amount of hedged liabilities	$	90.9		$	90.5
Cumulative basis adjustment included in the carrying amount		(.9	)		(.5	)

The above table excludes the cumulative basis adjustments on discontinued hedge relationships of $(.4) and $(1.5) as of December 31, 2020 and 2019, respectively.

Cash Flow Hedges

Substantially all of the Company’s interest-rate contracts and some foreign-exchange contracts have been designated as cash flow hedges. Changes in the fair value of derivatives designated as cash flow hedges are recorded in AOCI. Amounts in AOCI are reclassified into net income in the same period in which the hedged transaction affects earnings. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows is 7.5 years.

The following table presents the pre-tax effects of (loss) gain on cash flow hedges recognized in other comprehensive income (loss) (OCI):

Year Ended December 31,	2020						2019						2018
	INTEREST-			FOREIGN-			INTEREST-			FOREIGN-			INTEREST-		FOREIGN-
	RATE			EXCHANGE			RATE			EXCHANGE			RATE		EXCHANGE
	CONTRACTS			CONTRACTS			CONTRACTS			CONTRACTS			CONTRACTS		CONTRACTS
(Loss) gain recognized in OCI:
Truck, Parts and Other				$	2.8					$	(31.7	)			$	4.5
Financial Services	$	(107.3	)		(.8	)	$	(44.4	)				$	117.1
	$	(107.3	)	$	2.0		$	(44.4	)	$	(31.7	)	$	117.1	$	4.5

The amount of loss recorded in AOCI at December 31, 2020 that is estimated to be reclassified into earnings in the following 12 months if interest rates and exchange rates remain unchanged is approximately $15.0, net of taxes. The fixed interest earned on finance receivables will offset the amount recognized in interest expense, resulting in a stable interest margin consistent with the Company’s risk management strategy.

65

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

The amount of gains or losses reclassified out of AOCI into net income based on the probability that the original forecasted transactions would not occur was nil for the years ended December 31, 2020, 2019 and 2018.

Net Investment Hedges

Changes in the fair value of derivatives designated as net investment hedges are recorded in AOCI as an adjustment to the Cumulative Translation Adjustment (CTA). At December 31, 2020, the notional amount of the outstanding net investment hedges was $344.8. For the year ended December 31, 2020, the pre-tax loss recognized in OCI for the net investment hedges was $20.4.

Derivatives Not Designated As Hedging Instruments

For other risk management purposes, the Company enters into derivative instruments that do not qualify for hedge accounting. These derivative instruments are used to mitigate the risk of market volatility arising from borrowings and foreign currency denominated transactions. Changes in the fair value of derivatives not designated as hedging instruments are recorded in earnings in the period in which the change occurs.

The loss (gain) recognized in earnings related to derivatives not designated as hedging instruments was as follows:

Year Ended December 31,	2020			2019				2018
	INTEREST-	FOREIGN-		INTEREST-	FOREIGN-			INTEREST-	FOREIGN-
	RATE	EXCHANGE		RATE	EXCHANGE			RATE	EXCHANGE
	CONTRACTS	CONTRACTS		CONTRACTS	CONTRACTS			CONTRACTS	CONTRACTS
Truck, Parts and Other:
Cost of sales and revenues		$	.7		$	.5			$	(.3	)
Interest and other (income), net			2.3			5.4				6.9
Financial Services:
Interest and other borrowing expenses			9.4			(10.1	)			(14.9	)
Selling, general and administrative			.8			.1				1.7
		$	13.2		$	(4.1	)		$	(6.6	)

Q. FAIR VALUE MEASUREMENTS

Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs to valuation techniques used to measure fair value are either observable or unobservable. These inputs have been categorized into the fair value hierarchy described below.

Level 1 – Valuations are based on quoted prices that the Company has the ability to obtain in actively traded markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market or exchange traded market, valuation of these instruments does not require a significant degree of judgment.

Level 2 – Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 – Valuations are based on model-based techniques for which some or all of the assumptions are obtained from indirect market information that is significant to the overall fair value measurement and which require a significant degree of management judgment.

There were no transfers of assets or liabilities between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31, 2020. The Company’s policy is to recognize transfers between levels at the end of the reporting period.

The Company uses the following methods and assumptions to measure fair value for assets and liabilities subject to recurring fair value measurements.

Marketable Securities: The Company’s marketable debt securities consist of municipal bonds, government obligations, investment-grade corporate obligations, commercial paper, asset-backed securities and term deposits. The fair value of U.S. government obligations is determined using the market approach and is based on quoted prices in active markets and are categorized as Level 1.

66

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

The fair value of U.S. government agency obligations, non-U.S. government bonds, municipal bonds, corporate bonds, asset-backed securities, commercial paper and term deposits is determined using the market approach and is primarily based on matrix pricing as a practical expedient which does not rely exclusively on quoted prices for a specific security. Significant inputs used to determine fair value include interest rates, yield curves, credit rating of the security and other observable market information and are categorized as Level 2.

Derivative Financial Instruments: The Company’s derivative contracts consist of interest-rate swaps, cross currency swaps and foreign currency exchange contracts. These derivative contracts are traded over the counter and their fair value is determined using industry standard valuation models, which are based on the income approach (i.e., discounted cash flows). The significant observable inputs into the valuation models include interest rates, yield curves, currency exchange rates, credit default swap spreads and forward rates and are categorized as Level 2.

Assets and Liabilities Subject to Recurring Fair Value Measurement

The Company’s assets and liabilities subject to recurring fair value measurements are either Level 1 or Level 2 as follows:

At December 31, 2020	LEVEL 1		LEVEL 2		TOTAL
Assets:
Marketable debt securities
U.S. tax-exempt securities			$	392.4	$	392.4
U.S. corporate securities				232.9		232.9
U.S. government and agency securities	$	86.5		7.9		94.4
Non-U.S. corporate securities				411.5		411.5
Non-U.S. government securities				77.5		77.5
Other debt securities				220.3		220.3
Total marketable debt securities	$	86.5	$	1,342.5	$	1,429.0
Derivatives
Cross currency swaps			$	14.8	$	14.8
Interest-rate swaps				1.6		1.6
Foreign-exchange contracts				4.1		4.1
Total derivative assets			$	20.5	$	20.5
Liabilities:
Derivatives
Cross currency swaps			$	77.6	$	77.6
Interest-rate swaps				38.5		38.5
Foreign-exchange contracts				43.8		43.8
Total derivative liabilities			$	159.9	$	159.9

67

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

At December 31, 2019	LEVEL 1		LEVEL 2		TOTAL
Assets:
Marketable debt securities
U.S. tax-exempt securities			$	320.2	$	320.2
U.S. corporate securities				165.7		165.7
U.S. government and agency securities	$	128.4		.9		129.3
Non-U.S. corporate securities				349.8		349.8
Non-U.S. government securities				72.4		72.4
Other debt securities				124.7		124.7
Total marketable debt securities	$	128.4	$	1,033.7	$	1,162.1
Derivatives
Cross currency swaps			$	43.8	$	43.8
Interest-rate swaps				2.0		2.0
Foreign-exchange contracts				10.5		10.5
Total derivative assets			$	56.3	$	56.3
Liabilities:
Derivatives
Cross currency swaps			$	13.5	$	13.5
Interest-rate swaps				17.5		17.5
Foreign-exchange contracts				13.3		13.3
Total derivative liabilities			$	44.3	$	44.3

Fair Value Disclosure of Other Financial Instruments

For financial instruments that are not recognized at fair value, the Company uses the following methods and assumptions to determine the fair value. These instruments are categorized as Level 2, except cash which is categorized as Level 1 and fixed rate loans which are categorized as Level 3.

Cash and Cash Equivalents: Carrying amounts approximate fair value.

Financial Services Net Receivables: For floating-rate loans, wholesale financing, and operating lease and other trade receivables, carrying values approximate fair values. For fixed rate loans, fair values are estimated using the income approach by discounting cash flows to their present value based on assumptions regarding the credit and market risks to approximate current rates for comparable loans. Finance lease receivables and related allowance for credit losses have been excluded from the accompanying table.

Debt: The carrying amounts of Financial Services commercial paper, variable rate bank loans and variable rate term notes approximate fair value. For fixed rate debt, fair values are estimated using the income approach by discounting cash flows to their present value based on current rates for comparable debt.

The Company’s estimate of fair value for fixed rate loans and debt that are not carried at fair value was as follows:

At December 31,	2020				2019
	CARRYING		FAIR		CARRYING		FAIR
	AMOUNT		VALUE		AMOUNT		VALUE
Assets:
Financial Services fixed rate loans	$	5,319.2	$	5,429.5	$	4,914.4	$	4,992.2
Liabilities:
Financial Services fixed rate debt		6,482.0		6,648.6		5,925.9		5,990.7

68

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions, except per share data)

R. STOCK COMPENSATION PLANS

PACCAR has certain plans under which officers and key employees may be granted options to purchase shares of the Company’s authorized but unissued common stock under plans approved by stockholders. Non‑employee directors and certain officers may be granted restricted shares of the Company’s common stock under plans approved by stockholders. Options outstanding under these plans were granted with exercise prices equal to the fair market value of the Company’s common stock at the date of grant. Options expire no later than ten years from the grant date and generally vest after three years. Restricted stock awards generally vest over three years or earlier upon meeting certain age and service requirements.

The Company recognizes compensation cost on these options and restricted stock awards on a straight-line basis over the requisite period the employee is required to render service less estimated forfeitures based on historical experience. The maximum number of shares of the Company’s common stock authorized for issuance under these plans is 46.7 million shares, and as of December 31, 2020, the maximum number of shares available for future grants was 11.8 million.

The assumptions used in determining the fair value of the option awards for each of the grant years are as follows:

		2020			2019			2018
Risk-free interest rate		1.54	%		2.55	%		2.64	%
Expected volatility		23	%		23	%		23	%
Expected dividend yield		4.1	%		4.9	%		3.8	%
Expected term	6 years			6 years			6 years
Weighted average grant date fair value of options per share	$	10.02		$	8.26		$	10.67

The estimated fair value of each option award is determined on the date of grant using the Black-Scholes-Merton option pricing model that uses assumptions noted in the table above. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on historical volatility. The dividend yield is based on an estimated future dividend yield using projected net income for the next five years, implied dividends and Company stock price. The expected term is based on the period of time that options granted are expected to be outstanding based on historical experience.

The fair value of options granted was $6.4, $7.3 and $6.3 for the years ended December 31, 2020, 2019 and 2018, respectively. The fair value of options vested during the years ended December 31, 2020, 2019 and 2018 was $5.0, $5.8 and $5.3, respectively.

A summary of activity under the Company’s stock plans is presented below:

		2020		2019		2018
Intrinsic value of options exercised	$	26.9	$	31.9	$	13.4
Cash received from stock option exercises		53.8		60.9		19.7
Tax benefit related to stock award exercises		3.8		3.8		2.4
Stock-based compensation		13.0		15.1		13.2
Tax benefit related to stock-based compensation		1.6		1.9		1.9

The summary of options as of December 31, 2020 and changes during the year then ended are presented below:

				PER SHARE		REMAINING		AGGREGATE
	NUMBER			EXERCISE		CONTRACTUAL		INTRINSIC
	OF SHARES			PRICE*		LIFE IN YEARS*		VALUE
Options outstanding at January 1		3,488,300		$	60.18
Granted		641,700			76.18
Exercised		(949,900	)		56.68
Cancelled		(63,600	)		69.75
Options outstanding at December 31		3,116,500		$	64.34		6.48	$	68.4
Vested and expected to vest		3,014,300		$	64.06		6.40	$	67.0
Exercisable		1,323,200		$	56.63		4.15	$	39.2

* Weighted Average

69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions, except per share data)

The fair value of restricted shares is determined based upon the stock price on the date of grant. The summary of nonvested restricted shares as of December 31, 2020 and changes during the year then ended is presented below:

	NUMBER			GRANT DATE
NONVESTED SHARES	OF SHARES			FAIR VALUE*
Nonvested awards outstanding at January 1		150,500		$	65.92
Granted		94,400			76.78
Vested		(96,700	)		69.46
Forfeited		(5,800	)		71.47
Nonvested awards outstanding at December 31		142,400		$	70.49

* Weighted Average

As of December 31, 2020, there was $5.4 of total unrecognized compensation cost related to nonvested stock options, which is recognized over a remaining weighted average vesting period of 1.46 years. Unrecognized compensation cost related to nonvested restricted stock awards of $2.0 is expected to be recognized over a remaining weighted average vesting period of 1.26 years.

The dilutive and antidilutive options are shown separately in the table below:

Year Ended December 31,	2020	2019	2018
Additional shares	607,800	621,300	785,100
Antidilutive options	686,100	1,489,400	1,176,600

S. SEGMENT AND RELATED INFORMATION

PACCAR operates in three principal segments: Truck, Parts and Financial Services. The Company evaluates the performance of its Truck and Parts segments based on operating profits, which excludes investment income, other income and expense, and income taxes. The Financial Services segment’s performance is evaluated based on income before income taxes. Geographic revenues from external customers are presented based on the country of the customer. The accounting policies of the reportable segments are the same as those applied in the consolidated financial statements as described in Note A.

Truck and Parts: The Truck segment includes the design and manufacture of high-quality, light-, medium- and heavy-duty commercial trucks and the Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles, both of which are sold through the same network of independent dealers. These segments derive a large proportion of their revenues and operating profits from operations in North America and Europe. The Truck segment incurs substantial costs to design, manufacture and sell trucks to its customers. The sale of new trucks provides the Parts segment with the basis for parts sales that may continue over the life of the truck, but are generally concentrated in the first five years after truck delivery. To reflect the benefit the Parts segment receives from costs incurred by the Truck segment, certain expenses are allocated from the Truck segment to the Parts segment. The expenses allocated are based on a percentage of the average annual expenses for factory overhead, engineering, research and development and SG&A expenses for the preceding five years. The allocation is based on the ratio of the average parts direct margin dollars (net sales less material and labor costs) to the total truck and parts direct margin dollars for the previous five years. The Company believes such expenses have been allocated on a reasonable basis. Truck segment assets related to the indirect expense allocation are not allocated to the Parts segment.

Financial Services: The Financial Services segment derives its earnings primarily from financing or leasing of PACCAR products and services provided to truck customers and dealers. Revenues are primarily generated from operations in North America and Europe.

In Europe, the Financial Services and Truck segments centralized the marketing of used trucks, including those units sold by the Truck segment subject to an RVG. Beginning in the fourth quarter of 2019, when a customer returns the truck at the end of the RVG contract, the Company’s Truck segment records a reduction in an RVG liability and the Company’s Financial Services segment records a used truck asset and revenue from the subsequent sale. Certain gains and losses from the sale of these used trucks are shared with the Truck segment. Revenues from the sale of used trucks from the Truck segment in Europe in prior periods are immaterial.  

Other: Included in Other is the Company’s industrial winch manufacturing business as well as sales, income and expenses not attributable to a reportable segment. Other also includes non-service cost components of pension expense and a portion of corporate

70

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

expenses. Intercompany interest income (expense) on cash advances to the financial services companies is included in Other and was $1.4, $.3 and $(.3) for 2020, 2019 and 2018, respectively.

Geographic Area Data		2020		2019		2018
Net sales and revenues:
United States	$	10,526.6	$	15,119.3	$	13,165.7
Europe		4,871.2		6,104.7		6,071.9
Other		3,330.7		4,375.7		4,258.1
	$	18,728.5	$	25,599.7	$	23,495.7
Property, plant and equipment, net:
United States	$	1,633.0	$	1,556.4	$	1,353.8
Belgium		596.2		395.7		237.4
The Netherlands		499.0		399.8		397.8
Other		542.2		531.9		491.9
	$	3,270.4	$	2,883.8	$	2,480.9
Equipment on operating leases, net:
United States	$	1,219.0	$	1,390.1	$	1,405.1
Poland		359.4		343.5		327.8
France		349.7		315.0		246.8
Germany		346.4		358.3		361.0
Spain		310.8		276.1		249.8
Mexico		302.3		320.5		306.4
United Kingdom		125.4		113.6		130.3
Other		571.7		531.0		614.4
	$	3,584.7	$	3,648.1	$	3,641.6

71

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020, 2019 and 2018 (currencies in millions)

Business Segment Data		2020			2019			2018
Net sales and revenues:
Truck	$	13,643.0		$	20,403.5		$	18,863.1
Less intersegment		(478.2	)		(414.0	)		(676.1	)
External customers		13,164.8			19,989.5			18,187.0
Parts		3,962.7			4,073.1			3,896.2
Less intersegment		(49.8	)		(48.2	)		(57.3	)
External customers		3,912.9			4,024.9			3,838.9
Other		76.6			105.3			112.7
		17,154.3			24,119.7			22,138.6
Financial Services		1,574.2			1,480.0			1,357.1
	$	18,728.5		$	25,599.7		$	23,495.7
Income (loss) before income taxes:
Truck	$	581.4		$	1,904.9		$	1,672.1
Parts		799.3			830.8			768.6
Other		18.2			(17.7	)		2.7
		1,398.9			2,718.0			2,443.4
Financial Services		223.1			298.9			305.9
Investment income		35.9			82.3			60.9
	$	1,657.9		$	3,099.2		$	2,810.2
Depreciation and amortization:
Truck	$	292.2		$	381.9		$	406.2
Parts		10.8			10.2			9.2
Other		20.8			20.3			18.4
		323.8			412.4			433.8
Financial Services		725.2			664.9			620.3
	$	1,049.0		$	1,077.3		$	1,054.1
Expenditures for long-lived assets:
Truck	$	556.0		$	664.9		$	778.5
Parts		18.4			46.2			29.4
Other		36.4			51.0			38.8
		610.8			762.1			846.7
Financial Services		1,046.7			1,378.6			1,085.1
	$	1,657.5		$	2,140.7		$	1,931.8
Segment assets:
Truck	$	5,971.9		$	5,609.0		$	5,347.3
Parts		1,255.6			1,172.1			1,090.9
Other		398.7			339.2			345.0
Cash and marketable securities		4,834.0			5,169.4			4,299.6
		12,460.2			12,289.7			11,082.8
Financial Services		15,799.8			16,071.4			14,399.6
	$	28,260.0		$	28,361.1		$	25,482.4

72

management’s report on internal control over

financial reporting

The management of PACCAR Inc (the Company) is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management assessed the Company’s internal control over financial reporting as of December 31, 2020, based on criteria for effective internal control over financial reporting described in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment, management concluded that the Company maintained effective internal control over financial reporting as of December 31, 2020.

Ernst & Young LLP, the Independent Registered Public Accounting Firm that audited the financial statements included in this Annual Report, has issued an attestation report on the Company’s internal control over financial reporting. The attestation report is included on page 75.

R. Preston Feight

Chief Executive Officer

73

report of independent registered public accounting firm

To the Stockholders and the Board of Directors of PACCAR Inc

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of PACCAR Inc (the Company) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 17, 2021, expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

	Product Warranty
Description of the Matter	The Company’s liability for product warranty totaled $390 million at December 31, 2020. As discussed in Note A of the consolidated financial statements, the Company's liability for product warranty is estimated and recorded at the time products are sold based on historical and current data and reasonable expectations for the future regarding the frequency and cost of warranty claims, net of recoveries. The Company periodically assesses the adequacy of its recorded liabilities and adjusts them as appropriate to reflect actual experience.  Auditing the Company’s liability for product warranty is complex due to the significant measurement uncertainty associated with the estimate and the application of significant management judgment, including the inputs used to estimate the number of and cost of future warranty claims. In addition, management formulates an estimate of recoveries from suppliers.
How We Addressed the Matter in Our Audit	We evaluated and tested the design and operating effectiveness of internal controls over the warranty reserve process, including management’s assessment of the assumptions and data underlying the reserve. To evaluate the liability for product warranty, our audit procedures included, among others, testing the completeness and accuracy of the underlying claims, supplier recovery data and evaluating the methodologies and assumptions used in the warranty accrual calculation. We also assessed the historical accuracy of management’s estimates through a hindsight analysis.

	/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1945 Seattle, Washington
February 17, 2021

74

report of independent registered public accounting firm

To the Stockholders and the Board of Directors of PACCAR Inc

Opinion on Internal Control Over Financial Reporting

We have audited PACCAR Inc’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, PACCAR Inc (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and our report dated February 17, 2021, expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

	/s/ Ernst & Young LLP
Seattle, Washington
February 17, 2021

75

quarterly results (unaudited)

	QUARTER
	FIRST		SECOND		THIRD		FOURTH
	(millions, except per share data)
2020
Truck, Parts and Other:
Net sales and revenues	$	4,778.0	$	2,701.9	$	4,538.4	$	5,136.0
Cost of sales and revenues		4,189.6		2,441.5		3,958.3		4,487.0
Research and development		71.0		66.5		64.7		71.7
Financial Services:
Revenues		383.7		360.3		397.6		432.6
Interest and other borrowing expenses		56.4		46.9		45.2		43.6
Depreciation and other expenses		229.4		224.1		262.5		292.0
Net Income		359.4		147.7		385.5		405.8
Net Income Per Share:*
Basic	$	1.04	$	.43	$	1.11	$	1.17
Diluted		1.03		.43		1.11		1.17

2019
Truck, Parts and Other:
Net sales and revenues	$	6,138.1	$	6,266.5	$	6,004.2	$	5,710.9
Cost of sales and revenues		5,217.1		5,341.7		5,106.8		4,890.0
Research and development		78.3		82.5		82.2		83.6
Financial Services:
Revenues		349.5		361.4		362.8		406.3
Interest and other borrowing expenses		53.4		60.0		59.6		57.5
Depreciation and other expenses		177.4		183.6		195.3		241.9
Net Income		629.0		619.7		607.9		531.3
Net Income Per Share:
Basic	$	1.81	$	1.79	$	1.75	$	1.53
Diluted		1.81		1.78		1.75		1.53

* The sum of quarterly per share amounts may not equal per share amounts reported for year-to-date periods. This is due to changes in the number of weighted shares outstanding and the effects of rounding for each period.

76

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

The registrant has not had any disagreements with its independent auditors on accounting or financial disclosure matters.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures.

The Company’s management, with the participation of the Principal Executive Officer and Principal Financial Officer, conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Management’s Report on Internal Control over Financial Reporting.

Management’s Report on Internal Control over Financial Reporting on page 73 and Report of Independent Registered Public Accounting Firm on the Company’s internal control over financial reporting on page 75 for the year ended December 31, 2020, are included in this Form 10-K.

There have been no changes in the Company’s internal controls over financial reporting during the fourth quarter of 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

Not applicable.

77

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Item 401(a), (d), and (e) of Regulation S-K:

The following information is included in the proxy statement for the annual stockholders meeting of April 27, 2021 and is incorporated herein by reference:

Identification of directors, family relationships, and business experience is included under the caption “ITEM 1: ELECTION OF DIRECTORS.”

Item 401(b) of Regulation S-K:

Information about the Company’s executive officers is included in Part I, Item 1 of this Form 10-K.

Item 405 of Regulation S-K:

The information required by this item is included in the proxy statement for the annual stockholders meeting of April 27, 2021 and is incorporated herein by reference.

Item 406 of Regulation S-K:

The Company has adopted a Code of Ethics applicable to the registrant’s senior financial officers including the Chief Executive Officer and Chief Financial Officer. The Company, in accordance with Item 406 of Regulation S‑K, has posted this Code of Ethics on its website at www.paccar.com. The Company intends to disclose on its website any amendments to, or waivers from, its Code of Ethics that are required to be publicly disclosed pursuant to the rules of the Securities and Exchange Commission. The information on the Company’s website is not incorporated by reference into this report.

Item 407(d)(4) and 407(d)(5) of Regulation S‑K:

The following information is included in the proxy statement for the annual stockholders meeting of April 27, 2021 and is incorporated herein by reference:

• Identification of the audit committee is included under the caption “THE AUDIT COMMITTEE.”

• Identification of audit committee financial experts is included under the caption “AUDIT COMMITTEE REPORT.”

ITEM 11. EXECUTIVE COMPENSATION.

The following information is included in the proxy statement for the annual stockholders meeting of April 27, 2021 and is incorporated herein by reference:

• Compensation of Directors is included under the caption “COMPENSATION OF DIRECTORS.”

• Compensation of Executive Officers and Related Matters is included under the caption “COMPENSATION OF EXECUTIVE OFFICERS.”

• Compensation Committee Report is under the caption “COMPENSATION COMMITTEE REPORT.”

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Stock ownership information is included under the captions “STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS” and “STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS” in the proxy statement for the annual stockholders meeting of April 27, 2021 and is incorporated herein by reference.

Information regarding equity compensation plans required by Regulation S‑K Item 201(d) is provided in Item 5 of this Form 10‑K.

78

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

No transactions with management and others as defined by Item 404 of Regulation S‑K occurred in 2020.

Information concerning director independence is included under the caption “BOARD GOVERNANCE” in the proxy statement for the annual stockholders meeting of April 27, 2021 and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Principal accounting fees and services information is included under the caption “INDEPENDENT AUDITORS” in the proxy statement for the annual stockholders meeting of April 27, 2021 and is incorporated herein by reference.

79

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) (1) Listing of financial statements

The following consolidated financial statements of PACCAR Inc are included in Item 8:

Consolidated Statements of Income

— Years Ended December 31, 2020, 2019 and 2018

Consolidated Statements of Comprehensive Income

— Years Ended December 31, 2020, 2019 and 2018

Consolidated Balance Sheets

— December 31, 2020 and 2019

Consolidated Statements of Cash Flows  

— Years Ended December 31, 2020, 2019 and 2018

Consolidated Statements of Stockholders’ Equity

— Years Ended December 31, 2020, 2019 and 2018

Notes to Consolidated Financial Statements

— December 31, 2020, 2019 and 2018

(2) Listing of financial statement schedules

All schedules are omitted because the required matter or conditions are not present or because the information required by the schedules is submitted as part of the consolidated financial statements and notes thereto.

(3) Listing of Exhibits (in order of assigned index numbers):

Exhibit Number	Exhibit Description			Form	Date of First Filing		Exhibit Number		File Number
(3)  (i)			Articles of Incorporation:
			Amended and Restated Certificate of Incorporation of PACCAR Inc	8-K		May 4, 2018		3(i)		001-14817
			Certificate of Amendment of Amended and Restated Certificate of Incorporation of PACCAR Inc	8-K		April 24, 2020		3(i)		001-14817
(ii)			Bylaws:
			Sixth Amended and Restated Bylaws of PACCAR Inc	8-K		December 7, 2018		3(ii)		001-14817
(4)			Instruments defining the rights of security holders, including indentures**:
		(a)	Indenture for Senior Debt Securities dated as of November 20, 2009 between PACCAR Financial Corp. and The Bank of New York Mellon Trust Company, N.A.	S-3		November 20, 2009		4.1		333-163273
		(b)	Forms of Medium-Term Note, Series O (PACCAR Financial Corp.)	S-3		November 5, 2015		4.2 and 4.3		333-207838
		(c)	Forms of Medium-Term Note, Series P (PACCAR Financial Corp.)	S-3		November 2, 2018		4.2 and 4.3		333-228141
		(d)	Terms and Conditions of the Notes applicable to the €2,500,000,000 Medium Term Note Programme of PACCAR Financial Europe B.V. set forth in the Listing Particulars dated May 9, 2018	10-Q		August 3, 2018		4(h)		001-14817

80

Exhibit Number

Exhibit Description

Form

Date of First Filing

Exhibit Number

File Number

(e)

Terms and Conditions of the Notes applicable to the €2,500,000,000 Medium Term Note Programme of PACCAR Financial Europe B.V. set forth in the Listing Particulars dated July 4, 2019

10-Q

October 30, 2019

4(i)

001-14817

(f)

Terms and Conditions of the Notes applicable to the €2,500,000,000 Medium Term Note Programme of PACCAR Financial Europe B.V. set forth in the Listing Particulars dated May 29, 2020

10-Q

August 3, 2020

4(h)

001-14817

(g)

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

10-K

February 19, 2020

4(j)

001-14817

**

Pursuant to the Instructions to Exhibits, certain instruments defining the rights of holders of long-term debt securities of the Company and its wholly owned subsidiaries are not filed because the total amount of securities authorized under any such instrument does not exceed 10 percent of the Company’s total assets. The Company will file copies of such instruments upon request of the Commission.

(10)

Material Contracts:

(a)

PACCAR Inc Amended and Restated Supplemental Retirement Plan

10-K

February 27, 2009

10(a)

001-14817

(b)

Amended and Restated Deferred Compensation Plan

10-Q

May 10, 2012

10(b)

001-14817

(c)

Deferred Incentive Compensation Plan (Amended and Restated as of December 31, 2004)

10-K

February 27, 2006

10(b)

001-14817

(d)

Second Amended and Restated PACCAR Inc Restricted Stock and Deferred Compensation Plan for Non-Employee Directors

DEF14A

March 14, 2014

Appendix A

001-14817

(e)

PACCAR Inc Restricted Stock and Deferred Compensation Plan for Non-Employee Directors, Form of Deferred Restricted Stock Unit Agreement for Non-Employee Directors

8-K

December 10, 2007

99.3

001-14817

(f)

Amendment to Compensatory Arrangement with Non-Employee Directors

10-K

February 26, 2015

10(g)

001-14817

(g)

PACCAR Inc Senior Executive Yearly Incentive Compensation Plan

10-K

February 19, 2020

10(g)

001-14817

(h)

PACCAR Inc Long Term Incentive Plan

10-K

February 19, 2020

10(h)

001-14817

(i)

Amendment One to PACCAR Inc Long Term Incentive Plan, Nonstatutory Stock Option Agreement and Form of Option Grant Agreement

10-Q

August 7, 2013

10(k)

001-14817

(j)

PACCAR Inc Long Term Incentive Plan, 2018 Form of Restricted Stock Award Agreement

10-K

February 21, 2019

10(m)

001-14817

(k)

PACCAR Inc Long Term Incentive Plan, Form of Restricted Stock Unit Agreement

10-K

February 21, 2019

10(n)

001-14817

(l)

PACCAR Inc Savings Investment Plan, Amendment and Restatement effective September 1, 2016

10-Q

November 4, 2016

10(q)

001-14817

(m)

Memorandum of Understanding, dated as of May 11, 2007, by and among PACCAR Engine Company, the State of Mississippi and certain state and local supporting governmental entities

8-K

May 16, 2007

10.1

001-14817

(n)

Letter Waiver Dated as of July 22, 2008 amending the Memorandum of Understanding, dated as of May 11, 2007, by and among PACCAR Engine Company, the State of Mississippi and certain state and local supporting governmental entities

10-Q

October 27, 2008

10(o)

001-14817

81

Exhibit Number	Exhibit Description			Form	Date of First Filing			Exhibit Number	File Number
		(o)	Second Amendment to Memorandum of Understanding dated as of September 26, 2013, by and among PACCAR Engine Company, the Mississippi Development Authority and the Mississippi Major Economic Impact Authority	10-Q		November 7, 2013	10(u)			001-14817
		(p)	Third Amendment to Memorandum of Understanding dated as of November 12, 2019, by and among PACCAR Engine Company, the Mississippi Development Authority and the Mississippi Major Economic Impact Authority	10-K		February 19, 2020	10(r)			001-14817
		(q)	Second Amended and Restated PACCAR Inc Restricted Stock and Deferred Compensation Plan for Non-Employee Directors, Form of Amended Deferred Restricted Stock Unit Grant Agreement	10-K		February 26, 2015	10(t)			001-14817
		(r)	Second Amended and Restated PACCAR Inc Restricted Stock and Deferred Compensation Plan for Non-Employee Directors, Form of Amended Restricted Stock Grant Agreement	10-K		February 26, 2015	10(u)			001-14817
(21)			Subsidiaries of the registrant*
(23)			Consent of the independent registered public accounting firm*
(24)			Power of attorney – Powers of attorney of certain directors*
(31)			Rule 13a-14(a)/15d-14(a) Certifications:
		(a)	Certification of Principal Executive Officer*
		(b)	Certification of Principal Financial Officer*
(32)			Section 1350 Certifications:
			Certification pursuant to rule 13a-14(b) and section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. section 1350)*
(101.INS)			Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.*
(101.SCH)			Inline XBRL Taxonomy Extension Schema Document*
(101.CAL)			Inline XBRL Taxonomy Extension Calculation Linkbase Document*
(101.DEF)			Inline XBRL Taxonomy Extension Definition Linkbase Document*
(101.LAB)			Inline XBRL Taxonomy Extension Label Linkbase Document*
(101.PRE)			Inline XBRL Taxonomy Extension Presentation Linkbase Document*
(104)			Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)*

* filed herewith

(b) Exhibits (Exhibits filed with the Securities and Exchange Commission are not included herein.  Copies of exhibits will be furnished to stockholders at a cost of 25¢ per page upon written request addressed to Corporate Secretary, PACCAR Inc, P.O. Box 1518, Bellevue, Washington 98009).

(c) Financial Statement Schedules – All schedules are omitted because the required matter or conditions are not present or because the information required by the schedules is submitted as part of the consolidated financial statements and notes thereto.

82

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PACCAR Inc
	Registrant
Date: February 17, 2021	/s/ R. Preston Feight
	R. Preston Feight
	Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated.

Signature	Title
/s/ R. P. Feight	Chief Executive Officer and Director
R. P. Feight	(Principal Executive Officer)
/s/ H. C. A. M. Schippers	President and Chief Financial Officer
H. C. A. M. Schippers	(Principal Financial Officer)
/s/ M. T. Barkley	Senior Vice President and Controller
M. T. Barkley	(Principal Accounting Officer)
/s/ M. C. Pigott	Executive Chairman and Director
M. C. Pigott
*/s/ A. J. Carnwath	Director
A. J. Carnwath
*/s/ F. L. Feder	Director
F. L. Feder
*/s/ B. E. Ford	Director
B. E. Ford
*/s/ K. S. Hachigian	Director
K. S. Hachigian
*/s/ R. C. McGeary	Director
R. C. McGeary
*/s/ J. M. Pigott	Director
J. M. Pigott
*/s/ M. A. Schulz	Director
M. A. Schulz
*/s/ G. M. E. Spierkel	Director
G. M. E. Spierkel
*/s/ C. R. Williamson	Director
C. R. Williamson

*By	/s/ M. C. Pigott
	M. C. Pigott
	Attorney-in-Fact

83

EX-21

Exhibit 21

SUBSIDIARIES OF THE REGISTRANT (a)

Name	State or Country of Incorporation	Names Under Which Company Or Subsidiaries Do Business
PACCAR of Canada Ltd.	Canada	PACCAR of Canada Ltd.
		Canadian Kenworth Company
		Peterbilt of Canada
		PACCAR Parts of Canada
		Kenworth Montreal
PACCAR Australia Pty. Ltd.	Australia	PACCAR Australia Pty. Ltd.
		Kenworth Trucks
		PACCAR Parts
		DAF Trucks Australia
PACCAR Financial Pty. Ltd. (b)	Australia	PACCAR Financial Pty. Ltd.
PACCAR Mexico, S.A. de C.V.	Mexico	PACCAR Mexico, S.A. de C.V.
Kenworth Mexicana, S.A. de C.V. (c)	Mexico	Kenworth Mexicana, S.A. de C.V. KenMex
PACCAR Capital Mexico, S.A. de C.V. (c)	Mexico	PACCAR Capital Mexico, S.A. de C.V.
PACCAR Parts Mexico, S.A. de C.V. (c)	Mexico	PACCAR Parts Mexico, S.A. de C.V.
PacLease Mexicana, S.A. de C.V. (c)	Mexico	PacLease Mexicana, S.A. de C.V.
		PacLease
PACCAR Financial Mexico, S.A. de C.V. (d)	Mexico	PACCAR Financial Mexico, S.A. de C.V.
DAF Caminhões Brasil Indústria Ltda. (e)	Brasil	DAF Brasil
DAF Trucks N.V. (e)	Netherlands	DAF Trucks N.V.
		PACCAR Parts Europe
DAF Trucks Vlaanderen N.V. (f)	Belgium	DAF Trucks Vlaanderen N.V.
DAF Trucks Limited (U.K.) (f)	United Kingdom	DAF Trucks Limited (U.K.)
DAF Trucks Deutschland GmbH (f)	Germany	DAF Trucks Deutschland GmbH
DAF Trucks France, S.A.R.L. (f)	France	DAF Trucks France, S.A.R.L.
DAF Trucks Norge AS (f)	Norway	DAF Trucks Norge AS
DAF Vehiculos Industriales S.A.U. (f)	Spain	DAF Vehiculos Industriales S.A.U.
DAF Veicoli Industriali S.P.A. (f)	Italy	DAF Veicoli Industriali S.P.A.
DAF Trucks Polska SP.Z.O.O. (f)	Poland	DAF Trucks Polska SP.Z.O.O.
PACCAR Trucks U.K. Ltd. (e)	England and Wales	PACCAR Trucks U.K. Ltd.
PACCAR Parts U.K. Limited (g)	England and Wales	PACCAR Parts U.K. Limited
Leyland Trucks Limited (h)	England and Wales	Leyland Trucks Limited
PACCAR Engine Company	Mississippi	PACCAR Engine Company
PACCAR Winch Inc	Delaware	PACCAR Winch
PACCAR Financial Corp.	Washington	PACCAR Financial Corp.
		PACCAR Leasing Company

SUBSIDIARIES OF THE REGISTRANT (a)

Name	State or Country of Incorporation	Names Under Which Company Or Subsidiaries Do Business
PACCAR Financial Services Ltd. (i)	Canada	PACCAR Financial Services Ltd.
		PACCAR Leasing Company
PACCAR Financial Ltd. (j)	Canada	PACCAR Financial Ltd.
PACCAR Sales North America, Inc.	Delaware	PACCAR Sales North America, Inc.
PACCAR Holding B.V. (k)	Netherlands	PACCAR Holding B.V.
PACCAR Financial Europe B.V. (e)	Netherlands	PACCAR Financial Europe B.V.
PACCAR Financial Holdings Europe B.V. (l)	Netherlands	PACCAR Financial Holdings Europe B.V.
PACCAR Financial Belux BVBA (m)	Belgium	PACCAR Financial Belux BVBA
PACCAR Financial Deutschland GmbH (m)	Germany	PACCAR Financial Deutschland GmbH
PACCAR Leasing GmbH (m)	Germany	PACCAR Leasing Europe
PACCAR Financial Espana S.L.U. (m)	Spain	PACCAR Financial Espana S.L.U.
PACCAR Financial France S.A.S. (m)	France	PACCAR Financial France S.A.S.
PACCAR Financial Italia S.r.l. (m)	Italy	PACCAR Financial Italia S.r.l.
PACCAR Financial PLC (m)	United Kingdom	PACCAR Financial PLC
PACCAR Financial Nederland B.V. (m)	Netherlands	PACCAR Financial Nederland B.V.
PACCAR Financial Services Europe B.V. (m)	Netherlands	PACCAR Financial Services Europe B.V.
PACCAR Participações Ltda. (l)	Brasil	PACCAR Participações Ltda.
Banco PACCAR S.A. (n)	Brasil	Banco PACCAR S.A.
PACCAR Holdings Panamá, S.A. (k)	Panama	PACCAR Holdings Panamá, S.A.
PACCAR Colombia S.A.S. (k)	Columbia	PACCAR Colombia S.A.S.

(a) The names of some subsidiaries have been omitted. Considered in the aggregate, omitted subsidiaries would not constitute a significant subsidiary. Unless otherwise noted, each subsidiary listed below is a wholly owned direct subsidiary of PACCAR Inc.

(b) A wholly owned subsidiary of PACCAR Australia Pty. Ltd.

(c) A wholly owned subsidiary of PACCAR Mexico, S.A. de C.V.

(d) A wholly owned subsidiary of Truck Acceptance LLC, which is a wholly owned subsidiary of PACCAR Capital Mexico, S.A. de C.V

(e) A wholly owned subsidiary of PACCAR Holding B.V.

(f) A wholly owned subsidiary of DAF Trucks N.V.

(g) A wholly owned subsidiary of PACCAR Trucks U.K. Ltd.

(h) A wholly owned subsidiary of PACCAR Parts U.K. Limited

(i) A wholly owned subsidiary of PACCAR of Canada Ltd.

(j) A wholly owned subsidiary of PACCAR Financial Services Ltd.

(k) A wholly owned subsidiary of PACCAR Sales North America, Inc.

(l) A wholly owned subsidiary of PACCAR Financial Europe B.V.

(m) A wholly owned subsidiary of PACCAR Financial Holdings Europe B.V.

(n) A wholly owned subsidiary of PACCAR Participações Ltda.

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

A. the Registration Statement (Form S-8 No. 333-190467) pertaining to the PACCAR Inc Savings Investment Plan,

B. the Registration Statement (Form S-8 No. 333-139544) pertaining to the PACCAR Inc Savings Investment Plan,

C. the Registration Statement (Form S-8 No. 333-120238) pertaining to the PACCAR Inc Restricted Stock and Deferred Compensation Plan for Non-Employee Directors,

D. the Registration Statement (Form S-8 No. 333-103706) pertaining to the Long Term Incentive Plan of PACCAR Inc,

E. the Registration Statement (Form S-8 No. 333-52230) pertaining to the PACCAR Inc Savings Investment Plan,

F. the Registration Statement (Form S-8 No. 333-36712) pertaining to the PACCAR Inc Restricted Stock and Deferred Compensation Plan for Non-Employee Directors,

G. the Registration Statement (Form S-8 No. 333-39161) pertaining to the 1991 Long Term Incentive Plan of PACCAR Inc, and

H. the Registration Statement (Form S-8 No. 33-47763) pertaining to the 1991 Long Term Incentive Plan of PACCAR Inc;

of our reports dated February 17, 2021, with respect to the consolidated financial statements of PACCAR Inc and the effectiveness of internal control over financial reporting of PACCAR Inc included in this Annual Report (Form 10-K) of PACCAR Inc for the year ended December 31, 2020.

/s/ Ernst & Young LLP

Seattle, Washington

February 17, 2021

EX-24

Exhibit 24

POWER OF ATTORNEY

We, the undersigned directors of PACCAR Inc (the “Company”), a Delaware corporation, hereby severally constitute and appoint M. C. Pigott our true and lawful attorney-in-fact, to sign for us, in our names and in our capacity as directors, an Annual  Report on Form 10-K on behalf of the Company for the year ending December 31, 2020 and any amendments thereto, and to file the same with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

IN WITNESS WHEREOF, each of the undersigned has executed this power of attorney as of this 8^th day of December, 2020.

/s/ A. J. Carnwath	/s/ R. C. McGeary
A. J. Carnwath	R. C. McGeary
Director, PACCAR Inc	Director, PACCAR Inc
/s/ F. L. Feder	/s/ J. M. Pigott
F. L. Feder	J. M. Pigott
Director, PACCAR Inc	Director, PACCAR Inc
/s/ R. P. Feight	/s/ M. A. Schulz
R. P. Feight	M. A. Schulz
Director, PACCAR Inc	Director, PACCAR Inc
/s/ B. E. Ford	/s/ G. M. E. Spierkel
B. E. Ford	G. M. E. Spierkel
Director, PACCAR Inc	Director, PACCAR Inc
/s/ K. S. Hachigian	/s/ C. R. Williamson
K. S. Hachigian	C. R. Williamson
Director, PACCAR Inc	Director, PACCAR Inc

EX-31.(A)

Exhibit 31(a)

CERTIFICATION

I, R. Preston Feight, certify that:

1. I have reviewed this annual report on Form 10-K of PACCAR Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date February 17, 2021

/s/ R. Preston Feight

R. Preston Feight

Chief Executive Officer

(Principal Executive Officer)

EX-31.(B)

Exhibit 31(b)

CERTIFICATION

I, Harrie C.A.M. Schippers, certify that:

1. I have reviewed this annual report on Form 10-K of PACCAR Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date February 17, 2021

/s/ Harrie C.A.M. Schippers

Harrie C.A.M. Schippers

President and Chief Financial Officer

(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

In connection with the Annual Report of PACCAR Inc (the “Company”) on Form 10-K for the year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify, pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. section 1350), that to the best of our knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date February 17, 2021	By	/s/ R. Preston Feight
		R. Preston Feight
		Chief Executive Officer
		PACCAR Inc
		(Principal Executive Officer)
	By	/s/ Harrie C.A.M. Schippers
		Harrie C.A.M. Schippers
		President and Chief Financial Officer
		PACCAR Inc
		(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2020

Jan. 31, 2021

Jun. 30, 2020

Cover [Abstract]

Document Type

10-K

Amendment Flag

false

Document Period End Date

Dec. 31, 2020

Document Fiscal Year Focus

2020

Document Fiscal Period Focus

FY

Entity Registrant Name

PACCAR Inc

Entity Central Index Key

0000075362

Current Fiscal Year End Date

--12-31

Entity Well-known Seasoned Issuer

Yes

Entity Current Reporting Status

Yes

Entity Voluntary Filers

No

Entity Interactive Data Current

Yes

Entity Filer Category

Large Accelerated Filer

Entity Emerging Growth Company

false

Entity Small Business

false

Entity Shell Company

false

Entity Common Stock, Shares Outstanding

346,936,820

Entity Public Float

$ 25,440

Entity File Number

001-14817

Entity Incorporation, State or Country Code

DE

Entity Tax Identification Number

91-0351110

Entity Address, Address Line One

777 - 106th Ave. N.E.

Entity Address, City or Town

Bellevue

Entity Address, State or Province

WA

Entity Address, Postal Zip Code

98004

City Area Code

425

Local Phone Number

468-7400

Document Transition Report

false

Document Annual Report

true

ICFR Auditor Attestation Flag

true

Title of Each Class

Common Stock, $1 par value

Trading Symbol

PCAR

Name of Each Exchange on Which Registered

NASDAQ

Documents Incorporated by Reference

Portions of the proxy statement for the annual stockholders meeting to be held on April 27, 2021 are incorporated by reference into Part III.

XML

Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues	$ 18,728.5	$ 25,599.7	$ 23,495.7
Provision for losses on receivables	28.8	15.4	16.5
Investment income	35.9	82.3	60.9
Income before income taxes	1,657.9	3,099.2	2,810.2
Income taxes	359.5	711.3	615.1
Net Income	$ 1,298.4	$ 2,387.9	$ 2,195.1
Net Income Per Share
Basic	$ 3.74	$ 6.88	$ 6.25
Diluted	$ 3.74	$ 6.87	$ 6.24
Weighted Average Number of Common Shares Outstanding
Basic	346.8	346.9	351.0
Diluted	347.4	347.5	351.8
Truck, Parts and Other
Net sales and revenues	$ 17,154.3	$ 24,119.7	$ 22,138.6
Cost of sales and revenues	15,076.4	20,555.6	18,925.0
Research and development	273.9	326.6	306.1
Selling, general and administrative	459.2	561.5	524.9
Interest and other (income), net	(54.1)	(42.0)	(60.8)
Costs and Expenses, Total	15,755.4	21,401.7	19,695.2
Income before income taxes	1,398.9	2,718.0	2,443.4
Financial Services
Interest and fees	527.4	583.0	497.7
Operating lease, rental and other revenues	1,046.8	897.0	859.4
Revenues	1,574.2	1,480.0	1,357.1
Interest and other borrowing expenses	192.1	230.5	186.9
Depreciation and other expenses	1,008.0	798.2	728.0
Selling, general and administrative	122.2	137.0	119.8
Provision for losses on receivables	28.8	15.4	16.5
Costs and Expenses, Total	1,351.1	1,181.1	1,051.2
Income before income taxes	$ 223.1	$ 298.9	$ 305.9

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 1,298.4	$ 2,387.9	$ 2,195.1
Unrealized (losses) gains on derivative contracts
Net (loss) gain arising during the period	(105.3)	(76.1)	121.6
Tax effect	26.9	19.1	(30.7)
Reclassification adjustment	87.6	51.7	(121.5)
Tax effect	(23.1)	(12.0)	31.0
Net current period OCI, unrealized gains and (losses) on derivative contracts	(13.9)	(17.3)	0.4
Unrealized gains on marketable debt securities
Net holding gain	13.6	11.6	0.2
Tax effect	(3.3)	(2.9)	(0.1)
Reclassification adjustment	(2.4)	(0.4)	(0.2)
Tax effect	0.6	0.1	0.1
Net current period OCI, unrealized gains on marketable debt securities	8.5	8.4
Pension plans
Net loss arising during the period	(132.4)	(74.8)	(114.0)
Tax effect	28.4	18.0	27.2
Reclassification adjustment	57.3	21.9	36.7
Tax effect	(13.7)	(5.0)	(8.7)
Net current period OCI, pension plans	(60.4)	(39.9)	(58.8)
Foreign currency translation gain (loss)	115.6	47.2	(213.3)
Net other comprehensive income (loss)	49.8	(1.6)	(271.7)
Comprehensive Income	$ 1,348.2	$ 2,386.3	$ 1,923.4

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
ASSETS
Equipment on operating leases, net	$ 3,584.7	$ 3,648.1
Property, plant and equipment, net	3,270.4	2,883.8
Total Assets	28,260.0	28,361.1
STOCKHOLDERS' EQUITY:
Preferred stock, no par value - authorized 1.0 million shares, none issued
Common stock, $1 par value - authorized 1.2 billion shares; issued 346.6 million and 346.3 million shares	346.6	346.3
Additional paid-in capital	88.5	61.4
Retained earnings	11,005.2	10,398.5
Accumulated other comprehensive loss	(1,050.3)	(1,100.1)
Total Stockholders’ Equity	10,390.0	9,706.1
Liabilities and Equity, Total	28,260.0	28,361.1
Truck, Parts and Other
ASSETS
Cash and cash equivalents	3,405.0	4,007.3
Trade and other receivables, net (allowance for losses: 2020 - $.6, 2019 - $.6)	1,197.5	1,306.1
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	1,429.0	1,162.1
Inventories, net	1,221.9	1,153.2
Other current assets	515.6	388.0
Total Truck, Parts and Other Current Assets	7,769.0	8,016.7
Equipment on operating leases, net	421.9	545.5
Property, plant and equipment, net	3,270.4	2,883.8
Other noncurrent assets, net	998.9	843.7
Total Assets	12,460.2	12,289.7
Liabilities
Accounts payable, accrued expenses and other	3,413.9	3,194.2
Dividend payable	242.6	796.5
Total Truck, Parts and Other Current Liabilities	3,656.5	3,990.7
Residual value guarantees and deferred revenues	457.4	587.3
Other liabilities	1,487.2	1,435.1
Total Liabilities	5,601.1	6,013.1
Financial Services
ASSETS
Cash and cash equivalents	134.6	167.8
Finance and other receivables, net (allowance for losses: 2020 - $127.0, 2019 - $112.4)	11,820.7	12,086.0
Equipment on operating leases, net	3,162.8	3,102.6
Other assets	681.7	715.0
Total Assets	15,799.8	16,071.4
Liabilities
Accounts payable, accrued expenses and other	561.0	629.0
Commercial paper and bank loans	3,344.4	4,110.2
Term notes	7,508.9	7,112.5
Deferred taxes and other liabilities	854.6	790.2
Total Liabilities	$ 12,268.9	12,641.9
STOCKHOLDERS' EQUITY:
Retained earnings		$ 10,398.5

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Marketable debt securities, allowance	$ 0	$ 0
Preferred stock, no par value	$ 0	$ 0
Preferred stock, authorized	1,000,000.0	1,000,000.0
Preferred stock, issued	0	0
Common stock, par value	$ 1	$ 1
Common stock, authorized	1,200,000,000	1,200,000,000
Common stock, issued	346,600,000	346,300,000
Truck, Parts and Other
Allowance for losses	$ 600,000	$ 600,000
Marketable debt securities, amortized cost	1,409,700,000	1,154,000,000.0
Marketable debt securities, allowance	0	0
Financial Services
Allowance for credit losses	$ 127,000,000.0	$ 112,400,000

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
OPERATING ACTIVITIES:
Net Income	$ 1,298.4	$ 2,387.9	$ 2,195.1
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization, Property, plant and equipment	249.6	322.2	337.6
Depreciation and amortization, Equipment on operating leases and other	799.4	755.1	716.5
Provision for losses on financial services receivables	28.8	15.4	16.5
Deferred taxes	(0.5)	70.8	17.5
Other, net	20.4	26.6	35.1
Pension contributions	(184.9)	(35.7)	(88.9)
Decrease (increase) in assets other than cash and cash equivalents:
Trade and other receivables	121.8	(72.3)	(299.1)
Wholesale receivables on new trucks	871.2	(520.2)	(512.3)
Inventories	(48.2)	24.6	(332.7)
Other assets, net	(133.8)	(365.4)	(187.0)
(Decrease) increase in liabilities:
Accounts payable and accrued expenses	(53.6)	(27.6)	528.9
Residual value guarantees and deferred revenues	(127.8)	(179.7)	275.0
Other liabilities, net	146.4	458.6	290.1
Net Cash Provided by Operating Activities	2,987.2	2,860.3	2,992.3
INVESTING ACTIVITIES:
Originations of retail loans and finance leases	(3,917.3)	(4,081.8)	(3,858.9)
Collections on retail loans and finance leases	3,252.0	3,388.8	2,914.0
Net decrease (increase) in wholesale receivables on used equipment	53.3	(47.7)	(0.9)
Purchases of marketable debt securities	(842.4)	(850.6)	(615.9)
Proceeds from sales and maturities of marketable debt securities	597.8	715.5	931.5
Payments for property, plant and equipment	(550.4)	(574.0)	(457.6)
Acquisitions of equipment for operating leases	(1,088.0)	(1,396.8)	(1,494.7)
Proceeds from asset disposals	601.9	638.1	653.7
Other, net	17.3	1.1	(1.9)
Net Cash Used in Investing Activities	(1,875.8)	(2,207.4)	(1,930.7)
FINANCING ACTIVITIES:
Payments of cash dividends	(1,239.8)	(1,138.6)	(804.3)
Purchases of treasury stock	(42.1)	(110.2)	(354.4)
Proceeds from stock compensation transactions	53.7	60.8	19.3
Net (decrease) increase in commercial paper, short-term bank loans and other	(831.9)	557.1	625.9
Proceeds from term debt	2,150.1	2,504.3	2,339.9
Payments on term debt	(1,898.5)	(1,790.0)	(1,755.3)
Net Cash (Used in) Provided by Financing Activities	(1,808.5)	83.4	71.1
Effect of exchange rate changes on cash	61.6	2.9	(61.5)
Net (Decrease) Increase in Cash and Cash Equivalents	(635.5)	739.2	1,071.2
Cash and cash equivalents at beginning of year	4,175.1	3,435.9	2,364.7
Cash and cash equivalents at end of year	$ 3,539.6	$ 4,175.1	$ 3,435.9

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions	Total	COMMON STOCK, $1 PAR VALUE:	ADDITIONAL PAID-IN CAPITAL:	TREASURY STOCK, AT COST:	RETAINED EARNINGS:	RETAINED EARNINGS: Cumulative Effect, Period of Adoption, Adjustment	ACCUMULATED OTHER COMPREHENSIVE LOSS:
Beginning balance at Dec. 31, 2017		$ 351.8	$ 123.2		$ 8,369.1		$ (793.6)
Net income	$ 2,195.1				2,195.1
Purchases, shares: 2020 - .71; 2019 - 1.68; 2018 - 5.85				$ (354.4)
Cash dividends declared on common stock,per share: 2020 - $1.98; 2019 - $3.58; 2018 - $3.09					(1,078.8)
Treasury stock retirement		(5.8)	(88.3)	354.4	(260.3)
Stock compensation		0.6
Stock compensation and tax benefit			34.5
Other comprehensive income (loss)	(271.7)						(271.7)
Reclassifications to retained earnings in accordance with ASU 2018-02							(33.2)
Ending balance at Dec. 31, 2018	8,592.9	346.6	69.4		9,275.4	$ 50.3	(1,098.5)
Net income	2,387.9				2,387.9
Purchases, shares: 2020 - .71; 2019 - 1.68; 2018 - 5.85				(110.2)
Cash dividends declared on common stock,per share: 2020 - $1.98; 2019 - $3.58; 2018 - $3.09					(1,242.0)
Treasury stock retirement		(1.7)	(85.7)	110.2	(22.8)
Stock compensation		1.4
Stock compensation and tax benefit			77.7
Other comprehensive income (loss)	(1.6)						(1.6)
Ending balance at Dec. 31, 2019	9,706.1	346.3	61.4		10,398.5		(1,100.1)
Net income	1,298.4				1,298.4
Purchases, shares: 2020 - .71; 2019 - 1.68; 2018 - 5.85				(42.1)
Cash dividends declared on common stock,per share: 2020 - $1.98; 2019 - $3.58; 2018 - $3.09					(687.1)
Treasury stock retirement		(0.7)	(41.4)	$ 42.1
Stock compensation		1.0
Stock compensation and tax benefit			68.5
Other comprehensive income (loss)	49.8						49.8
Ending balance at Dec. 31, 2020	$ 10,390.0	$ 346.6	$ 88.5		$ 11,005.2	$ (4.6)	$ (1,050.3)

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Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
TREASURY STOCK, AT COST:
Purchases, shares	710,000	1,680,000	5,850,000
RETAINED EARNINGS:
Cash dividends declared on common stock, per share	$ 1.98	$ 3.58	$ 3.09

XML

Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Significant Accounting Policies

A. SIGNIFICANT ACCOUNTING POLICIES

Description of Operations: PACCAR Inc (the Company or PACCAR) is a multinational company operating in three principal segments: (1) the Truck segment includes the design and manufacture of high-quality, light-, medium- and heavy-duty commercial trucks; (2) the Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles; and (3) the Financial Services segment (PFS) 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. PACCAR’s sales and revenues are derived primarily from North America and Europe. The Company also operates in Australia and Brasil and sells trucks and parts to customers in Asia, Africa, the Middle East and South America.

Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned domestic and foreign subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.

Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue Recognition:

Truck, Parts and Other: The Company enters into sales contracts with customers associated with purchases of the Company’s products and services including trucks, parts, product support, and other related services. Generally, the Company recognizes revenue for the amount of consideration it will receive for delivering a product or service to a customer. Revenue is recognized when the customer obtains control of the product or receives benefits of the service. The Company excludes sales taxes, value added taxes and other related taxes assessed by government agencies from revenue. There are no significant financing components included in product or services revenue since generally customers pay shortly after the products or services are transferred. In the Truck and Parts segment, when the Company grants extended payment terms on selected receivables and charges interest, interest income is recognized when earned.

The Company recognizes truck and parts sales as revenue when control of the products is transferred to customers which generally occurs upon shipment, except for certain truck sales which are subject to a residual value guarantee (RVG) by the Company. The standard payment term for trucks and aftermarket parts is typically within 30 days, but the Company may grant extended payment terms on selected receivables. The Company recognizes revenue for the invoice amount adjusted for estimated sales incentives and returns. Sales incentives and returns are estimated based on historical experience and are adjusted to current period revenue when the most likely amount of consideration the Company expects to receive changes or becomes fixed. Truck and part sales include a standard product warranty which is included in cost of sales. The Company has elected to treat delivery services as a fulfillment activity with revenues recognized when the customer obtains control of the product. Delivery revenue is included in revenues and the related costs are included in cost of sales. As a practical expedient, the Company is not disclosing truck order backlog, as a significant majority of the backlog has a duration of less than one year.

Truck sales with RVGs that allow customers the option to return their truck are accounted for as a sale when the customer does not have an economic incentive to return the truck to the Company, or as an operating lease when the customer does have an economic incentive to return the truck. The estimate of customers’ economic incentive to return the trucks is based on an analysis of historical guaranteed buyback value and estimated market value. When truck sales with RVGs are accounted for as a sale, revenue is recognized when the truck is transferred to the customer less an amount for expected returns. Expected return rates are estimated by using a historical weighted average return rate over a seven-year period. The estimated value of the truck assets to be returned and the related return liabilities at December 31, 2020 were $627.9 and $664.1, respectively, compared to $473.0 and $503.4 at December 31, 2019, respectively. The Company’s total commitment to acquire trucks at a guaranteed value for contracts accounted for as a sale was $1,184.7 at December 31, 2020.

Revenues from extended warranties, operating leases and other include optional extended warranty and repair and maintenance (R&M) service contracts which can be purchased for periods generally ranging up to five years. The Company defers revenue based on stand-alone observable selling prices when it receives payments in advance and generally recognizes the revenue on a straight-line basis over the warranty or R&M contract periods. See Note I, Product Support Liabilities, in the Notes to the Consolidated Financial Statements for further information. Also included are truck sales with an RVG accounted for as an operating lease. A liability is created for the residual value obligation with the remainder of the proceeds recorded as deferred revenue. The deferred revenue is recognized on a straight-line basis over the guarantee period, which typically ranges from three to five years. Total operating lease income from truck sales with RVGs for the years ended December 31, 2020, 2019 and 2018 was $104.2, $159.7 and $152.6, respectively.

Aftermarket parts sales allow for returns which are estimated at the time of sale based on historical data. At December 31, 2020, the estimated value of the returned goods asset and the related return liability were $62.2 and $142.0, respectively, compared to $56.3 and $126.3 at December 31, 2019, respectively. Parts dealer services and other revenues are recognized as services are performed.     

Revenue from winch sales and other is primarily derived from the industrial winch business. Winch sales are recognized when the product is transferred to a customer, which generally occurs upon shipment. Also within this category are other revenues not attributable to a reportable segment.

Financial Services: The Company’s Financial Services segment products include loans to customers collateralized by the vehicles being financed, finance leases to lease equipment to retail customers and dealers, dealer wholesale financing which includes floating-rate wholesale loans to PACCAR dealers for new and used trucks, and operating leases which include rentals on Company owned equipment. Interest income from finance and other receivables is recognized using the interest method. Certain loan origination costs are deferred and amortized to interest income over the expected life of the contracts using the straight-line method which approximates the interest method.

Operating lease rental revenue is recognized on a straight-line basis over the term of the lease. Customer contracts may include additional services such as excess mileage, repair and maintenance and other services on which revenue is recognized when earned. The Company’s full-service lease arrangements bundle these additional services. Rents for full-service lease contracts are allocated between lease and non-lease components based on the relative stand-alone price of each component. Taxes, such as sales and use and value added, which are collected by the Company from a customer, are excluded from the measurement of lease income and expenses. Rental revenues for the years ended December 31, 2020, 2019 and 2018 were $802.3, $798.2 and $797.1, respectively. Depreciation and related leased unit operating expenses were $776.5, $721.6 and $686.9 for the years ended December 31, 2020, 2019 and 2018, respectively.

Recognition of interest income and rental revenue is suspended (put on non-accrual status) when the receivable becomes more than 90 days past the contractual due date or earlier if some other event causes the Company to determine that collection is not probable. Accordingly, no finance receivables more than 90 days past due were accruing interest at December 31, 2020 or December 31, 2019. Recognition is resumed if the receivable becomes current by the payment of all amounts due under the terms of the existing contract and collection of remaining amounts is considered probable (if not contractually modified) or if the customer makes scheduled payments for three months and collection of remaining amounts is considered probable (if contractually modified). Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms.

Finance leases are secured by the trucks and related equipment being leased and the lease terms generally range from three to five years depending on the type and use of the equipment. The lessee is required to either purchase the equipment or guarantee to the Company a stated residual value upon the disposition of the equipment at the end of the finance lease term.

Operating lease terms generally range from three to five years. At the end of the operating lease term, the lessee has the option to return the equipment to the Company or purchase the equipment at its fair market value.  

The Company determines its estimate of the residual value of leased vehicles by considering the length of the lease term, the truck model, the expected usage of the truck and anticipated market demand. If the sales price of the truck at the end of the agreement differs from the Company’s estimated residual value, a gain or loss will result. Future market conditions, changes in government regulations and other factors outside the Company’s control could impact the ultimate sales price of trucks returned under these contracts. Residual values are reviewed regularly and adjusted if market conditions warrant.

Cash and Cash Equivalents: Cash equivalents consist of liquid investments with a maturity at date of purchase of 90 days or less.

Marketable Debt Securities: The Company's investments in marketable debt securities are classified as available-for-sale. These investments are stated at fair value and may include an allowance for credit losses. Changes in the allowance for credit losses are recognized in the current period earnings and any unrealized gains or losses, net of tax, are included as a component of accumulated other comprehensive income (loss) (AOCI).

The Company utilizes third-party pricing services for all of its marketable debt security valuations. The Company reviews the pricing methodology used by the third-party pricing services, including the manner employed to collect market information. On a quarterly basis, the Company also performs review and validation procedures on the pricing information received from the third-party

providers. These procedures help ensure the fair value information used by the Company is determined in accordance with applicable accounting guidance.

The Company evaluates its investment in marketable debt securities at the end of each reporting period to determine if a decline in fair value is the result of credit losses or unrealized losses. In assessing credit losses, the Company considers the collectability of principal and interest payments by monitoring changes to issuers’ credit ratings, specific credit events associated with individual issuers as well as the credit ratings of any financial guarantor. The Company considers its intent for selling the security and whether it is more likely than not the Company will be able to hold the security until the recovery of any credit losses and unrealized losses. Charges against the allowance for credit losses occur when a security with credit losses is sold or the Company no longer intends to hold that security.

Receivables:

Trade and Other Receivables: The Company’s trade and other receivables are recorded at cost, net of allowances. At December 31, 2020 and 2019, respectively, trade and other receivables included trade receivables from dealers and customers of $942.7 and $1,055.0 and other receivables of $254.8 and $251.1 relating primarily to value added tax receivables and supplier allowances and rebates.

Finance and Other Receivables:

Loans – Loans represent fixed or floating-rate loans to customers collateralized by the vehicles purchased and are recorded at amortized cost.

Finance leases – Finance leases are sales-type finance leases, which lease equipment to retail customers and dealers. These leases are reported as the sum of minimum lease payments receivable and estimated residual value of the property subject to the contracts, reduced by unearned interest.

Dealer wholesale financing – Dealer wholesale financing is floating-rate wholesale loans to PACCAR dealers for new and used trucks and are recorded at amortized cost. The loans are collateralized by the trucks being financed.

Operating lease receivables and other – Operating lease receivables and other include monthly rentals due on operating leases, unamortized loan and lease origination costs, interest on loans and other amounts due within one year in the normal course of business.

Allowance for Credit Losses:

Truck, Parts and Other: The Company historically has not experienced significant losses or past due amounts on trade and other receivables in its Truck, Parts and Other businesses. Accounts are considered past due once the unpaid balance is over 30 days outstanding based on contractual payment terms. Accounts are charged off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible. The allowance for credit losses for Truck, Parts and Other was $.6 for the years ended December 31, 2020 and 2019. Net charge-offs were nil, $.3 and $.1 for the years ended December 31, 2020, 2019 and 2018, respectively.

Financial Services: The Company continuously monitors the payment performance of its finance receivables. For large retail finance customers and dealers with wholesale financing, the Company regularly reviews their financial statements and makes site visits and phone contact as appropriate. If the Company becomes aware of circumstances that could cause those customers or dealers to face financial difficulty, whether or not they are past due, the customers are placed on a watch list.

The Company modifies loans and finance leases in the normal course of its Financial Services operations. 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. Modifications for credit reasons are changes to contract terms for customers considered to be in financial difficulty. 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. When the Company modifies a loan or finance lease for credit reasons and grants a concession, the modification is classified as a troubled debt restructuring (TDR). The Company does not typically grant credit modifications for customers that do not meet minimum underwriting standards since the Company normally repossesses the financed equipment in these circumstances. When such modifications do occur, they are considered TDRs. In accordance with FASB statement, Prudential Regulator Guidance Concerning

Troubled Debt Restructurings, issued on March 22, 2020, short-term modifications granted to customers were not considered TDRs if they were not past due and were seeking to manage their liquidity needs because of the effects of the COVID-19 pandemic.

On average, modifications extended contractual terms by approximately three months in 2020 and five months in 2019 and did not have a significant effect on the weighted average term or interest rate of the total portfolio at December 31, 2020 and 2019.

The Company has developed a systematic methodology for determining the allowance for credit losses for its two portfolio segments, retail and wholesale. The retail segment consists of retail loans and sales-type finance leases, net of unearned interest. The wholesale segment consists of truck inventory financing loans to dealers that are collateralized by trucks and other collateral. The wholesale segment generally has less risk than the retail segment. Wholesale receivables generally are shorter in duration than retail receivables, and the Company requires periodic reporting of the wholesale dealer’s financial condition, conducts periodic audits of the trucks being financed and in many cases, obtains guarantees or other security such as dealership assets. In determining the allowance for credit losses, retail loans and finance leases are evaluated together since they relate to a similar customer base, their contractual terms require regular payment of principal and interest, generally over three to five years, and they are secured by the same type of collateral. The allowance for credit losses consists of both specific and general reserves.

The Company individually evaluates certain finance receivables for impairment. Finance receivables that are evaluated individually for impairment consist of all wholesale accounts and certain large retail accounts with past due balances or otherwise determined to be at a higher risk of loss. A finance receivable is impaired if it is considered probable the Company will be unable to collect all contractual interest and principal payments as scheduled. In addition, all retail loans and leases which have been classified as TDRs and all customer accounts over 90 days past due are considered impaired. Generally, impaired accounts are on non-accrual status. Impaired accounts classified as TDRs which have been performing for 90 consecutive days are placed on accrual status if it is deemed probable that the Company will collect all principal and interest payments.

Impaired receivables are generally considered collateral dependent. Large balance retail and all wholesale impaired receivables are individually evaluated to determine the appropriate reserve for losses. The determination of reserves for large balance impaired receivables considers the fair value of the associated collateral. When the underlying collateral fair value exceeds the Company’s amortized cost basis, no reserve is recorded. Small balance impaired receivables with similar risk characteristics are evaluated as a separate pool to determine the appropriate reserve for losses using the historical loss information discussed below.

The Company evaluates finance receivables that are not individually impaired and share similar risk characteristics on a collective basis and determines the general allowance for credit losses for both retail and wholesale receivables based on historical loss information, using past due account data, current market conditions, and expected changes in future macroeconomic conditions that affect collectability. Historical credit loss data provides relevant information of expected credit losses. The historical information used includes assumptions regarding the likelihood of collecting current and past due accounts, repossession rates, and the recovery rate on the underlying collateral based on used truck values and other pledged collateral or recourse.

The Company has developed a range of loss estimates for each of its country portfolios based on historical experience, taking into account loss frequency and severity in both strong and weak truck market conditions. A projection is made of the range of estimated credit losses inherent in the portfolio from which an amount is determined based on current market conditions and other factors impacting the creditworthiness of the Company’s borrowers and their ability to repay. Adjustments to historical loss information are made for changes in forecasted economic conditions that are specific to the industry and markets in which the Company conducts business. The Company utilizes economic forecasts from third party sources and determines expected losses based on historical experience under similar market conditions. After determining the appropriate level of the allowance for credit losses, a provision for losses on finance receivables is charged to income as necessary to reflect management’s estimate of expected credit losses, net of recoveries, inherent in the portfolio.

In determining the fair value of the collateral, the Company uses a pricing matrix and categorizes the fair value as Level 2 in the hierarchy of fair value measurement. The pricing matrix is reviewed quarterly and updated as appropriate. The pricing matrix considers the make, model and year of the equipment as well as recent sales prices of comparable equipment sold individually, which

is the lowest unit of account, through wholesale channels to the Company’s dealers (principal market). The fair value of the collateral also considers the overall condition of the equipment.

Accounts are charged off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible, which generally occurs upon repossession of the collateral. Typically the timing between the repossession and charge-off is not significant. In cases where repossession is delayed (e.g., for legal proceedings), the Company records a partial charge-off. The charge-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost basis.

Inventories: Inventories are stated at the lower of cost or market. Cost of inventories in the U.S. is determined principally by the last‑in, first-out (LIFO) method. Cost of all other inventories is determined principally by the first-in, first-out (FIFO) method. Cost of sales and revenues include shipping and handling costs incurred to deliver products to dealers and customers.

Equipment on Operating Leases: The Company’s Financial Services segment leases equipment under operating leases to its customers. In addition, in the Truck segment, equipment sold to customers in Europe subject to an RVG by the Company may be accounted for as an operating lease. Equipment is recorded at cost and is depreciated on the straight-line basis to the lower of the estimated residual value or guarantee value. Lease and guarantee periods generally range from three to five years. Estimated useful lives of the equipment range from three to ten years. The Company reviews residual values of equipment on operating leases periodically to determine that recorded amounts are appropriate.

Property, Plant and Equipment: Property, plant and equipment are stated at cost. Depreciation is computed by the straight-line method based on the estimated useful lives of various classes of assets. Certain production tooling and equipment are amortized on a unit of production basis.

Long-lived Assets and Goodwill: The Company evaluates the carrying value of property, plant and equipment when events and circumstances warrant a review. Goodwill is tested for impairment at least on an annual basis. There were no significant impairment charges for the three years ended December 31, 2020. Goodwill was $118.8 and $109.1 at December 31, 2020 and 2019, respectively. The increase in value was due to currency translation.

Product Support Liabilities: Product support liabilities include estimated future payments related to product warranties and deferred revenues on optional extended warranties and R&M contracts. The Company generally offers one year warranties covering most of its vehicles and related aftermarket parts. For vehicles equipped with engines manufactured by PACCAR, the Company generally offers two year warranties on the engine. Specific terms and conditions vary depending on the product and the country of sale. Optional extended warranty and R&M contracts can be purchased for periods which generally range up to five years. Warranty expenses and reserves are estimated and recorded at the time products or contracts are sold based on historical and current data and reasonable expectations for the future regarding the frequency and cost of warranty claims, net of any recoveries. The Company periodically assesses the adequacy of its recorded liabilities and adjusts them as appropriate to reflect actual experience. Revenue from extended warranty and R&M contracts is deferred and recognized to income generally on a straight-line basis over the contract period. Warranty and R&M costs on these contracts are recognized as incurred.

Derivative Financial Instruments: As part of its risk management strategy, the Company enters into derivative contracts to hedge against interest rate and foreign currency risk. Certain derivative instruments designated as fair value hedges, cash flow hedges or net investment hedges are subject to hedge accounting. Derivative instruments that are not subject to hedge accounting are held as derivatives not designated as hedged instruments. The Company’s policies prohibit the use of derivatives for speculation or trading. At the inception of each hedge relationship, the Company documents its risk management objectives, procedures and accounting treatment. All of the Company’s interest-rate and certain foreign-exchange contracts are transacted under International Swaps and Derivatives Association (ISDA) master agreements. Each agreement permits the net settlement of amounts owed in the event of default and certain other termination events. For derivative financial instruments, the Company has elected not to offset derivative positions in the balance sheet with the same counterparty under the same agreements and is not required to post or receive collateral.

Exposure limits and minimum credit ratings are used to minimize the risks of counterparty default. The Company’s maximum exposure to potential default of its derivative counterparties is limited to the asset position of its derivative portfolio. The asset position of the Company’s derivative portfolio was $20.5 at December 31, 2020.

The Company uses regression analysis to assess effectiveness of interest-rate contracts and net investment hedges at inception and uses quantitative analysis to assess subsequent effectiveness on a quarterly basis. For foreign-exchange contracts, the Company performs quarterly assessments to ensure that critical terms continue to match. All components of the derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. Hedge accounting is discontinued prospectively when the Company determines that a derivative financial instrument has ceased to be a highly effective hedge. Cash flows from derivative instruments are included in operating activities in the Consolidated Statements of Cash Flows.

Foreign Currency Translation: For most of the Company’s foreign subsidiaries, the local currency is the functional currency. All assets and liabilities are translated at year-end exchange rates and all income statement amounts are translated at the weighted average rates for the period. Translation adjustments are recorded in AOCI. The Company uses the U.S. dollar as the functional currency for all but one of its Mexican subsidiaries, which uses the local currency. For the U.S. functional currency entities in Mexico, inventories, cost of sales, property, plant and equipment and depreciation are remeasured at historical rates and resulting adjustments are included in net income.

Earnings per Share: Basic earnings per common share are computed by dividing earnings by the weighted average number of common shares outstanding, plus the effect of any participating securities. Diluted earnings per common share are computed assuming that all potentially dilutive securities are converted into common shares under the treasury stock method.

New Accounting Pronouncements

New Credit Loss Standard

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, including subsequently issued ASUs to clarify the implementation guidance in ASU 2016-13. The amendment introduces new guidance for credit losses on financial assets measured at amortized cost, including finance receivables, trade receivables and available-for-sale debt securities. Under this new model, expected credit losses are based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect collectability, replacing the previous incurred loss model. This ASU also updates the methodology for recording credit losses on available-for-sale debt securities from the write-down for other-than-temporary impairment to the allowance approach. The ASU is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. The Company adopted this ASU on January 1, 2020 on a modified retrospective basis as required, with a cumulative effect adjustment to Retained earnings as of the beginning of the period of adoption. The standard requires the application of the new credit impairment model for debt securities prospectively.

The cumulative effect of the changes made to the Company’s Consolidated Balance Sheet on January 1, 2020 for the adoption of ASU 2016-13 was as follows:

	BALANCE AT DECEMBER 31, 2019		CHANGE DUE TO NEW STANDARD			BALANCE AT JANUARY 1, 2020
Consolidated Balance Sheets
FINANCIAL SERVICES:
ASSETS
Finance and other receivables, net	$	12,086.0	$	(6.2	)	$	12,079.8
Other assets		715.0		.1			715.1
LIABILITIES
Deferred taxes and other liabilities		790.2		(1.5	)		788.7
STOCKHOLDERS' EQUITY
Retained earnings		10,398.5		(4.6	)		10,393.9

Other New Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate

Reform on Financial Reporting. This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period and will be in effect for a limited time through December 31, 2022. The Company adopted this ASU as of October 1, 2020. The Company will apply the accounting relief as relevant contract and hedge accounting relationship modifications are made during the reference rate reform transition period. The Company does not expect the standard to have a material impact on its consolidated financial statements.

In addition to adopting the ASUs disclosed above, the Company adopted the following standards on January 1, 2020, which had no material impact on the Company’s consolidated financial statements.

STANDARD	DESCRIPTION
2018-13	Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.
2018-15	Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.
2019-12	Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.

The FASB also issued the following standard, which is not expected to have a material impact on the Company’s consolidated financial statements.

STANDARD	DESCRIPTION	EFFECTIVE DATE
2018-14 *	Compensation – Retirement Benefits – Defined Benefit Plans – General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans.	January 1, 2021

* The Company will adopt on the effective date.

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Sales and Revenues

12 Months Ended

Dec. 31, 2020

Sales And Revenues [Abstract]

Sales and Revenues

B.SALES AND REVENUES

The following table disaggregates Truck, Parts and Other revenues by major sources:

Year Ended December 31,	2020		2019
Truck
Truck sales	$	12,466.9	$	19,225.2
Revenues from extended warranties, operating leases and other		697.9		764.3
		13,164.8		19,989.5
Parts
Parts sales		3,803.3		3,912.1
Revenues from dealer services and other		109.6		112.8
		3,912.9		4,024.9
Winch sales and other		76.6		105.3
Truck, Parts and Other sales and revenues	$	17,154.3	$	24,119.7

The following table summarizes Financial Services lease revenues by lease type:

Year Ended December 31,	2020		2019
Finance lease revenues	$	189.2	$	199.7
Operating lease revenues		802.3		798.2
Total lease revenues	$	991.5	$	997.9

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Investments in Marketable Debt Securities

12 Months Ended

Dec. 31, 2020

Available For Sale Securities [Abstract]

Investments in Marketable Debt Securities

C. INVESTMENTS IN MARKETABLE DEBT SECURITIES

Marketable debt securities consisted of the following at December 31:

	AMORTIZED		UNREALIZED		UNREALIZED		FAIR
2020	COST		GAINS		LOSSES		VALUE
U.S. tax-exempt securities	$	388.1	$	4.4	$	.1	$	392.4
U.S. corporate securities		229.6		3.3				232.9
U.S. government and agency securities		92.1		2.3				94.4
Non-U.S. corporate securities		406.0		5.5				411.5
Non-U.S. government securities		77.0		.5				77.5
Other debt securities		216.9		3.4				220.3
	$	1,409.7	$	19.4	$	.1	$	1,429.0

	AMORTIZED		UNREALIZED		UNREALIZED		FAIR
2019	COST		GAINS		LOSSES		VALUE
U.S. tax-exempt securities	$	318.1	$	2.2	$	.1	$	320.2
U.S. corporate securities		163.8		1.9				165.7
U.S. government and agency securities		128.4		.9				129.3
Non-U.S. corporate securities		347.7		2.3		.2		349.8
Non-U.S. government securities		72.3		.2		.1		72.4
Other debt securities		123.7		1.1		.1		124.7
	$	1,154.0	$	8.6	$	.5	$	1,162.1

The cost of marketable debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Amortization, accretion, interest and dividend income and realized gains and losses are included in investment income. The cost of securities sold is based on the specific identification method. Gross realized gains were $2.7, $1.3 and $1.1, and gross realized losses were $.3, $.4 and $.8 for the years ended December 31, 2020, 2019 and 2018, respectively.

Marketable debt securities with continuous unrealized losses and their related fair values were as follows:

At December 31,	2020				2019
	LESS THAN TWELVE MONTHS		TWELVE MONTHS OR GREATER		LESS THAN TWELVE MONTHS		TWELVE MONTHS OR GREATER
Fair value	$	81.1	$	1.3	$	177.0	$	31.4
Unrealized losses		.1				.4		.1

The unrealized losses on the investments above were due to higher yields on certain securities. The Company did not identify any indicators of a credit loss in its assessments. Accordingly, no allowance for credit losses was recorded at December 31, 2020 and December 31, 2019. The Company does not currently intend, and it is more likely than not, that it will not be required to sell the investment securities before recovery of the unrealized losses. The Company expects that the contractual principal and interest will be received on the investment securities. 

Contractual maturities on marketable debt securities at December 31, 2020 were as follows:

	AMORTIZED		FAIR
Maturities:	COST		VALUE
Within one year	$	313.9	$	315.7
One to five years		1,088.6		1,106.1
Six to ten years		5.2		5.2
More than ten years		2.0		2.0
	$	1,409.7	$	1,429.0

Marketable debt securities included nil and $49.7 of variable rate demand obligations (VRDOs) at December 31, 2020 and 2019, respectively. VRDOs are debt instruments with long-term scheduled maturities which have interest rates that reset periodically. Actual maturities of VRDOs may differ from contractual maturities because these securities may be sold when interest rates are reset.

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Inventories

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

Inventories

D. INVENTORIES

Inventories include the following:

At December 31,	2020			2019
Finished products	$	610.0		$	584.6
Work in process and raw materials		801.9			754.9
		1,411.9			1,339.5
Less LIFO reserve		(190.0	)		(186.3	)
	$	1,221.9		$	1,153.2

Inventories valued using the LIFO method comprised 42% and 46% of consolidated inventories before deducting the LIFO reserve at December 31, 2020 and 2019, respectively.

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Finance and Other Receivables

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Finance and Other Receivables

E. FINANCE AND OTHER RECEIVABLES

Finance and other receivables include the following:

At December 31,	2020			2019
Loans	$	5,839.1		$	5,241.7
Finance leases		3,944.7			3,906.7
Dealer wholesale financing		2,012.4			2,907.4
Operating lease receivables and other		151.5			142.6
	$	11,947.7		$	12,198.4
Less allowance for losses:
Loans and leases		(120.4	)		(104.4	)
Dealer wholesale financing		(3.4	)		(4.3	)
Operating lease receivables and other		(3.2	)		(3.7	)
	$	11,820.7		$	12,086.0

Included in Finance and other receivables, net on the Consolidated Balance Sheets is accrued interest receivable (net of allowance for credit losses) of $35.6 and $29.5 as of December 31, 2020 and December 31, 2019, respectively. The net activity of dealer direct loans and dealer wholesale financing on new trucks is shown in the operating section of the Consolidated Statements of Cash Flows since those receivables finance the sale of Company inventory.

Annual minimum payments due on loans are as follows:

Beginning January 1,	LOANS
2021	$	1,758.4
2022		1,480.1
2023		1,223.6
2024		881.8
2025		380.0
Thereafter		115.2
	$	5,839.1

Annual minimum payments due on finance lease receivables and a reconciliation of the undiscounted cash flows to the net investment in finance leases are as follows:

	FINANCE
Beginning January 1,	LEASES
2021	$	1,310.4
2022		1,030.5
2023		775.0
2024		458.8
2025		223.4
Thereafter		82.5
		3,880.6
Unguaranteed residual values		458.8
Unearned interest on finance leases		(394.7	)
Net investment in finance leases	$	3,944.7

Experience indicates substantially all of dealer wholesale financing will be repaid within one year. In addition, repayment experience indicates that some loans, leases and other finance receivables will be paid prior to contract maturity, while others may be extended or modified.

For the following credit quality disclosures, finance receivables are classified into two portfolio segments, wholesale and retail. The retail portfolio is further segmented into dealer retail and customer retail. The dealer wholesale segment consists of truck inventory financing to PACCAR dealers. The dealer retail segment consists of loans and leases to participating dealers and franchises that use the proceeds to fund customers’ acquisition of commercial vehicles and related equipment. The customer retail segment consists of loans and leases directly to customers for the acquisition of commercial vehicles and related equipment. Customer retail receivables are further segregated between fleet and owner/operator classes. The fleet class consists of customer retail accounts operating more than five trucks. All other customer retail accounts are considered owner/operator. These two classes have similar measurement attributes, risk characteristics and common methods to monitor and assess credit risk.

Allowance for Credit Losses: The allowance for credit losses is summarized as follows:

	2020
	DEALER						CUSTOMER
	WHOLESALE			RETAIL			RETAIL			OTHER*			TOTAL**
Balance at January 1	$	4.3		$	9.2		$	101.4		$	3.7		$	118.6
Provision for losses		(1.0	)		(.8	)		30.1			.5			28.8
Charge-offs								(26.6	)		(1.4	)		(28.0	)
Recoveries								5.3			.4			5.7
Currency translation and other		.1						1.8						1.9
Balance at December 31	$	3.4			8.4		$	112.0		$	3.2		$	127.0

	2019
	DEALER						CUSTOMER
	WHOLESALE			RETAIL			RETAIL			OTHER*			TOTAL
Balance at January 1	$	6.8		$	10.0		$	93.8		$	3.2		$	113.8
Provision for losses		(1.6	)		(1.0	)		14.2			3.8			15.4
Charge-offs		(.6	)					(24.2	)		(3.6	)		(28.4	)
Recoveries								10.7			.3			11.0
Currency translation and other		(.3	)		.2			.7						.6
Balance at December 31	$	4.3		$	9.2		$	95.2		$	3.7		$	112.4

* Operating lease and other trade receivables.

**    The beginning balance has been adjusted for the adoption of ASU 2016-13.

	2018
	DEALER						CUSTOMER
	WHOLESALE			RETAIL			RETAIL			OTHER*			TOTAL
Balance at January 1	$	6.0		$	9.4		$	92.5		$	9.3		$	117.2
Provision for losses		1.0			.7			13.6			1.2			16.5
Charge-offs								(20.0	)		(7.5	)		(27.5	)
Recoveries								9.9			.4			10.3
Currency translation and other		(.2	)		(.1	)		(2.2	)		(.2	)		(2.7	)
Balance at December 31	$	6.8		$	10.0		$	93.8		$	3.2		$	113.8

* Operating lease and other trade receivables.

Information regarding finance receivables evaluated and determined individually and collectively is as follows:

	DEALER				CUSTOMER
At December 31, 2020	WHOLESALE		RETAIL		RETAIL		TOTAL
Amortized cost basis for impaired finance    receivables evaluated individually			$	1.2	$	86.7	$	87.9
Allowance for impaired finance receivables    determined individually						5.6		5.6
Amortized cost basis for finance receivables    evaluated collectively	$	2,012.4		1,701.9		7,994.0		11,708.3
Allowance for finance receivables determined    collectively		3.4		8.4		106.4		118.2

	DEALER				CUSTOMER
At December 31, 2019	WHOLESALE		RETAIL		RETAIL		TOTAL
Amortized cost basis for impaired finance    receivables evaluated individually			$	2.3	$	47.6	$	49.9
Allowance for impaired finance receivables    determined individually						6.5		6.5
Amortized cost basis for finance receivables    evaluated collectively	$	2,907.4		1,643.3		7,455.2		12,005.9
Allowance for finance receivables determined    collectively		4.3		9.2		88.7		102.2

The amortized cost basis for finance receivables that are on non-accrual status is as follows:

At December 31,	2020			2019
Dealer:
Retail	$	1.2	$	2.3
Customer retail:
Fleet		78.6		40.2
Owner/operator		8.1		7.2
	$	87.9	$	49.7

Impaired Loans: Impaired loans are summarized below. The impaired loans with specific reserve represent the unpaid principal balance. The amortized cost basis of impaired loans as of December 31, 2020 and 2019 was not significantly different than the unpaid principal balance.

	DEALER			CUSTOMER RETAIL
At December 31, 2020	WHOLESALE	RETAIL		FLEET			OWNER/ OPERATOR			TOTAL
Impaired loans with a specific reserve				$	22.6		$	2.1		$	24.7
Associated allowance					(1.6	)		(.3	)		(1.9	)
					21.0			1.8			22.8
Impaired loans with no specific reserve		$	1.2								1.2
Net carrying amount of impaired loans		$	1.2	$	21.0		$	1.8		$	24.0
Average amortized cost basis		$	1.6	$	26.5		$	2.8		$	30.9

	DEALER				CUSTOMER RETAIL
At December 31, 2019	WHOLESALE		RETAIL		FLEET			OWNER/ OPERATOR			TOTAL
Impaired loans with a specific reserve					$	10.9		$	3.1		$	14.0
Associated allowance						(2.1	)		(.6	)		(2.7	)
						8.8			2.5			11.3
Impaired loans with no specific reserve			$	2.3		6.7			.4			9.4
Net carrying amount of impaired loans			$	2.3	$	15.5		$	2.9		$	20.7
Average amortized cost basis	$	4.9	$	2.4	$	16.6		$	3.4		$	27.3

During the period the loans above were considered impaired, interest income recognized on a cash basis was as follows:

Year Ended December 31,	2020		2019		2018
Dealer:
Retail	$	.2	$	.2
Customer retail:
Fleet		1.5		1.3	$	2.0
Owner/operator		.2		.2		.2
	$	1.9	$	1.7	$	2.2

Credit Quality: The Company's customers are principally concentrated in the transportation industry in North America, Europe and Australia. The Company’s portfolio assets are diversified over a large number of customers and dealers with no single customer or dealer balances representing over 5% of the total portfolio assets. The Company retains as collateral a security interest in the related equipment.

At the inception of each contract, the Company considers the credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit-rating agency ratings, loan-to-value ratios and other internal metrics. On an ongoing basis, the Company monitors credit quality based on past due status and collection experience as there is a meaningful correlation between the past due status of customers and the risk of loss.

The Company has three credit quality indicators: performing, watch and at-risk. Performing accounts pay in accordance with the contractual terms and are not considered high-risk. Watch accounts include accounts 31 to 90 days past due and large accounts that are performing but are considered to be high‑risk. Watch accounts are not impaired. At-risk accounts are accounts that are impaired, including TDRs, accounts over 90 days past due and other accounts on non-accrual status.

The table below summarizes the amortized cost basis of the Company’s finance receivables within each credit quality indicator by year of origination and portfolio class.  

	Revolving
At December 31, 2020	Loans		2020		2019		2018		2017		2016		Prior		Total
Dealer:
Wholesale:
Performing	$	2,004.5													$	2,004.5
Watch		7.9														7.9
	$	2,012.4													$	2,012.4
Retail:
Performing	$	20.7	$	504.2	$	474.9	$	268.0	$	180.1	$	100.4	$	132.0	$	1,680.3
Watch				5.2		10.5		4.5		1.4						21.6
At-risk												1.2				1.2
	$	20.7	$	509.4	$	485.4	$	272.5	$	181.5	$	101.6	$	132.0	$	1,703.1
Total Dealer	$	2,033.1	$	509.4	$	485.4	$	272.5	$	181.5	$	101.6	$	132.0	$	3,715.5
Customer Retail:
Fleet:
Performing			$	2,664.9	$	1,921.6	$	1,203.7	$	533.7	$	234.2	$	65.2	$	6,623.3
Watch				13.5		17.8		11.8		5.9		1.5		1.2		51.7
At-risk				8.0		37.0		18.2		12.2		2.4		.8		78.6
			$	2,686.4	$	1,976.4	$	1,233.7	$	551.8	$	238.1	$	67.2	$	6,753.6
Owner/Operator:
Performing			$	554.6	$	376.4	$	225.1	$	105.2	$	41.2	$	9.1	$	1,311.6
Watch				1.6		2.7		2.0		.7		.2		.2		7.4
At-risk				.9		2.1		3.2		1.2		.4		.3		8.1
			$	557.1	$	381.2	$	230.3	$	107.1	$	41.8	$	9.6	$	1,327.1
Total Customer Retail			$	3,243.5	$	2,357.6	$	1,464.0	$	658.9	$	279.9	$	76.8	$	8,080.7
Total	$	2,033.1	$	3,752.9	$	2,843.0	$	1,736.5	$	840.4	$	381.5	$	208.8	$	11,796.2

The tables below summarize the Company’s finance receivables by aging category. In determining past due status, the Company considers the entire contractual account balance past due when any installment is over 30 days past due. Substantially all customer accounts that were greater than 30 days past due prior to credit modification became current upon modification for aging purposes.

	DEALER				CUSTOMER RETAIL
At December 31, 2020	WHOLESALE		RETAIL		FLEET		OWNER/ OPERATOR		TOTAL
Current and up to 30 days past due	$	2,012.4	$	1,703.1	$	6,718.3	$	1,314.7	$	11,748.5
31 – 60 days past due						12.3		6.5		18.8
Greater than 60 days past due						23.0		5.9		28.9
	$	2,012.4	$	1,703.1	$	6,753.6	$	1,327.1	$	11,796.2

	DEALER				CUSTOMER RETAIL
At December 31, 2019	WHOLESALE		RETAIL		FLEET		OWNER/ OPERATOR		TOTAL
Current and up to 30 days past due	$	2,907.4	$	1,645.6	$	6,297.1	$	1,140.7	$	11,990.8
31 – 60 days past due						23.0		8.7		31.7
Greater than 60 days past due						27.6		5.7		33.3
	$	2,907.4	$	1,645.6	$	6,347.7	$	1,155.1	$	12,055.8

Troubled Debt Restructurings: The balance of TDRs was $63.1 and $14.1 at December 31, 2020 and 2019, respectively. At modification date, the pre-modification and post-modification amortized cost basis balances for finance receivables modified during the period by portfolio class were as follows:

	2020				2019
	AMORTIZED COST BASIS				AMORTIZED COST BASIS
	PRE-MODIFICATION		POST-MODIFICATION		PRE-MODIFICATION		POST-MODIFICATION
Fleet	$	72.5	$	72.5	$	2.2	$	2.2
Owner/operator		2.2		2.2		.3		.3
	$	74.7	$	74.7	$	2.5	$	2.5

The effect on the allowance for credit losses from such modifications was not significant at December 31, 2020 and 2019.

TDRs modified during the previous twelve months that subsequently defaulted (i.e., became more than 30 days past due) in the years ended December 31, 2020 and 2019 were $4.1 and nil, respectively.

There were $2.0 and nil of finance receivables modified as TDRs during the previous twelve months that subsequently defaulted and were charged off for the years ended December 31, 2020 and 2019, respectively.

Repossessions: When the Company determines a customer is not likely to meet its contractual commitments, the Company repossesses the vehicles which serve as collateral for the loans, finance leases and equipment under operating leases. The Company records the vehicles as used truck inventory included in Financial Services Other assets on the Consolidated Balance Sheets. The balance of repossessed inventory at December 31, 2020 and 2019 was $19.3 and $25.6, respectively. Proceeds from the sales of repossessed assets were $85.6, $62.4 and $75.8 for the years ended December 31, 2020, 2019 and 2018, respectively. These amounts are included in Proceeds from asset disposals in the Consolidated Statements of Cash Flows. Write-downs of repossessed equipment on operating leases are recorded as impairments and included in Financial Services Depreciation and other expenses on the Consolidated Statements of Income.

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Equipment On Operating Leases

12 Months Ended

Dec. 31, 2020

Lessor Disclosure [Abstract]

Equipment On Operating Leases

F. EQUIPMENT ON OPERATING LEASES

A summary of equipment on operating leases for Truck, Parts and Other and for the Financial Services segment is presented below.

	TRUCK, PARTS AND OTHER						FINANCIAL SERVICES
At December 31,		2020			2019			2020			2019
Equipment on operating leases	$	576.8		$	706.3		$	4,493.9		$	4,350.0
Less allowance for depreciation		(154.9	)		(160.8	)		(1,331.1	)		(1,247.4	)
	$	421.9		$	545.5		$	3,162.8		$	3,102.6

Annual minimum lease payments due on Financial Services operating leases beginning January 1, 2021 are $668.2, $451.8, $252.8, $104.3, $35.0 and $5.1 thereafter.

When the equipment is sold subject to an RVG, the full sales price is received from the customer. A liability is established for the residual value obligation with the remainder of the proceeds recorded as deferred lease revenue. These amounts are summarized below:

	TRUCK, PARTS AND OTHER
At December 31,		2020		2019
Residual value guarantees	$	358.4	$	439.6
Deferred lease revenues		99.0		147.7
	$	457.4	$	587.3

The deferred lease revenue is amortized on a straight-line basis over the RVG contract period. At December 31, 2020, the annual amortization of deferred revenues beginning January 1, 2021 is $53.6, $24.6, $12.1, $8.5, $.2 and nil thereafter. Annual maturities of the RVGs beginning January 1, 2021 are $179.8, $82.4, $54.2, $15.9, $15.2 and $10.9 thereafter.

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Property, Plant And Equipment

12 Months Ended

Dec. 31, 2020

Property Plant And Equipment [Abstract]

Property, Plant And Equipment

G. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment include the following:

At December 31,	USEFUL LIVES	2020			2019
Land		$	286.4		$	271.8
Buildings and improvements	10 - 40 years		1,474.7			1,382.2
Machinery, equipment and production tooling	3 - 12 years		4,234.4			3,998.2
Construction in progress			1,081.8			741.7
			7,077.3			6,393.9
Less allowance for depreciation			(3,806.9	)		(3,510.1	)
		$	3,270.4		$	2,883.8

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Accounts Payable, Accrued Expenses and Other

12 Months Ended

Dec. 31, 2020

Payables And Accruals [Abstract]

Accounts Payable, Accrued Expenses and Other

H. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER

Accounts payable, accrued expenses and other include the following:

At December 31,	2020		2019
Truck, Parts and Other:
Accounts payable	$	1,176.2	$	1,115.7
Product support liabilities		514.6		508.1
Accrued expenses		446.5		467.4
Right-of-return liabilities		337.3		226.0
Accrued capital expenditures		288.8		270.3
Salaries and wages		260.8		271.8
Other		389.7		334.9
	$	3,413.9	$	3,194.2

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Product Support Liabilities

12 Months Ended

Dec. 31, 2020

Product Warranties Disclosures [Abstract]

Product Support Liabilities

I. PRODUCT SUPPORT LIABILITIES

Changes in product support liabilities are summarized as follows:

WARRANTY RESERVES	2020			2019			2018
Balance at January 1	$	440.0		$	380.2		$	298.8
Cost accruals		295.0			386.3			331.9
Payments		(437.2	)		(343.7	)		(271.8	)
Change in estimates for pre-existing warranties		84.1			19.8			25.6
Currency translation and other		7.8			(2.6	)		(4.3	)
Balance at December 31	$	389.7		$	440.0		$	380.2

DEFERRED REVENUES ON EXTENDED WARRANTIES AND R&M CONTRACTS	2020			2019			2018
Balance at January 1	$	801.4		$	699.9		$	653.9
Deferred revenues		409.9			499.1			448.2
Revenues recognized		(438.9	)		(396.4	)		(385.0	)
Currency translation		23.4			(1.2	)		(17.2	)
Balance at December 31	$	795.8		$	801.4		$	699.9

The Company expects to recognize approximately $272.3 of the remaining deferred revenues on extended warranties and R&M contracts in 2021, $251.8 in 2022, $162.3 in 2023, $74.6 in 2024, $25.4 in 2025 and $9.4 thereafter.

Product support liabilities are included in the accompanying Consolidated Balance Sheets as follows:

	WARRANTY RESERVES				DEFERRED REVENUES
At December 31,		2020		2019		2020		2019
Truck, Parts and Other:
Accounts payable, accrued expenses and other	$	245.6	$	270.6	$	269.0	$	237.5
Other liabilities		144.1		169.4		513.1		547.6
Financial Services:
Accounts payable, accrued expenses and other						5.7		6.8
Deferred taxes and other liabilities						8.0		9.5
	$	389.7	$	440.0	$	795.8	$	801.4

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Borrowings And Credit Arrangements

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Borrowings And Credit Arrangements

J. BORROWINGS AND CREDIT ARRANGEMENTS

Financial Services borrowings include the following:

At December 31,	2020					2019
	EFFECTIVE					EFFECTIVE
	RATE			BORROWINGS		RATE			BORROWINGS
Commercial paper		.4	%	$	3,113.5		1.5	%	$	3,797.2
Bank loans		5.9	%		230.9		7.1	%		313.0
					3,344.4					4,110.2
Term notes		1.7	%		7,508.9		1.9	%		7,112.5
		1.4	%	$	10,853.3		1.9	%	$	11,222.7

Commercial paper and term notes borrowings were $10,622.4 and $10,909.7 at December 31, 2020 and 2019, respectively. Unamortized debt issuance costs, unamortized discounts and the net effect of fair value hedges were $(12.7) and $(20.5) at December 31, 2020 and 2019, respectively. The effective rate is the weighted average rate as of December 31, 2020 and 2019 and includes the effects of interest-rate contracts.

The annual maturities of the Financial Services borrowings are as follows:

	COMMERCIAL		BANK		TERM
Beginning January 1,	PAPER		LOANS		NOTES		TOTAL
2021	$	3,114.2	$	40.1	$	2,241.7	$	5,396.0
2022				121.6		2,231.9		2,353.5
2023				19.0		2,231.9		2,250.9
2024				25.1		415.4		440.5
2025				25.1		400.0		425.1
	$	3,114.2	$	230.9	$	7,520.9	$	10,866.0

Interest paid on borrowings was $164.5, $203.8 and $166.5 in 2020, 2019 and 2018, respectively.

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. The medium-term notes are issued by PACCAR Financial Corp. (PFC), PACCAR Financial Europe, PACCAR Financial Mexico and PACCAR Financial Pty. Ltd. (PFPL).

In November 2018, the Company’s U.S. finance subsidiary, PFC, filed a shelf registration under the Securities Act of 1933. The total amount of medium-term notes outstanding for PFC as of December 31, 2020 was $6,000.0. In February 2021, PFC issued $400.0 of medium-term notes under this registration. The registration expires in November 2021 and does not limit the principal amount of debt securities that may be issued during that period.

As of December 31, 2020, the Company’s European finance subsidiary, PACCAR Financial Europe, had €1,600.0 available for issuance under a €2,500.0 medium-term note program listed on the Euro MTF Market of the Luxembourg Stock Exchange. This program replaced an expiring program in the second quarter of 2020 and is renewable annually through the filing of a new listing.

In April 2016, PACCAR Financial Mexico registered a 10,000.0 pesos medium-term note and commercial paper program with the Comision Nacional Bancaria y de Valores. The registration expires in April 2021 and limits the amount of commercial paper (up to one year) to 5,000.0 pesos. At December 31, 2020, 6,842.7 pesos remained available for issuance.  

In August 2018, the Company’s Australian subsidiary, PACCAR Financial Pty. Ltd. (PFPL), registered 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 as of December 31, 2020 was 450.0 Australian dollars.

The Company has line of credit arrangements of $3,523.1, of which $3,292.2 were unused at December 31, 2020. Included in these arrangements are $3,000.0 of committed bank facilities, of which $1,000.0 expires in June 2021, $1,000.0 expires in June 2023 and $1,000.0 expires in June 2024. The Company intends to replace these credit facilities on or before expiration with facilities of similar amounts and duration. 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, 2020.

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Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

K. LEASES

The Company leases certain facilities and equipment. The Company determines whether an arrangement is or contains a lease at inception. The Company accounts for lease and non-lease components separately. The consideration in the contract is allocated to each separate lease and non-lease component of the contract generally based on the relative stand-alone price of the components. The lease component is accounted for in accordance with the lease standard and the non-lease component is accounted for in accordance with other standards. The Company uses its incremental borrowing rate in determining the present value of lease payments unless the rate implicit in the lease is available. The lease term may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. Leases that have a term of 12 months or less at the commencement date (“short-term leases”) are not included in the right-of-use assets and the lease liabilities. Lease expense for the short-term leases are recognized on a straight-line basis over the lease term.

The components of lease expense were as follows:

Year Ended December 31,	2020		2019
Finance lease cost
Amortization of right-of-use assets	$	.9	$	.9
Interest on lease liabilities		.1		.1
Operating lease cost		16.6		16.9
Short-term lease cost		.8		.7
Variable lease cost		1.7		1.8
Total lease cost	$	20.1	$	20.4

For the years ended December 31, 2020, 2019 and 2018, total rental expenses for all leases amounted to $20.1, $20.4 and $35.7, respectively.

Balance sheet information related to leases was as follows:

At December 31,	2020				2019
	OPERATING LEASES		FINANCE LEASES		OPERATING LEASES		FINANCE LEASES
TRUCK, PARTS AND OTHER:
Other noncurrent assets	$	30.9	$	1.0	$	31.7	$	1.1
FINANCIAL SERVICES:
Other assets		9.0				5.2
Total right-of-use assets	$	39.9	$	1.0	$	36.9	$	1.1
TRUCK, PARTS AND OTHER:
Accounts payable, accrued expenses and other	$	11.4	$	.5	$	13.0	$	.7
Other liabilities		20.3		.5		19.5		.5
FINANCIAL SERVICES:
Accounts payable, accrued expenses and other		2.0				1.5
Deferred taxes and other liabilities		6.6				3.7
Total lease liabilities	$	40.3	$	1.0	$	37.7	$	1.2

The weighted-average remaining lease term and discount rate are as follows at December 31:

	2020						2019
	OPERATING LEASES			FINANCE LEASES			OPERATING LEASES			FINANCE LEASES
Weighted-average remaining lease term	5.7 years			2.3 years			5.1 years			2.2 years
Weighted-average discount rate		1.4	%		2.5	%		1.9	%		4.0	%

Maturities of lease liabilities are as follows:

Beginning January 1,	OPERATING LEASES			FINANCE LEASES
2021	$	13.7		$	.6
2022		10.6			.2
2023		5.8			.2
2024		3.2			.1
2025		2.4
Thereafter		6.0
Total lease payments		41.7			1.1
Less: interest		(1.4	)		(.1	)
Total lease liabilities	$	40.3		$	1.0

Cash flow information related to leases was as follows:

Year Ended December 31,	2020		2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	17.2	$	17.0
Operating cash flows from finance leases		.1		.2
Financing cash flows from finance leases		.9		1.0
Right-of-use assets obtained in exchange for lease liabilities
Operating leases		19.9		8.9
Finance leases		.5		.7

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

L. COMMITMENTS AND CONTINGENCIES

At December 31, 2020, PACCAR had standby letters of credit and surety bonds totaling $45.5, from third-party financial institutions, in the normal course of business, which guarantee various insurance, financing and other activities. At December 31, 2020, PACCAR’s financial services companies, in the normal course of business, had outstanding commitments to fund new loan and lease transactions amounting to $823.4. The commitments generally expire in 90 days. The Company had other commitments, primarily to purchase production inventory, equipment and energy amounting to $127.5, $76.1, $3.4, $.3, $.2 and nil for 2021, 2022, 2023, 2024, 2025 and beyond, respectively.

The Company is involved in various stages of investigations and cleanup actions in different countries related to environmental matters. In certain of these matters, the Company has been designated as a “potentially responsible party” by domestic and foreign environmental agencies. 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 for the years ended December 31, 2020, 2019 and 2018 were $1.9, $1.3 and $1.2, respectively.

While the timing and amount of the ultimate costs associated with future environmental cleanup cannot be determined, management expects that these matters will not have a significant effect on the Company’s consolidated financial position.

On July 19, 2016, the European Commission (EC) concluded its investigation of all major European truck manufacturers and reached a settlement with DAF. Following the settlement, claims and lawsuits have been filed against the Company, DAF and certain DAF subsidiaries and other truck manufacturers in various European jurisdictions. These claims and lawsuits include a number of collective proceedings, including proposed class actions in the United Kingdom, alleging EC-related claims and seeking unspecified damages.  Others may bring EC-related claims and lawsuits against the Company or its subsidiaries. While the Company believes it has meritorious defenses, such claims and lawsuits will likely take a significant period of time to resolve. The Company cannot reasonably estimate a range of loss, if any, that may result given the early stage of these claims and lawsuits. An adverse outcome of such proceedings could have a material impact on the Company’s results of operations.    

PACCAR is also a defendant in various other legal proceedings and, in addition, there are various other contingent liabilities arising in the normal course of business. After consultation with legal counsel, management does not anticipate that disposition of these various other proceedings and contingent liabilities will have a material effect on the consolidated financial statements.

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Employee Benefits

12 Months Ended

Dec. 31, 2020

Compensation And Retirement Disclosure [Abstract]

Employee Benefits

M. EMPLOYEE BENEFITS

Severance Costs: The Company incurred severance expense in 2020, 2019 and 2018 of $6.1, $5.8 and $.7, respectively.

Defined Benefit Pension Plans: The Company has several defined benefit pension plans, which cover a majority of its employees. The Company evaluates its actuarial assumptions on an annual basis and considers changes based upon market conditions and other factors.

The expected return on plan assets is determined by using a market-related value of assets, which is calculated based on an average of the previous five years of asset gains and losses.

Generally, accumulated unrecognized actuarial gains and losses are amortized using the 10% corridor approach. The corridor is defined as the greater of either 10% of the projected benefit obligation or the market-related value of plan assets. The amortization amount is the excess beyond the corridor divided by the average remaining estimated service life of participants on a straight-line basis.

The Company funds its pensions in accordance with applicable employee benefit and tax laws. The Company contributed $184.9 to its pension plans in 2020 and $35.7 in 2019. The Company expects to contribute in the range of $100 to $150 to its pension plans in 2021, of which $19.7 is estimated to satisfy minimum funding requirements. Annual benefits expected to be paid beginning January 1, 2021 are $125.7, $109.8, $114.8, $121.2, $127.0 and a total of $726.4 for the five years thereafter.

Plan assets are invested in global equity and debt securities through professional investment managers with the objective to achieve targeted risk adjusted returns and maintain liquidity sufficient to fund current benefit payments. Typically, each defined benefit plan has an investment policy that includes a target for asset mix, including maximum and minimum ranges for allocation percentages by investment category. The actual allocation of assets may vary at times based upon rebalancing policies and other factors. The Company periodically assesses the target asset mix by evaluating external sources of information regarding the long-term historical return, volatilities and expected future returns for each investment category. In addition, the long-term rates of return assumptions for pension accounting are reviewed annually to ensure they are appropriate. Target asset mix and forecast long-term returns by asset

category are considered in determining the assumed long-term rates of return, although historical returns realized are given some consideration.

The fair value of mutual funds, common stocks and U.S. treasuries is determined using the market approach and is based on the quoted prices in active markets. These securities are categorized as Level 1. The fair value of debt securities is determined using the market approach and is based on the quoted market prices of the securities or other observable inputs. These securities are categorized as Level 2.

The fair value of commingled and pooled trust funds is determined using the market approach and is based on the unadjusted net asset value (NAV) per unit as determined by the sponsor of the fund based on the fair values of underlying investments. These assets are collective investment trusts and pooled funds, and substantially all of these investments have no redemption restrictions or unfunded commitments. Securities measured at NAV per unit as a practical expedient are not classified in the fair value hierarchy.

The following information details the allocation of plan assets by investment type. See Note Q for definitions of fair value levels.

		FAIR VALUE HIERARCHY
At December 31, 2020	TARGET	LEVEL 1		LEVEL 2		TOTAL		MEASURED AT NAV		TOTAL
Equities:
U.S. equities								$	1,047.0	$	1,047.0
Global equities									1,140.6		1,140.6
Total equities	50 - 70%								2,187.6		2,187.6
Fixed income:
U.S. fixed income		$	83.9	$	296.0	$	379.9	$	719.9	$	1,099.8
Non-U.S. fixed income					30.4		30.4		372.8		403.2
Total fixed income	30 - 50%		83.9		326.4		410.3		1,092.7		1,503.0
Cash and other			2.6		99.8		102.4		.4		102.8
Total plan assets		$	86.5	$	426.2	$	512.7	$	3,280.7	$	3,793.4

		FAIR VALUE HIERARCHY
At December 31, 2019	TARGET	LEVEL 1		LEVEL 2		TOTAL		MEASURED AT NAV		TOTAL
Equities:
U.S. equities								$	860.1	$	860.1
Global equities									973.1		973.1
Total equities	50 - 70%								1,833.2		1,833.2
Fixed income:
U.S. fixed income		$	90.6	$	260.3	$	350.9	$	611.7	$	962.6
Non-U.S. fixed income					28.1		28.1		322.0		350.1
Total fixed income	30 - 50%		90.6		288.4		379.0		933.7		1,312.7
Cash and other			10.6		68.2		78.8		1.7		80.5
Total plan assets		$	101.2	$	356.6	$	457.8	$	2,768.6	$	3,226.4

In 2019, U.S. fixed income Level 1 included $123.4 of investments valued at NAV. The table above reflects these investments as Measured at NAV.

The following weighted average assumptions relate to all pension plans of the Company:

At December 31,	2020			2019
Discount rate		2.2	%		2.9	%
Rate of increase in future compensation levels		3.7	%		3.8	%
Assumed long-term rate of return on plan assets		6.2	%		6.3	%

The components of the change in projected benefit obligation and change in plan assets are as follows:

At December 31,	2020			2019
Change in projected benefit obligation:
Benefit obligation at January 1	$	3,234.4		$	2,655.4
Service cost		130.4			102.0
Interest cost		83.0			95.6
Benefits paid		(120.2	)		(127.0	)
Actuarial loss		379.5			478.0
Currency translation and other		54.4			30.0
Participant contributions		.4			.4
Projected benefit obligation at December 31	$	3,761.9		$	3,234.4
Change in plan assets:
Fair value of plan assets at January 1	$	3,226.4		$	2,699.2
Employer contributions		184.9			35.7
Actual return on plan assets		453.4			588.1
Benefits paid		(120.2	)		(127.0	)
Currency translation and other		48.5			30.0
Participant contributions		.4			.4
Fair value of plan assets at December 31	$	3,793.4		$	3,226.4
Funded status at December 31	$	31.5		$	(8.0	)

At December 31,	2020		2019
Amounts recorded on Balance Sheet:
Other noncurrent assets	$	222.1	$	146.5
Accounts payable, accrued expenses and other		25.5		39.9
Other liabilities		165.1		114.6
Accumulated other comprehensive loss:
Actuarial loss		571.7		512.5
Prior service cost		6.3		5.1
Net initial transition amount				.1

Of the December 31, 2020 amounts in accumulated other comprehensive loss, $56.7 of unrecognized actuarial loss and $.8 of unrecognized prior service cost are expected to be amortized into net pension expense in 2021.

The accumulated benefit obligation for all pension plans of the Company was $3,321.5 and $2,806.3 at December 31, 2020 and 2019, respectively.

Information for all plans with an accumulated benefit obligation in excess of plan assets is as follows:

At December 31,	2020		2019
Projected benefit obligation	$	167.9	$	170.6
Accumulated benefit obligation		148.7		150.1
Fair value of plan assets		13.5		23.4

The components of pension expense are as follows:

Year Ended December 31,		2020			2019			2018
Service cost	$	130.4		$	102.0		$	108.3
Interest on projected benefit obligation		83.0			95.6			85.8
Expected return on assets		(190.6	)		(176.6	)		(177.2	)
Amortization of prior service costs		1.5			1.4			1.4
Recognized actuarial loss		44.2			20.5			35.3
Settlement loss		11.6
Net pension expense	$	80.1		$	42.9		$	53.6

The components of net pension expense other than service cost are included in Interest and other (income), net on the Consolidated Statements of Income.

Multi-employer Plans: The Company participates in multi-employer plans in the U.S. and Europe. These are typically under collective bargaining agreements and cover its union-represented employees. The Company’s participation in the following multi-employer plans for the years ended December 31 are as follows:

		PENSION PLAN	COMPANY CONTRIBUTIONS
PENSION PLAN	EIN	NUMBER		2020		2019		2018
Metal and Electrical Engineering Industry Pension Fund		135668	$	33.9	$	27.8	$	27.9
Western Metal Industry Pension Plan	91-6033499	001		3.0		3.8		2.7
Other plans				.9		1.2		1.2
			$	37.8	$	32.8	$	31.8

The Company contributions shown in the table above approximate the multi-employer pension expense for each of the years ended December 31, 2020, 2019 and 2018, respectively.

Metal and Electrical Engineering Industry Pension Fund is a multi-employer union plan incorporating all DAF employees in the Netherlands and is covered by a collective bargaining agreement that expired on November 30, 2020 and is under negotiation. The Company’s contributions were less than 5% of the total contributions to the plan for the last two reporting periods ending December 2020. The plan is required by law (the Netherlands Pension Act) to have a coverage ratio in excess of 104.3%. Because the coverage ratio of the plan was 97.2% at December 31, 2020, a funding improvement plan effective through 2029 is in place. The funding improvement plan includes a possible reduction in pension benefits and delays in future benefit increases.

The Western Metal Industry Pension Plan is located in the U.S. and is covered by a collective bargaining agreement that will expire on November 2, 2025. In accordance with the U.S. Pension Protection Act of 2006, the plan continued to be certified as critical (red) status as of December 31, 2020, and a funding improvement plan has been implemented requiring additional contributions through 2022 as long as the plan remains in critical status. Contributions by the Company were 15% and 20% of the total contributions to the plan for the years ended December 31, 2020 and 2019, respectively.

Other plans are principally located in the U.S. and the Company’s contributions to these plans for the years ended December 31, 2020 and 2019 were less than 5% of each plan’s total contributions. As of December 31, 2020, one of the other plans was under a funding improvement plan.

There were no significant changes for the multi-employer plans in the periods presented that affected comparability between periods.

Defined Contribution Plans: The Company maintains several defined contribution benefit plans whereby it contributes designated amounts on behalf of participant employees. The largest plan is for U.S. salaried employees where the Company matches a percentage of employee contributions up to an annual limit. The match was 5% of eligible pay in 2020, 2019 and 2018. Other plans are located in Australia, Brasil, Canada, the Netherlands, Belgium and Germany. Expenses for these plans were $42.5, $48.3 and $45.3 in 2020, 2019 and 2018, respectively.

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Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

N. INCOME TAXES

The Company’s tax rate is based on income and statutory tax rates in the various jurisdictions in which the Company operates. Tax law requires certain items to be included in the Company’s tax returns at different times than the items reflected in the Company’s financial statements. As a result, the Company’s annual tax rate reflected in its financial statements is different than that reported in its tax returns. Some of these differences are permanent, such as expenses that are not deductible in the Company’s tax return, and some differences reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. The Company establishes valuation allowances for its deferred tax assets if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The components of the Company’s income before income taxes include the following:

Year Ended December 31,	2020		2019		2018
Domestic	$	1,122.9	$	2,201.1	$	1,775.2
Foreign		535.0		898.1		1,035.0
	$	1,657.9	$	3,099.2	$	2,810.2

The components of the Company’s provision for income taxes include the following:

Year Ended December 31,	2020			2019			2018
Current provision:
Federal	$	182.5		$	352.3		$	267.1
State		44.9			96.8			67.5
Foreign		132.6			191.4			263.0
		360.0			640.5			597.6
Deferred (benefit) provision:
Federal		(11.2	)		40.7			22.6
State		1.7			(4.3	)		1.3
Foreign		9.0			34.4			(6.4	)
		(.5	)		70.8			17.5
	$	359.5		$	711.3		$	615.1

Tax benefits recognized for net operating loss carryforwards were $17.8, $12.4 and $5.0 for the years ended 2020, 2019 and 2018, respectively.

A reconciliation of the statutory U.S. federal tax rate to the effective income tax rate is as follows:

	2020			2019			2018
Statutory rate		21.0	%		21.0	%		21.0	%
Effect of:
Transition tax								(.2	)
State		2.3			2.3			2.2
Research and development tax credit		(1.4	)		(.9	)		(.8	)
Tax on foreign earnings		.8			.9			1.0
Other, net		(1.0	)		(.3	)		(1.3	)
		21.7	%		23.0	%		21.9	%

Based on the Company’s current operations, the Company does not expect that the repatriation of future foreign earnings will be subject to significant income tax as a result of the U.S. modified territorial system.

At December 31, 2020, the Company had net operating loss carryforwards of $492.2, of which $416.2 related to foreign subsidiaries and $76.0 related to states in the U.S. The related deferred tax asset was $129.2, for which a $95.6 valuation allowance has been provided. The carryforward periods range from four years to indefinite, subject to certain limitations under applicable laws. The future tax benefits of net operating loss carryforwards are evaluated on a regular basis, including a review of historical and projected operating results.

The tax effects of temporary differences representing deferred tax assets and liabilities are as follows:

At December 31,	2020			2019
Assets:
Accrued expenses	$	205.3		$	203.5
Net operating loss and tax credit carryforwards		140.1			132.0
Postretirement benefit plans					4.9
Allowance for losses on receivables		36.0			31.4
Goodwill and intangibles		10.0			18.7
Other		122.9			103.3
		514.3			493.8
Valuation allowance		(102.1	)		(118.5	)
		412.2			375.3
Liabilities:
Financial Services leasing depreciation		(765.1	)		(777.5	)
Depreciation and amortization		(168.0	)		(159.4	)
Postretirement benefit plans		(3.0	)
Other		(46.1	)		(28.9	)
		(982.2	)		(965.8	)
Net deferred tax liability	$	(570.0	)	$	(590.5	)

The balance sheet classifications of the Company’s deferred tax assets and liabilities are as follows:

At December 31,	2020			2019
Truck, Parts and Other:
Other noncurrent assets, net	$	90.4		$	115.4
Other liabilities		(3.5	)		(5.3	)
Financial Services:
Other assets		46.8			36.8
Deferred taxes and other liabilities		(703.7	)		(737.4	)
Net deferred tax liability	$	(570.0	)	$	(590.5	)

Cash paid for income taxes was $374.0, $586.0 and $607.6 in 2020, 2019 and 2018, respectively.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

	2020			2019		2018
Balance at January 1	$	30.7		$	21.2	$	22.9
Additions for tax positions related to the current year		5.5			6.5		11.2
Additions for tax positions related to prior years		.3			3.0
Reductions for tax positions related to prior years		(4.2	)
Reductions related to settlements							(5.7	)
Lapse of statute of limitations		(7.8	)				(7.2	)
Balance at December 31	$	24.5		$	30.7	$	21.2

The Company had $24.5, $30.7 and $21.2 of unrecognized tax benefits, of which $23.2, $28.4 and $18.9 would impact the effective tax rate, if recognized, as of December 31, 2020, 2019 and 2018, respectively.

The Company recognized $(.7), $.8 and $(.1) of (income) expense related to interest in 2020, 2019 and 2018, respectively. Accrued interest expense and penalties were $1.2, $1.9 and $1.1 as of December 31, 2020, 2019 and 2018, respectively. Interest and penalties are classified as income taxes in the Consolidated Statements of Income.

The Company believes it is reasonably possible that approximately $5.5 of unrecognized tax benefits, resulting primarily from research and development tax credits, will be resolved within the next 12 months. As of December 31, 2020, the United States Internal Revenue Service has completed examinations of the Company’s tax returns for all years through 2014. The Company’s tax returns for other major jurisdictions remain subject to examination for the years ranging from 2012 through 2020.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Stockholders' Equity

O. STOCKHOLDERS’ EQUITY

Accumulated Other Comprehensive Income (Loss): The components of AOCI and the changes in AOCI, net of tax, included in the Consolidated Balance Sheets and the Consolidated Statements of Stockholders’ Equity, consisted of the following:

	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2020	$	(15.3	)	$	6.1		$	(517.7	)	$	(573.2	)	$	(1,100.1	)
Recorded into AOCI		(78.4	)		10.3			(104.0	)		115.6			(56.5	)
Reclassified out of AOCI		64.5			(1.8	)		43.6						106.3
Net other comprehensive (loss) income		(13.9	)		8.5			(60.4	)		115.6			49.8
Balance at December 31, 2020	$	(29.2	)	$	14.6		$	(578.1	)	$	(457.6	)	$	(1,050.3	)

	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2019	$	2.0		$	(2.3	)	$	(477.8	)	$	(620.4	)	$	(1,098.5	)
Recorded into AOCI		(57.0	)		8.7			(56.8	)		47.2			(57.9	)
Reclassified out of AOCI		39.7			(.3	)		16.9						56.3
Net other comprehensive (loss) income		(17.3	)		8.4			(39.9	)		47.2			(1.6	)
Balance at December 31, 2019	$	(15.3	)	$	6.1		$	(517.7	)	$	(573.2	)	$	(1,100.1	)

	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2018	$	1.2		$	(1.8	)	$	(375.6	)	$	(417.4	)	$	(793.6	)
Recorded into AOCI		90.9			.1			(86.8	)		(213.3	)		(209.1	)
Reclassified out of AOCI		(90.5	)		(.1	)		28.0						(62.6	)
Net other comprehensive income (loss)		.4						(58.8	)		(213.3	)		(271.7	)
Reclassifications to retained earnings in accordance with ASU 2018-02		.4			(.5	)		(43.4	)		10.3			(33.2	)
Balance at December 31, 2018	$	2.0		$	(2.3	)	$	(477.8	)	$	(620.4	)	$	(1,098.5	)

Reclassifications out of AOCI during the years ended December 31, 2020, 2019 and 2018 were as follows:

		AMOUNT RECLASSIFIED OUT OF AOCI
AOCI COMPONENTS	LINE ITEM IN THE CONSOLIDATED STATEMENTS OF INCOME	2020			2019			2018
Unrealized (gains) and losses on    derivative contracts:
Truck, Parts and Other
Foreign-exchange contracts	Net sales and revenues	$	(4.0	)	$	21.2		$	5.4
	Cost of sales and revenues		1.7			(4.1	)		(6.6	)
	Interest and other (income), net		(4.6	)		2.1			(1.6	)
Financial Services
Interest-rate contracts	Interest and other borrowing expenses		94.5			32.5			(118.7	)
	Pre-tax expense increase (reduction)		87.6			51.7			(121.5	)
	Tax (benefit) expense		(23.1	)		(12.0	)		31.0
	After-tax expense increase (reduction)		64.5			39.7			(90.5	)
Unrealized gains on marketable debt securities:
Marketable debt securities	Investment income		(2.4	)		(.4	)		(.2	)
	Tax expense		.6			.1			.1
	After-tax income increase		(1.8	)		(.3	)		(.1	)
Unrealized losses on pension plans:
Truck, Parts and Other
Actuarial loss	Interest and other (income), net		44.2			20.5			35.3
Prior service costs	Interest and other (income), net		1.5			1.4			1.4
Settlement loss	Interest and other (income), net		11.6
	Pre-tax expense increase		57.3			21.9			36.7
	Tax benefit		(13.7	)		(5.0	)		(8.7	)
	After-tax expense increase		43.6			16.9			28.0
Total reclassifications out of AOCI		$	106.3		$	56.3		$	(62.6	)

Other Capital Stock Changes: The Company purchased and retired treasury shares of .7, 1.7 and 5.8 million in 2020, 2019 and 2018, respectively.

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Derivative Financial Instruments

12 Months Ended

Dec. 31, 2020

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

P. DERIVATIVE FINANCIAL INSTRUMENTS

As part of its risk management strategy, the Company enters into derivative contracts to hedge against interest rate and foreign currency risk.

Interest-Rate Contracts: The Company enters into various interest-rate contracts, including interest-rate swaps and cross currency interest-rate swaps. Interest-rate swaps involve the exchange of fixed for floating rate or floating for fixed rate interest payments based on the contractual notional amounts in a single currency. Cross currency interest-rate swaps involve the exchange of notional amounts and interest payments in different currencies. The Company is exposed to interest-rate and exchange-rate risk caused by market volatility as a result of its borrowing activities. The objective of these contracts is to mitigate the fluctuations on earnings, cash flows and fair value of borrowings. Net amounts paid or received are reflected as adjustments to interest expense.

At December 31, 2020, the notional amount of the Company’s interest-rate contracts was $3,280.5. Notional maturities for all interest-rate contracts are $1,241.1 for 2021, $950.0 for 2022, $761.8 for 2023, $169.6 for 2024, $58.9 for 2025 and $99.1 thereafter.

Foreign-Exchange Contracts: The Company enters into foreign-exchange contracts to hedge certain anticipated transactions and assets and liabilities denominated in foreign currencies, particularly the Canadian dollar, the euro, the British pound, the Australian dollar, the Brazilian real and the Mexican peso. The objective is to reduce fluctuations in earnings and cash flows associated with changes in foreign currency exchange rates. The Company enters into foreign-exchange contracts as net investment hedges to reduce the foreign currency exposure from its investments in foreign subsidiaries. At December 31, 2020, the notional amount of the outstanding foreign-exchange contracts was $1,128.8. Foreign-exchange contracts mature within one year.

The following table presents the balance sheet classification, fair value, gross and pro forma net amounts of derivative financial instruments:

At December 31,	2020						2019
	ASSETS			LIABILITIES			ASSETS			LIABILITIES
Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets	$	16.4					$	45.8
Deferred taxes and other liabilities				$	116.1					$	31.0
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets		2.7						10.1
Accounts payable, accrued expenses and other					35.9						9.2
Financial Services:
Deferred taxes and other liabilities					1.2
	$	19.1		$	153.2		$	55.9		$	40.2
Derivatives not designated as hedging instruments:
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets	$	1.1					$	.4
Accounts payable, accrued expenses and other				$	3.3					$	1.8
Financial Services:
Other assets		.3
Deferred taxes and other liabilities					3.4						2.3
	$	1.4		$	6.7		$	.4		$	4.1
Gross amounts recognized in Balance Sheet	$	20.5		$	159.9		$	56.3		$	44.3
Less amounts not offset in financial instruments:
Truck, Parts and Other:
Foreign-exchange contracts		(2.1	)		(2.1	)		(.4	)		(.4	)
Financial Services:
Interest-rate contracts		(12.0	)		(12.0	)		(8.6	)		(8.6	)
Pro forma net amount	$	6.4		$	145.8		$	47.3		$	35.3

The following table presents the amount of (gain) loss from derivative financial instruments reclassified from AOCI into the Consolidated Statements of Income:

Year Ended December 31,		2020			2019			2018
Truck, Parts and Other:
Cash flow hedges	$	(6.9	)	$	19.2		$	(2.8	)
Net investment hedge		(5.6	)		(4.6	)
Total	$	(12.5	)	$	14.6		$	(2.8	)
Financial Services:
Fair value hedges		1.1			1.5			1.8
Cash flow hedges		94.5			32.5			(118.7	)
Total	$	95.6		$	34.0		$	(116.9	)

Fair Value Hedges

Changes in the fair value of derivatives designated as fair value hedges are recorded in earnings together with the changes in fair value of the hedged item attributable to the risk being hedged. The following table presents the amounts recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:

At December 31,	2020			2019
Financial Services
Term notes:
Carrying amount of hedged liabilities	$	90.9		$	90.5
Cumulative basis adjustment included in the carrying amount		(.9	)		(.5	)

The above table excludes the cumulative basis adjustments on discontinued hedge relationships of $(.4) and $(1.5) as of December 31, 2020 and 2019, respectively.

Cash Flow Hedges

Substantially all of the Company’s interest-rate contracts and some foreign-exchange contracts have been designated as cash flow hedges. Changes in the fair value of derivatives designated as cash flow hedges are recorded in AOCI. Amounts in AOCI are reclassified into net income in the same period in which the hedged transaction affects earnings. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows is 7.5 years.

The following table presents the pre-tax effects of (loss) gain on cash flow hedges recognized in other comprehensive income (loss) (OCI):

Year Ended December 31,	2020						2019						2018
	INTEREST-			FOREIGN-			INTEREST-			FOREIGN-			INTEREST-		FOREIGN-
	RATE			EXCHANGE			RATE			EXCHANGE			RATE		EXCHANGE
	CONTRACTS			CONTRACTS			CONTRACTS			CONTRACTS			CONTRACTS		CONTRACTS
(Loss) gain recognized in OCI:
Truck, Parts and Other				$	2.8					$	(31.7	)			$	4.5
Financial Services	$	(107.3	)		(.8	)	$	(44.4	)				$	117.1
	$	(107.3	)	$	2.0		$	(44.4	)	$	(31.7	)	$	117.1	$	4.5

The amount of loss recorded in AOCI at December 31, 2020 that is estimated to be reclassified into earnings in the following 12 months if interest rates and exchange rates remain unchanged is approximately $15.0, net of taxes. The fixed interest earned on finance receivables will offset the amount recognized in interest expense, resulting in a stable interest margin consistent with the Company’s risk management strategy.

The amount of gains or losses reclassified out of AOCI into net income based on the probability that the original forecasted transactions would not occur was nil for the years ended December 31, 2020, 2019 and 2018.

Net Investment Hedges

Changes in the fair value of derivatives designated as net investment hedges are recorded in AOCI as an adjustment to the Cumulative Translation Adjustment (CTA). At December 31, 2020, the notional amount of the outstanding net investment hedges was $344.8. For the year ended December 31, 2020, the pre-tax loss recognized in OCI for the net investment hedges was $20.4.

Derivatives Not Designated As Hedging Instruments

For other risk management purposes, the Company enters into derivative instruments that do not qualify for hedge accounting. These derivative instruments are used to mitigate the risk of market volatility arising from borrowings and foreign currency denominated transactions. Changes in the fair value of derivatives not designated as hedging instruments are recorded in earnings in the period in which the change occurs.

The loss (gain) recognized in earnings related to derivatives not designated as hedging instruments was as follows:

Year Ended December 31,	2020			2019				2018
	INTEREST-	FOREIGN-		INTEREST-	FOREIGN-			INTEREST-	FOREIGN-
	RATE	EXCHANGE		RATE	EXCHANGE			RATE	EXCHANGE
	CONTRACTS	CONTRACTS		CONTRACTS	CONTRACTS			CONTRACTS	CONTRACTS
Truck, Parts and Other:
Cost of sales and revenues		$	.7		$	.5			$	(.3	)
Interest and other (income), net			2.3			5.4				6.9
Financial Services:
Interest and other borrowing expenses			9.4			(10.1	)			(14.9	)
Selling, general and administrative			.8			.1				1.7
		$	13.2		$	(4.1	)		$	(6.6	)

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Fair Value Measurements

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

Q. FAIR VALUE MEASUREMENTS

Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs to valuation techniques used to measure fair value are either observable or unobservable. These inputs have been categorized into the fair value hierarchy described below.

Level 1 – Valuations are based on quoted prices that the Company has the ability to obtain in actively traded markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market or exchange traded market, valuation of these instruments does not require a significant degree of judgment.

Level 2 – Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 – Valuations are based on model-based techniques for which some or all of the assumptions are obtained from indirect market information that is significant to the overall fair value measurement and which require a significant degree of management judgment.

There were no transfers of assets or liabilities between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31, 2020. The Company’s policy is to recognize transfers between levels at the end of the reporting period.

The Company uses the following methods and assumptions to measure fair value for assets and liabilities subject to recurring fair value measurements.

Marketable Securities: The Company’s marketable debt securities consist of municipal bonds, government obligations, investment-grade corporate obligations, commercial paper, asset-backed securities and term deposits. The fair value of U.S. government obligations is determined using the market approach and is based on quoted prices in active markets and are categorized as Level 1.

The fair value of U.S. government agency obligations, non-U.S. government bonds, municipal bonds, corporate bonds, asset-backed securities, commercial paper and term deposits is determined using the market approach and is primarily based on matrix pricing as a practical expedient which does not rely exclusively on quoted prices for a specific security. Significant inputs used to determine fair value include interest rates, yield curves, credit rating of the security and other observable market information and are categorized as Level 2.

Derivative Financial Instruments: The Company’s derivative contracts consist of interest-rate swaps, cross currency swaps and foreign currency exchange contracts. These derivative contracts are traded over the counter and their fair value is determined using industry standard valuation models, which are based on the income approach (i.e., discounted cash flows). The significant observable inputs into the valuation models include interest rates, yield curves, currency exchange rates, credit default swap spreads and forward rates and are categorized as Level 2.

Assets and Liabilities Subject to Recurring Fair Value Measurement

The Company’s assets and liabilities subject to recurring fair value measurements are either Level 1 or Level 2 as follows:

At December 31, 2020	LEVEL 1		LEVEL 2		TOTAL
Assets:
Marketable debt securities
U.S. tax-exempt securities			$	392.4	$	392.4
U.S. corporate securities				232.9		232.9
U.S. government and agency securities	$	86.5		7.9		94.4
Non-U.S. corporate securities				411.5		411.5
Non-U.S. government securities				77.5		77.5
Other debt securities				220.3		220.3
Total marketable debt securities	$	86.5	$	1,342.5	$	1,429.0
Derivatives
Cross currency swaps			$	14.8	$	14.8
Interest-rate swaps				1.6		1.6
Foreign-exchange contracts				4.1		4.1
Total derivative assets			$	20.5	$	20.5
Liabilities:
Derivatives
Cross currency swaps			$	77.6	$	77.6
Interest-rate swaps				38.5		38.5
Foreign-exchange contracts				43.8		43.8
Total derivative liabilities			$	159.9	$	159.9

At December 31, 2019	LEVEL 1		LEVEL 2		TOTAL
Assets:
Marketable debt securities
U.S. tax-exempt securities			$	320.2	$	320.2
U.S. corporate securities				165.7		165.7
U.S. government and agency securities	$	128.4		.9		129.3
Non-U.S. corporate securities				349.8		349.8
Non-U.S. government securities				72.4		72.4
Other debt securities				124.7		124.7
Total marketable debt securities	$	128.4	$	1,033.7	$	1,162.1
Derivatives
Cross currency swaps			$	43.8	$	43.8
Interest-rate swaps				2.0		2.0
Foreign-exchange contracts				10.5		10.5
Total derivative assets			$	56.3	$	56.3
Liabilities:
Derivatives
Cross currency swaps			$	13.5	$	13.5
Interest-rate swaps				17.5		17.5
Foreign-exchange contracts				13.3		13.3
Total derivative liabilities			$	44.3	$	44.3

Fair Value Disclosure of Other Financial Instruments

For financial instruments that are not recognized at fair value, the Company uses the following methods and assumptions to determine the fair value. These instruments are categorized as Level 2, except cash which is categorized as Level 1 and fixed rate loans which are categorized as Level 3.

Cash and Cash Equivalents: Carrying amounts approximate fair value.

Financial Services Net Receivables: For floating-rate loans, wholesale financing, and operating lease and other trade receivables, carrying values approximate fair values. For fixed rate loans, fair values are estimated using the income approach by discounting cash flows to their present value based on assumptions regarding the credit and market risks to approximate current rates for comparable loans. Finance lease receivables and related allowance for credit losses have been excluded from the accompanying table.

Debt: The carrying amounts of Financial Services commercial paper, variable rate bank loans and variable rate term notes approximate fair value. For fixed rate debt, fair values are estimated using the income approach by discounting cash flows to their present value based on current rates for comparable debt.

The Company’s estimate of fair value for fixed rate loans and debt that are not carried at fair value was as follows:

At December 31,	2020				2019
	CARRYING		FAIR		CARRYING		FAIR
	AMOUNT		VALUE		AMOUNT		VALUE
Assets:
Financial Services fixed rate loans	$	5,319.2	$	5,429.5	$	4,914.4	$	4,992.2
Liabilities:
Financial Services fixed rate debt		6,482.0		6,648.6		5,925.9		5,990.7

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Stock Compensation Plans

12 Months Ended

Dec. 31, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Compensation Plans

R. STOCK COMPENSATION PLANS

PACCAR has certain plans under which officers and key employees may be granted options to purchase shares of the Company’s authorized but unissued common stock under plans approved by stockholders. Non‑employee directors and certain officers may be granted restricted shares of the Company’s common stock under plans approved by stockholders. Options outstanding under these plans were granted with exercise prices equal to the fair market value of the Company’s common stock at the date of grant. Options expire no later than ten years from the grant date and generally vest after three years. Restricted stock awards generally vest over three years or earlier upon meeting certain age and service requirements.

The Company recognizes compensation cost on these options and restricted stock awards on a straight-line basis over the requisite period the employee is required to render service less estimated forfeitures based on historical experience. The maximum number of shares of the Company’s common stock authorized for issuance under these plans is 46.7 million shares, and as of December 31, 2020, the maximum number of shares available for future grants was 11.8 million.

The assumptions used in determining the fair value of the option awards for each of the grant years are as follows:

		2020			2019			2018
Risk-free interest rate		1.54	%		2.55	%		2.64	%
Expected volatility		23	%		23	%		23	%
Expected dividend yield		4.1	%		4.9	%		3.8	%
Expected term	6 years			6 years			6 years
Weighted average grant date fair value of options per share	$	10.02		$	8.26		$	10.67

The estimated fair value of each option award is determined on the date of grant using the Black-Scholes-Merton option pricing model that uses assumptions noted in the table above. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on historical volatility. The dividend yield is based on an estimated future dividend yield using projected net income for the next five years, implied dividends and Company stock price. The expected term is based on the period of time that options granted are expected to be outstanding based on historical experience.

The fair value of options granted was $6.4, $7.3 and $6.3 for the years ended December 31, 2020, 2019 and 2018, respectively. The fair value of options vested during the years ended December 31, 2020, 2019 and 2018 was $5.0, $5.8 and $5.3, respectively.

A summary of activity under the Company’s stock plans is presented below:

		2020		2019		2018
Intrinsic value of options exercised	$	26.9	$	31.9	$	13.4
Cash received from stock option exercises		53.8		60.9		19.7
Tax benefit related to stock award exercises		3.8		3.8		2.4
Stock-based compensation		13.0		15.1		13.2
Tax benefit related to stock-based compensation		1.6		1.9		1.9

The summary of options as of December 31, 2020 and changes during the year then ended are presented below:

				PER SHARE		REMAINING		AGGREGATE
	NUMBER			EXERCISE		CONTRACTUAL		INTRINSIC
	OF SHARES			PRICE*		LIFE IN YEARS*		VALUE
Options outstanding at January 1		3,488,300		$	60.18
Granted		641,700			76.18
Exercised		(949,900	)		56.68
Cancelled		(63,600	)		69.75
Options outstanding at December 31		3,116,500		$	64.34		6.48	$	68.4
Vested and expected to vest		3,014,300		$	64.06		6.40	$	67.0
Exercisable		1,323,200		$	56.63		4.15	$	39.2

* Weighted Average

The fair value of restricted shares is determined based upon the stock price on the date of grant. The summary of nonvested restricted shares as of December 31, 2020 and changes during the year then ended is presented below:

	NUMBER			GRANT DATE
NONVESTED SHARES	OF SHARES			FAIR VALUE*
Nonvested awards outstanding at January 1		150,500		$	65.92
Granted		94,400			76.78
Vested		(96,700	)		69.46
Forfeited		(5,800	)		71.47
Nonvested awards outstanding at December 31		142,400		$	70.49

* Weighted Average

As of December 31, 2020, there was $5.4 of total unrecognized compensation cost related to nonvested stock options, which is recognized over a remaining weighted average vesting period of 1.46 years. Unrecognized compensation cost related to nonvested restricted stock awards of $2.0 is expected to be recognized over a remaining weighted average vesting period of 1.26 years.

The dilutive and antidilutive options are shown separately in the table below:

Year Ended December 31,	2020	2019	2018
Additional shares	607,800	621,300	785,100
Antidilutive options	686,100	1,489,400	1,176,600

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Segment and Related Information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment and Related Information

S. SEGMENT AND RELATED INFORMATION

PACCAR operates in three principal segments: Truck, Parts and Financial Services. The Company evaluates the performance of its Truck and Parts segments based on operating profits, which excludes investment income, other income and expense, and income taxes. The Financial Services segment’s performance is evaluated based on income before income taxes. Geographic revenues from external customers are presented based on the country of the customer. The accounting policies of the reportable segments are the same as those applied in the consolidated financial statements as described in Note A.

Truck and Parts: The Truck segment includes the design and manufacture of high-quality, light-, medium- and heavy-duty commercial trucks and the Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles, both of which are sold through the same network of independent dealers. These segments derive a large proportion of their revenues and operating profits from operations in North America and Europe. The Truck segment incurs substantial costs to design, manufacture and sell trucks to its customers. The sale of new trucks provides the Parts segment with the basis for parts sales that may continue over the life of the truck, but are generally concentrated in the first five years after truck delivery. To reflect the benefit the Parts segment receives from costs incurred by the Truck segment, certain expenses are allocated from the Truck segment to the Parts segment. The expenses allocated are based on a percentage of the average annual expenses for factory overhead, engineering, research and development and SG&A expenses for the preceding five years. The allocation is based on the ratio of the average parts direct margin dollars (net sales less material and labor costs) to the total truck and parts direct margin dollars for the previous five years. The Company believes such expenses have been allocated on a reasonable basis. Truck segment assets related to the indirect expense allocation are not allocated to the Parts segment.

Financial Services: The Financial Services segment derives its earnings primarily from financing or leasing of PACCAR products and services provided to truck customers and dealers. Revenues are primarily generated from operations in North America and Europe.

In Europe, the Financial Services and Truck segments centralized the marketing of used trucks, including those units sold by the Truck segment subject to an RVG. Beginning in the fourth quarter of 2019, when a customer returns the truck at the end of the RVG contract, the Company’s Truck segment records a reduction in an RVG liability and the Company’s Financial Services segment records a used truck asset and revenue from the subsequent sale. Certain gains and losses from the sale of these used trucks are shared with the Truck segment. Revenues from the sale of used trucks from the Truck segment in Europe in prior periods are immaterial.  

Other: Included in Other is the Company’s industrial winch manufacturing business as well as sales, income and expenses not attributable to a reportable segment. Other also includes non-service cost components of pension expense and a portion of corporate

expenses. Intercompany interest income (expense) on cash advances to the financial services companies is included in Other and was $1.4, $.3 and $(.3) for 2020, 2019 and 2018, respectively.

Geographic Area Data		2020		2019		2018
Net sales and revenues:
United States	$	10,526.6	$	15,119.3	$	13,165.7
Europe		4,871.2		6,104.7		6,071.9
Other		3,330.7		4,375.7		4,258.1
	$	18,728.5	$	25,599.7	$	23,495.7
Property, plant and equipment, net:
United States	$	1,633.0	$	1,556.4	$	1,353.8
Belgium		596.2		395.7		237.4
The Netherlands		499.0		399.8		397.8
Other		542.2		531.9		491.9
	$	3,270.4	$	2,883.8	$	2,480.9
Equipment on operating leases, net:
United States	$	1,219.0	$	1,390.1	$	1,405.1
Poland		359.4		343.5		327.8
France		349.7		315.0		246.8
Germany		346.4		358.3		361.0
Spain		310.8		276.1		249.8
Mexico		302.3		320.5		306.4
United Kingdom		125.4		113.6		130.3
Other		571.7		531.0		614.4
	$	3,584.7	$	3,648.1	$	3,641.6

Business Segment Data		2020			2019			2018
Net sales and revenues:
Truck	$	13,643.0		$	20,403.5		$	18,863.1
Less intersegment		(478.2	)		(414.0	)		(676.1	)
External customers		13,164.8			19,989.5			18,187.0
Parts		3,962.7			4,073.1			3,896.2
Less intersegment		(49.8	)		(48.2	)		(57.3	)
External customers		3,912.9			4,024.9			3,838.9
Other		76.6			105.3			112.7
		17,154.3			24,119.7			22,138.6
Financial Services		1,574.2			1,480.0			1,357.1
	$	18,728.5		$	25,599.7		$	23,495.7
Income (loss) before income taxes:
Truck	$	581.4		$	1,904.9		$	1,672.1
Parts		799.3			830.8			768.6
Other		18.2			(17.7	)		2.7
		1,398.9			2,718.0			2,443.4
Financial Services		223.1			298.9			305.9
Investment income		35.9			82.3			60.9
	$	1,657.9		$	3,099.2		$	2,810.2
Depreciation and amortization:
Truck	$	292.2		$	381.9		$	406.2
Parts		10.8			10.2			9.2
Other		20.8			20.3			18.4
		323.8			412.4			433.8
Financial Services		725.2			664.9			620.3
	$	1,049.0		$	1,077.3		$	1,054.1
Expenditures for long-lived assets:
Truck	$	556.0		$	664.9		$	778.5
Parts		18.4			46.2			29.4
Other		36.4			51.0			38.8
		610.8			762.1			846.7
Financial Services		1,046.7			1,378.6			1,085.1
	$	1,657.5		$	2,140.7		$	1,931.8
Segment assets:
Truck	$	5,971.9		$	5,609.0		$	5,347.3
Parts		1,255.6			1,172.1			1,090.9
Other		398.7			339.2			345.0
Cash and marketable securities		4,834.0			5,169.4			4,299.6
		12,460.2			12,289.7			11,082.8
Financial Services		15,799.8			16,071.4			14,399.6
	$	28,260.0		$	28,361.1		$	25,482.4

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Quarterly Results (Unaudited)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results (Unaudited)

quarterly results (unaudited)

	QUARTER
	FIRST		SECOND		THIRD		FOURTH
	(millions, except per share data)
2020
Truck, Parts and Other:
Net sales and revenues	$	4,778.0	$	2,701.9	$	4,538.4	$	5,136.0
Cost of sales and revenues		4,189.6		2,441.5		3,958.3		4,487.0
Research and development		71.0		66.5		64.7		71.7
Financial Services:
Revenues		383.7		360.3		397.6		432.6
Interest and other borrowing expenses		56.4		46.9		45.2		43.6
Depreciation and other expenses		229.4		224.1		262.5		292.0
Net Income		359.4		147.7		385.5		405.8
Net Income Per Share:*
Basic	$	1.04	$	.43	$	1.11	$	1.17
Diluted		1.03		.43		1.11		1.17

2019
Truck, Parts and Other:
Net sales and revenues	$	6,138.1	$	6,266.5	$	6,004.2	$	5,710.9
Cost of sales and revenues		5,217.1		5,341.7		5,106.8		4,890.0
Research and development		78.3		82.5		82.2		83.6
Financial Services:
Revenues		349.5		361.4		362.8		406.3
Interest and other borrowing expenses		53.4		60.0		59.6		57.5
Depreciation and other expenses		177.4		183.6		195.3		241.9
Net Income		629.0		619.7		607.9		531.3
Net Income Per Share:
Basic	$	1.81	$	1.79	$	1.75	$	1.53
Diluted		1.81		1.78		1.75		1.53

* The sum of quarterly per share amounts may not equal per share amounts reported for year-to-date periods. This is due to changes in the number of weighted shares outstanding and the effects of rounding for each period.

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Description of Operations

Description of Operations: PACCAR Inc (the Company or PACCAR) is a multinational company operating in three principal segments: (1) the Truck segment includes the design and manufacture of high-quality, light-, medium- and heavy-duty commercial trucks; (2) the Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles; and (3) the Financial Services segment (PFS) 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. PACCAR’s sales and revenues are derived primarily from North America and Europe. The Company also operates in Australia and Brasil and sells trucks and parts to customers in Asia, Africa, the Middle East and South America.

Principles of Consolidation

Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned domestic and foreign subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.

Use of Estimates

Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue Recognition

Revenue Recognition:

Truck, Parts and Other: The Company enters into sales contracts with customers associated with purchases of the Company’s products and services including trucks, parts, product support, and other related services. Generally, the Company recognizes revenue for the amount of consideration it will receive for delivering a product or service to a customer. Revenue is recognized when the customer obtains control of the product or receives benefits of the service. The Company excludes sales taxes, value added taxes and other related taxes assessed by government agencies from revenue. There are no significant financing components included in product or services revenue since generally customers pay shortly after the products or services are transferred. In the Truck and Parts segment, when the Company grants extended payment terms on selected receivables and charges interest, interest income is recognized when earned.

The Company recognizes truck and parts sales as revenue when control of the products is transferred to customers which generally occurs upon shipment, except for certain truck sales which are subject to a residual value guarantee (RVG) by the Company. The standard payment term for trucks and aftermarket parts is typically within 30 days, but the Company may grant extended payment terms on selected receivables. The Company recognizes revenue for the invoice amount adjusted for estimated sales incentives and returns. Sales incentives and returns are estimated based on historical experience and are adjusted to current period revenue when the most likely amount of consideration the Company expects to receive changes or becomes fixed. Truck and part sales include a standard product warranty which is included in cost of sales. The Company has elected to treat delivery services as a fulfillment activity with revenues recognized when the customer obtains control of the product. Delivery revenue is included in revenues and the related costs are included in cost of sales. As a practical expedient, the Company is not disclosing truck order backlog, as a significant majority of the backlog has a duration of less than one year.

Truck sales with RVGs that allow customers the option to return their truck are accounted for as a sale when the customer does not have an economic incentive to return the truck to the Company, or as an operating lease when the customer does have an economic incentive to return the truck. The estimate of customers’ economic incentive to return the trucks is based on an analysis of historical guaranteed buyback value and estimated market value. When truck sales with RVGs are accounted for as a sale, revenue is recognized when the truck is transferred to the customer less an amount for expected returns. Expected return rates are estimated by using a historical weighted average return rate over a seven-year period. The estimated value of the truck assets to be returned and the related return liabilities at December 31, 2020 were $627.9 and $664.1, respectively, compared to $473.0 and $503.4 at December 31, 2019, respectively. The Company’s total commitment to acquire trucks at a guaranteed value for contracts accounted for as a sale was $1,184.7 at December 31, 2020.

Revenues from extended warranties, operating leases and other include optional extended warranty and repair and maintenance (R&M) service contracts which can be purchased for periods generally ranging up to five years. The Company defers revenue based on stand-alone observable selling prices when it receives payments in advance and generally recognizes the revenue on a straight-line basis over the warranty or R&M contract periods. See Note I, Product Support Liabilities, in the Notes to the Consolidated Financial Statements for further information. Also included are truck sales with an RVG accounted for as an operating lease. A liability is created for the residual value obligation with the remainder of the proceeds recorded as deferred revenue. The deferred revenue is recognized on a straight-line basis over the guarantee period, which typically ranges from three to five years. Total operating lease income from truck sales with RVGs for the years ended December 31, 2020, 2019 and 2018 was $104.2, $159.7 and $152.6, respectively.

Aftermarket parts sales allow for returns which are estimated at the time of sale based on historical data. At December 31, 2020, the estimated value of the returned goods asset and the related return liability were $62.2 and $142.0, respectively, compared to $56.3 and $126.3 at December 31, 2019, respectively. Parts dealer services and other revenues are recognized as services are performed.     

Revenue from winch sales and other is primarily derived from the industrial winch business. Winch sales are recognized when the product is transferred to a customer, which generally occurs upon shipment. Also within this category are other revenues not attributable to a reportable segment.

Financial Services: The Company’s Financial Services segment products include loans to customers collateralized by the vehicles being financed, finance leases to lease equipment to retail customers and dealers, dealer wholesale financing which includes floating-rate wholesale loans to PACCAR dealers for new and used trucks, and operating leases which include rentals on Company owned equipment. Interest income from finance and other receivables is recognized using the interest method. Certain loan origination costs are deferred and amortized to interest income over the expected life of the contracts using the straight-line method which approximates the interest method.

Operating lease rental revenue is recognized on a straight-line basis over the term of the lease. Customer contracts may include additional services such as excess mileage, repair and maintenance and other services on which revenue is recognized when earned. The Company’s full-service lease arrangements bundle these additional services. Rents for full-service lease contracts are allocated between lease and non-lease components based on the relative stand-alone price of each component. Taxes, such as sales and use and value added, which are collected by the Company from a customer, are excluded from the measurement of lease income and expenses. Rental revenues for the years ended December 31, 2020, 2019 and 2018 were $802.3, $798.2 and $797.1, respectively. Depreciation and related leased unit operating expenses were $776.5, $721.6 and $686.9 for the years ended December 31, 2020, 2019 and 2018, respectively.

Recognition of interest income and rental revenue is suspended (put on non-accrual status) when the receivable becomes more than 90 days past the contractual due date or earlier if some other event causes the Company to determine that collection is not probable. Accordingly, no finance receivables more than 90 days past due were accruing interest at December 31, 2020 or December 31, 2019. Recognition is resumed if the receivable becomes current by the payment of all amounts due under the terms of the existing contract and collection of remaining amounts is considered probable (if not contractually modified) or if the customer makes scheduled payments for three months and collection of remaining amounts is considered probable (if contractually modified). Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms.

Finance leases are secured by the trucks and related equipment being leased and the lease terms generally range from three to five years depending on the type and use of the equipment. The lessee is required to either purchase the equipment or guarantee to the Company a stated residual value upon the disposition of the equipment at the end of the finance lease term.

Operating lease terms generally range from three to five years. At the end of the operating lease term, the lessee has the option to return the equipment to the Company or purchase the equipment at its fair market value.  

The Company determines its estimate of the residual value of leased vehicles by considering the length of the lease term, the truck model, the expected usage of the truck and anticipated market demand. If the sales price of the truck at the end of the agreement differs from the Company’s estimated residual value, a gain or loss will result. Future market conditions, changes in government regulations and other factors outside the Company’s control could impact the ultimate sales price of trucks returned under these contracts. Residual values are reviewed regularly and adjusted if market conditions warrant.

Cash and Cash Equivalents

Cash and Cash Equivalents: Cash equivalents consist of liquid investments with a maturity at date of purchase of 90 days or less.

Marketable Debt Securities

Marketable Debt Securities: The Company's investments in marketable debt securities are classified as available-for-sale. These investments are stated at fair value and may include an allowance for credit losses. Changes in the allowance for credit losses are recognized in the current period earnings and any unrealized gains or losses, net of tax, are included as a component of accumulated other comprehensive income (loss) (AOCI).

The Company utilizes third-party pricing services for all of its marketable debt security valuations. The Company reviews the pricing methodology used by the third-party pricing services, including the manner employed to collect market information. On a quarterly basis, the Company also performs review and validation procedures on the pricing information received from the third-party

providers. These procedures help ensure the fair value information used by the Company is determined in accordance with applicable accounting guidance.

The Company evaluates its investment in marketable debt securities at the end of each reporting period to determine if a decline in fair value is the result of credit losses or unrealized losses. In assessing credit losses, the Company considers the collectability of principal and interest payments by monitoring changes to issuers’ credit ratings, specific credit events associated with individual issuers as well as the credit ratings of any financial guarantor. The Company considers its intent for selling the security and whether it is more likely than not the Company will be able to hold the security until the recovery of any credit losses and unrealized losses. Charges against the allowance for credit losses occur when a security with credit losses is sold or the Company no longer intends to hold that security.

Receivables

Receivables:

Trade and Other Receivables: The Company’s trade and other receivables are recorded at cost, net of allowances. At December 31, 2020 and 2019, respectively, trade and other receivables included trade receivables from dealers and customers of $942.7 and $1,055.0 and other receivables of $254.8 and $251.1 relating primarily to value added tax receivables and supplier allowances and rebates.

Finance and Other Receivables:

Loans – Loans represent fixed or floating-rate loans to customers collateralized by the vehicles purchased and are recorded at amortized cost.

Finance leases – Finance leases are sales-type finance leases, which lease equipment to retail customers and dealers. These leases are reported as the sum of minimum lease payments receivable and estimated residual value of the property subject to the contracts, reduced by unearned interest.

Dealer wholesale financing – Dealer wholesale financing is floating-rate wholesale loans to PACCAR dealers for new and used trucks and are recorded at amortized cost. The loans are collateralized by the trucks being financed.

Operating lease receivables and other – Operating lease receivables and other include monthly rentals due on operating leases, unamortized loan and lease origination costs, interest on loans and other amounts due within one year in the normal course of business.

Allowance for Credit Losses

Allowance for Credit Losses:

Truck, Parts and Other: The Company historically has not experienced significant losses or past due amounts on trade and other receivables in its Truck, Parts and Other businesses. Accounts are considered past due once the unpaid balance is over 30 days outstanding based on contractual payment terms. Accounts are charged off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible. The allowance for credit losses for Truck, Parts and Other was $.6 for the years ended December 31, 2020 and 2019. Net charge-offs were nil, $.3 and $.1 for the years ended December 31, 2020, 2019 and 2018, respectively.

Financial Services: The Company continuously monitors the payment performance of its finance receivables. For large retail finance customers and dealers with wholesale financing, the Company regularly reviews their financial statements and makes site visits and phone contact as appropriate. If the Company becomes aware of circumstances that could cause those customers or dealers to face financial difficulty, whether or not they are past due, the customers are placed on a watch list.

The Company modifies loans and finance leases in the normal course of its Financial Services operations. 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. Modifications for credit reasons are changes to contract terms for customers considered to be in financial difficulty. 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. When the Company modifies a loan or finance lease for credit reasons and grants a concession, the modification is classified as a troubled debt restructuring (TDR). The Company does not typically grant credit modifications for customers that do not meet minimum underwriting standards since the Company normally repossesses the financed equipment in these circumstances. When such modifications do occur, they are considered TDRs. In accordance with FASB statement, Prudential Regulator Guidance Concerning

Troubled Debt Restructurings, issued on March 22, 2020, short-term modifications granted to customers were not considered TDRs if they were not past due and were seeking to manage their liquidity needs because of the effects of the COVID-19 pandemic.

On average, modifications extended contractual terms by approximately three months in 2020 and five months in 2019 and did not have a significant effect on the weighted average term or interest rate of the total portfolio at December 31, 2020 and 2019.

The Company has developed a systematic methodology for determining the allowance for credit losses for its two portfolio segments, retail and wholesale. The retail segment consists of retail loans and sales-type finance leases, net of unearned interest. The wholesale segment consists of truck inventory financing loans to dealers that are collateralized by trucks and other collateral. The wholesale segment generally has less risk than the retail segment. Wholesale receivables generally are shorter in duration than retail receivables, and the Company requires periodic reporting of the wholesale dealer’s financial condition, conducts periodic audits of the trucks being financed and in many cases, obtains guarantees or other security such as dealership assets. In determining the allowance for credit losses, retail loans and finance leases are evaluated together since they relate to a similar customer base, their contractual terms require regular payment of principal and interest, generally over three to five years, and they are secured by the same type of collateral. The allowance for credit losses consists of both specific and general reserves.

The Company individually evaluates certain finance receivables for impairment. Finance receivables that are evaluated individually for impairment consist of all wholesale accounts and certain large retail accounts with past due balances or otherwise determined to be at a higher risk of loss. A finance receivable is impaired if it is considered probable the Company will be unable to collect all contractual interest and principal payments as scheduled. In addition, all retail loans and leases which have been classified as TDRs and all customer accounts over 90 days past due are considered impaired. Generally, impaired accounts are on non-accrual status. Impaired accounts classified as TDRs which have been performing for 90 consecutive days are placed on accrual status if it is deemed probable that the Company will collect all principal and interest payments.

Impaired receivables are generally considered collateral dependent. Large balance retail and all wholesale impaired receivables are individually evaluated to determine the appropriate reserve for losses. The determination of reserves for large balance impaired receivables considers the fair value of the associated collateral. When the underlying collateral fair value exceeds the Company’s amortized cost basis, no reserve is recorded. Small balance impaired receivables with similar risk characteristics are evaluated as a separate pool to determine the appropriate reserve for losses using the historical loss information discussed below.

The Company evaluates finance receivables that are not individually impaired and share similar risk characteristics on a collective basis and determines the general allowance for credit losses for both retail and wholesale receivables based on historical loss information, using past due account data, current market conditions, and expected changes in future macroeconomic conditions that affect collectability. Historical credit loss data provides relevant information of expected credit losses. The historical information used includes assumptions regarding the likelihood of collecting current and past due accounts, repossession rates, and the recovery rate on the underlying collateral based on used truck values and other pledged collateral or recourse.

The Company has developed a range of loss estimates for each of its country portfolios based on historical experience, taking into account loss frequency and severity in both strong and weak truck market conditions. A projection is made of the range of estimated credit losses inherent in the portfolio from which an amount is determined based on current market conditions and other factors impacting the creditworthiness of the Company’s borrowers and their ability to repay. Adjustments to historical loss information are made for changes in forecasted economic conditions that are specific to the industry and markets in which the Company conducts business. The Company utilizes economic forecasts from third party sources and determines expected losses based on historical experience under similar market conditions. After determining the appropriate level of the allowance for credit losses, a provision for losses on finance receivables is charged to income as necessary to reflect management’s estimate of expected credit losses, net of recoveries, inherent in the portfolio.

In determining the fair value of the collateral, the Company uses a pricing matrix and categorizes the fair value as Level 2 in the hierarchy of fair value measurement. The pricing matrix is reviewed quarterly and updated as appropriate. The pricing matrix considers the make, model and year of the equipment as well as recent sales prices of comparable equipment sold individually, which

is the lowest unit of account, through wholesale channels to the Company’s dealers (principal market). The fair value of the collateral also considers the overall condition of the equipment.

Accounts are charged off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible, which generally occurs upon repossession of the collateral. Typically the timing between the repossession and charge-off is not significant. In cases where repossession is delayed (e.g., for legal proceedings), the Company records a partial charge-off. The charge-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost basis.

Inventories

Inventories: Inventories are stated at the lower of cost or market. Cost of inventories in the U.S. is determined principally by the last‑in, first-out (LIFO) method. Cost of all other inventories is determined principally by the first-in, first-out (FIFO) method. Cost of sales and revenues include shipping and handling costs incurred to deliver products to dealers and customers.

Equipment on Operating Leases

Equipment on Operating Leases: The Company’s Financial Services segment leases equipment under operating leases to its customers. In addition, in the Truck segment, equipment sold to customers in Europe subject to an RVG by the Company may be accounted for as an operating lease. Equipment is recorded at cost and is depreciated on the straight-line basis to the lower of the estimated residual value or guarantee value. Lease and guarantee periods generally range from three to five years. Estimated useful lives of the equipment range from three to ten years. The Company reviews residual values of equipment on operating leases periodically to determine that recorded amounts are appropriate.

Property, Plant and Equipment

Property, Plant and Equipment: Property, plant and equipment are stated at cost. Depreciation is computed by the straight-line method based on the estimated useful lives of various classes of assets. Certain production tooling and equipment are amortized on a unit of production basis.

Long-lived Assets and Goodwill

Long-lived Assets and Goodwill: The Company evaluates the carrying value of property, plant and equipment when events and circumstances warrant a review. Goodwill is tested for impairment at least on an annual basis. There were no significant impairment charges for the three years ended December 31, 2020. Goodwill was $118.8 and $109.1 at December 31, 2020 and 2019, respectively. The increase in value was due to currency translation.

Product Support Liabilities

Product Support Liabilities: Product support liabilities include estimated future payments related to product warranties and deferred revenues on optional extended warranties and R&M contracts. The Company generally offers one year warranties covering most of its vehicles and related aftermarket parts. For vehicles equipped with engines manufactured by PACCAR, the Company generally offers two year warranties on the engine. Specific terms and conditions vary depending on the product and the country of sale. Optional extended warranty and R&M contracts can be purchased for periods which generally range up to five years. Warranty expenses and reserves are estimated and recorded at the time products or contracts are sold based on historical and current data and reasonable expectations for the future regarding the frequency and cost of warranty claims, net of any recoveries. The Company periodically assesses the adequacy of its recorded liabilities and adjusts them as appropriate to reflect actual experience. Revenue from extended warranty and R&M contracts is deferred and recognized to income generally on a straight-line basis over the contract period. Warranty and R&M costs on these contracts are recognized as incurred.

Derivative Financial Instruments

Derivative Financial Instruments: As part of its risk management strategy, the Company enters into derivative contracts to hedge against interest rate and foreign currency risk. Certain derivative instruments designated as fair value hedges, cash flow hedges or net investment hedges are subject to hedge accounting. Derivative instruments that are not subject to hedge accounting are held as derivatives not designated as hedged instruments. The Company’s policies prohibit the use of derivatives for speculation or trading. At the inception of each hedge relationship, the Company documents its risk management objectives, procedures and accounting treatment. All of the Company’s interest-rate and certain foreign-exchange contracts are transacted under International Swaps and Derivatives Association (ISDA) master agreements. Each agreement permits the net settlement of amounts owed in the event of default and certain other termination events. For derivative financial instruments, the Company has elected not to offset derivative positions in the balance sheet with the same counterparty under the same agreements and is not required to post or receive collateral.

Exposure limits and minimum credit ratings are used to minimize the risks of counterparty default. The Company’s maximum exposure to potential default of its derivative counterparties is limited to the asset position of its derivative portfolio. The asset position of the Company’s derivative portfolio was $20.5 at December 31, 2020.

The Company uses regression analysis to assess effectiveness of interest-rate contracts and net investment hedges at inception and uses quantitative analysis to assess subsequent effectiveness on a quarterly basis. For foreign-exchange contracts, the Company performs quarterly assessments to ensure that critical terms continue to match. All components of the derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. Hedge accounting is discontinued prospectively when the Company determines that a derivative financial instrument has ceased to be a highly effective hedge. Cash flows from derivative instruments are included in operating activities in the Consolidated Statements of Cash Flows.

As part of its risk management strategy, the Company enters into derivative contracts to hedge against interest rate and foreign currency risk.

Foreign Currency Translation

Foreign Currency Translation: For most of the Company’s foreign subsidiaries, the local currency is the functional currency. All assets and liabilities are translated at year-end exchange rates and all income statement amounts are translated at the weighted average rates for the period. Translation adjustments are recorded in AOCI. The Company uses the U.S. dollar as the functional currency for all but one of its Mexican subsidiaries, which uses the local currency. For the U.S. functional currency entities in Mexico, inventories, cost of sales, property, plant and equipment and depreciation are remeasured at historical rates and resulting adjustments are included in net income.

Earnings per Share

Earnings per Share: Basic earnings per common share are computed by dividing earnings by the weighted average number of common shares outstanding, plus the effect of any participating securities. Diluted earnings per common share are computed assuming that all potentially dilutive securities are converted into common shares under the treasury stock method.

New Accounting Pronouncements

New Accounting Pronouncements

New Credit Loss Standard

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, including subsequently issued ASUs to clarify the implementation guidance in ASU 2016-13. The amendment introduces new guidance for credit losses on financial assets measured at amortized cost, including finance receivables, trade receivables and available-for-sale debt securities. Under this new model, expected credit losses are based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect collectability, replacing the previous incurred loss model. This ASU also updates the methodology for recording credit losses on available-for-sale debt securities from the write-down for other-than-temporary impairment to the allowance approach. The ASU is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. The Company adopted this ASU on January 1, 2020 on a modified retrospective basis as required, with a cumulative effect adjustment to Retained earnings as of the beginning of the period of adoption. The standard requires the application of the new credit impairment model for debt securities prospectively.

The cumulative effect of the changes made to the Company’s Consolidated Balance Sheet on January 1, 2020 for the adoption of ASU 2016-13 was as follows:

	BALANCE AT DECEMBER 31, 2019		CHANGE DUE TO NEW STANDARD			BALANCE AT JANUARY 1, 2020
Consolidated Balance Sheets
FINANCIAL SERVICES:
ASSETS
Finance and other receivables, net	$	12,086.0	$	(6.2	)	$	12,079.8
Other assets		715.0		.1			715.1
LIABILITIES
Deferred taxes and other liabilities		790.2		(1.5	)		788.7
STOCKHOLDERS' EQUITY
Retained earnings		10,398.5		(4.6	)		10,393.9

Other New Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate

Reform on Financial Reporting. This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period and will be in effect for a limited time through December 31, 2022. The Company adopted this ASU as of October 1, 2020. The Company will apply the accounting relief as relevant contract and hedge accounting relationship modifications are made during the reference rate reform transition period. The Company does not expect the standard to have a material impact on its consolidated financial statements.

In addition to adopting the ASUs disclosed above, the Company adopted the following standards on January 1, 2020, which had no material impact on the Company’s consolidated financial statements.

STANDARD	DESCRIPTION
2018-13	Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.
2018-15	Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.
2019-12	Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.

The FASB also issued the following standard, which is not expected to have a material impact on the Company’s consolidated financial statements.

STANDARD	DESCRIPTION	EFFECTIVE DATE
2018-14 *	Compensation – Retirement Benefits – Defined Benefit Plans – General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans.	January 1, 2021

* The Company will adopt on the effective date.

Fair Value Measurement Policy

Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs to valuation techniques used to measure fair value are either observable or unobservable. These inputs have been categorized into the fair value hierarchy described below.

Level 1 – Valuations are based on quoted prices that the Company has the ability to obtain in actively traded markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market or exchange traded market, valuation of these instruments does not require a significant degree of judgment.

Level 2 – Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 – Valuations are based on model-based techniques for which some or all of the assumptions are obtained from indirect market information that is significant to the overall fair value measurement and which require a significant degree of management judgment.

There were no transfers of assets or liabilities between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31, 2020. The Company’s policy is to recognize transfers between levels at the end of the reporting period.

The Company uses the following methods and assumptions to measure fair value for assets and liabilities subject to recurring fair value measurements.

Marketable Securities: The Company’s marketable debt securities consist of municipal bonds, government obligations, investment-grade corporate obligations, commercial paper, asset-backed securities and term deposits. The fair value of U.S. government obligations is determined using the market approach and is based on quoted prices in active markets and are categorized as Level 1.

The fair value of U.S. government agency obligations, non-U.S. government bonds, municipal bonds, corporate bonds, asset-backed securities, commercial paper and term deposits is determined using the market approach and is primarily based on matrix pricing as a practical expedient which does not rely exclusively on quoted prices for a specific security. Significant inputs used to determine fair value include interest rates, yield curves, credit rating of the security and other observable market information and are categorized as Level 2.

Derivative Financial Instruments: The Company’s derivative contracts consist of interest-rate swaps, cross currency swaps and foreign currency exchange contracts. These derivative contracts are traded over the counter and their fair value is determined using industry standard valuation models, which are based on the income approach (i.e., discounted cash flows). The significant observable inputs into the valuation models include interest rates, yield curves, currency exchange rates, credit default swap spreads and forward rates and are categorized as Level 2.

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Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

ASU 2016-13

New Accounting Pronouncements Or Change In Accounting Principle [Line Items]

Summary of Effect of the Changes Made by the Adoption of ASU

The cumulative effect of the changes made to the Company’s Consolidated Balance Sheet on January 1, 2020 for the adoption of ASU 2016-13 was as follows:

	BALANCE AT DECEMBER 31, 2019		CHANGE DUE TO NEW STANDARD			BALANCE AT JANUARY 1, 2020
Consolidated Balance Sheets
FINANCIAL SERVICES:
ASSETS
Finance and other receivables, net	$	12,086.0	$	(6.2	)	$	12,079.8
Other assets		715.0		.1			715.1
LIABILITIES
Deferred taxes and other liabilities		790.2		(1.5	)		788.7
STOCKHOLDERS' EQUITY
Retained earnings		10,398.5		(4.6	)		10,393.9

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Sales and Revenues (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of Revenues by Major Sources

The following table disaggregates Truck, Parts and Other revenues by major sources:

Year Ended December 31,	2020		2019
Truck
Truck sales	$	12,466.9	$	19,225.2
Revenues from extended warranties, operating leases and other		697.9		764.3
		13,164.8		19,989.5
Parts
Parts sales		3,803.3		3,912.1
Revenues from dealer services and other		109.6		112.8
		3,912.9		4,024.9
Winch sales and other		76.6		105.3
Truck, Parts and Other sales and revenues	$	17,154.3	$	24,119.7

Financial Services

Summary of Financial Services Lease Revenues by Lease Type

The following table summarizes Financial Services lease revenues by lease type:

Year Ended December 31,	2020		2019
Finance lease revenues	$	189.2	$	199.7
Operating lease revenues		802.3		798.2
Total lease revenues	$	991.5	$	997.9

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Investments in Marketable Debt Securities (Tables)

12 Months Ended

Dec. 31, 2020

Available For Sale Securities [Abstract]

Marketable Debt Securities

Marketable debt securities consisted of the following at December 31:

	AMORTIZED		UNREALIZED		UNREALIZED		FAIR
2020	COST		GAINS		LOSSES		VALUE
U.S. tax-exempt securities	$	388.1	$	4.4	$	.1	$	392.4
U.S. corporate securities		229.6		3.3				232.9
U.S. government and agency securities		92.1		2.3				94.4
Non-U.S. corporate securities		406.0		5.5				411.5
Non-U.S. government securities		77.0		.5				77.5
Other debt securities		216.9		3.4				220.3
	$	1,409.7	$	19.4	$	.1	$	1,429.0

	AMORTIZED		UNREALIZED		UNREALIZED		FAIR
2019	COST		GAINS		LOSSES		VALUE
U.S. tax-exempt securities	$	318.1	$	2.2	$	.1	$	320.2
U.S. corporate securities		163.8		1.9				165.7
U.S. government and agency securities		128.4		.9				129.3
Non-U.S. corporate securities		347.7		2.3		.2		349.8
Non-U.S. government securities		72.3		.2		.1		72.4
Other debt securities		123.7		1.1		.1		124.7
	$	1,154.0	$	8.6	$	.5	$	1,162.1

Marketable Debt Securities Continuous Unrealized Losses

Marketable debt securities with continuous unrealized losses and their related fair values were as follows:

At December 31,	2020				2019
	LESS THAN TWELVE MONTHS		TWELVE MONTHS OR GREATER		LESS THAN TWELVE MONTHS		TWELVE MONTHS OR GREATER
Fair value	$	81.1	$	1.3	$	177.0	$	31.4
Unrealized losses		.1				.4		.1

Contractual Maturities of Debt Securities

Contractual maturities on marketable debt securities at December 31, 2020 were as follows:

	AMORTIZED		FAIR
Maturities:	COST		VALUE
Within one year	$	313.9	$	315.7
One to five years		1,088.6		1,106.1
Six to ten years		5.2		5.2
More than ten years		2.0		2.0
	$	1,409.7	$	1,429.0

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Inventories (Tables)

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

Inventories

Inventories include the following:

At December 31,	2020			2019
Finished products	$	610.0		$	584.6
Work in process and raw materials		801.9			754.9
		1,411.9			1,339.5
Less LIFO reserve		(190.0	)		(186.3	)
	$	1,221.9		$	1,153.2

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Finance and Other Receivables (Tables)

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Finance and Other Receivables

Finance and other receivables include the following:

At December 31,	2020			2019
Loans	$	5,839.1		$	5,241.7
Finance leases		3,944.7			3,906.7
Dealer wholesale financing		2,012.4			2,907.4
Operating lease receivables and other		151.5			142.6
	$	11,947.7		$	12,198.4
Less allowance for losses:
Loans and leases		(120.4	)		(104.4	)
Dealer wholesale financing		(3.4	)		(4.3	)
Operating lease receivables and other		(3.2	)		(3.7	)
	$	11,820.7		$	12,086.0

Annual Minimum Payments Due on Loans

Annual minimum payments due on loans are as follows:

Beginning January 1,	LOANS
2021	$	1,758.4
2022		1,480.1
2023		1,223.6
2024		881.8
2025		380.0
Thereafter		115.2
	$	5,839.1

Annual Minimum Payments Due on Finance Lease Receivables and a Reconciliation of the Undiscounted Cash Flows to the Net Investment in Finance Leases

Annual minimum payments due on finance lease receivables and a reconciliation of the undiscounted cash flows to the net investment in finance leases are as follows:

	FINANCE
Beginning January 1,	LEASES
2021	$	1,310.4
2022		1,030.5
2023		775.0
2024		458.8
2025		223.4
Thereafter		82.5
		3,880.6
Unguaranteed residual values		458.8
Unearned interest on finance leases		(394.7	)
Net investment in finance leases	$	3,944.7

Allowance for Credit Losses

Allowance for Credit Losses: The allowance for credit losses is summarized as follows:

	2020
	DEALER						CUSTOMER
	WHOLESALE			RETAIL			RETAIL			OTHER*			TOTAL**
Balance at January 1	$	4.3		$	9.2		$	101.4		$	3.7		$	118.6
Provision for losses		(1.0	)		(.8	)		30.1			.5			28.8
Charge-offs								(26.6	)		(1.4	)		(28.0	)
Recoveries								5.3			.4			5.7
Currency translation and other		.1						1.8						1.9
Balance at December 31	$	3.4			8.4		$	112.0		$	3.2		$	127.0

	2019
	DEALER						CUSTOMER
	WHOLESALE			RETAIL			RETAIL			OTHER*			TOTAL
Balance at January 1	$	6.8		$	10.0		$	93.8		$	3.2		$	113.8
Provision for losses		(1.6	)		(1.0	)		14.2			3.8			15.4
Charge-offs		(.6	)					(24.2	)		(3.6	)		(28.4	)
Recoveries								10.7			.3			11.0
Currency translation and other		(.3	)		.2			.7						.6
Balance at December 31	$	4.3		$	9.2		$	95.2		$	3.7		$	112.4

* Operating lease and other trade receivables.

**    The beginning balance has been adjusted for the adoption of ASU 2016-13.

	2018
	DEALER						CUSTOMER
	WHOLESALE			RETAIL			RETAIL			OTHER*			TOTAL
Balance at January 1	$	6.0		$	9.4		$	92.5		$	9.3		$	117.2
Provision for losses		1.0			.7			13.6			1.2			16.5
Charge-offs								(20.0	)		(7.5	)		(27.5	)
Recoveries								9.9			.4			10.3
Currency translation and other		(.2	)		(.1	)		(2.2	)		(.2	)		(2.7	)
Balance at December 31	$	6.8		$	10.0		$	93.8		$	3.2		$	113.8

* Operating lease and other trade receivables.

Finance Receivable Evaluated and Determined Individually and Collectively

Information regarding finance receivables evaluated and determined individually and collectively is as follows:

	DEALER				CUSTOMER
At December 31, 2020	WHOLESALE		RETAIL		RETAIL		TOTAL
Amortized cost basis for impaired finance    receivables evaluated individually			$	1.2	$	86.7	$	87.9
Allowance for impaired finance receivables    determined individually						5.6		5.6
Amortized cost basis for finance receivables    evaluated collectively	$	2,012.4		1,701.9		7,994.0		11,708.3
Allowance for finance receivables determined    collectively		3.4		8.4		106.4		118.2

	DEALER				CUSTOMER
At December 31, 2019	WHOLESALE		RETAIL		RETAIL		TOTAL
Amortized cost basis for impaired finance    receivables evaluated individually			$	2.3	$	47.6	$	49.9
Allowance for impaired finance receivables    determined individually						6.5		6.5
Amortized cost basis for finance receivables    evaluated collectively	$	2,907.4		1,643.3		7,455.2		12,005.9
Allowance for finance receivables determined    collectively		4.3		9.2		88.7		102.2

Amortized Cost Basis for Finance Receivables that are on Non-Accrual Status

The amortized cost basis for finance receivables that are on non-accrual status is as follows:

At December 31,	2020			2019
Dealer:
Retail	$	1.2	$	2.3
Customer retail:
Fleet		78.6		40.2
Owner/operator		8.1		7.2
	$	87.9	$	49.7

Amortized Cost Basis of Impaired Loans and Specific Reserve

The amortized cost basis of impaired loans as of December 31, 2020 and 2019 was not significantly different than the unpaid principal balance.

	DEALER			CUSTOMER RETAIL
At December 31, 2020	WHOLESALE	RETAIL		FLEET			OWNER/ OPERATOR			TOTAL
Impaired loans with a specific reserve				$	22.6		$	2.1		$	24.7
Associated allowance					(1.6	)		(.3	)		(1.9	)
					21.0			1.8			22.8
Impaired loans with no specific reserve		$	1.2								1.2
Net carrying amount of impaired loans		$	1.2	$	21.0		$	1.8		$	24.0
Average amortized cost basis		$	1.6	$	26.5		$	2.8		$	30.9

	DEALER				CUSTOMER RETAIL
At December 31, 2019	WHOLESALE		RETAIL		FLEET			OWNER/ OPERATOR			TOTAL
Impaired loans with a specific reserve					$	10.9		$	3.1		$	14.0
Associated allowance						(2.1	)		(.6	)		(2.7	)
						8.8			2.5			11.3
Impaired loans with no specific reserve			$	2.3		6.7			.4			9.4
Net carrying amount of impaired loans			$	2.3	$	15.5		$	2.9		$	20.7
Average amortized cost basis	$	4.9	$	2.4	$	16.6		$	3.4		$	27.3

Interest Income Recognized on Cash Basis

During the period the loans above were considered impaired, interest income recognized on a cash basis was as follows:

Year Ended December 31,	2020		2019		2018
Dealer:
Retail	$	.2	$	.2
Customer retail:
Fleet		1.5		1.3	$	2.0
Owner/operator		.2		.2		.2
	$	1.9	$	1.7	$	2.2

Amortized Cost Basis of Finance Receivables by Credit Quality Indicator and Portfolio Class

The table below summarizes the amortized cost basis of the Company’s finance receivables within each credit quality indicator by year of origination and portfolio class.  

	Revolving
At December 31, 2020	Loans		2020		2019		2018		2017		2016		Prior		Total
Dealer:
Wholesale:
Performing	$	2,004.5													$	2,004.5
Watch		7.9														7.9
	$	2,012.4													$	2,012.4
Retail:
Performing	$	20.7	$	504.2	$	474.9	$	268.0	$	180.1	$	100.4	$	132.0	$	1,680.3
Watch				5.2		10.5		4.5		1.4						21.6
At-risk												1.2				1.2
	$	20.7	$	509.4	$	485.4	$	272.5	$	181.5	$	101.6	$	132.0	$	1,703.1
Total Dealer	$	2,033.1	$	509.4	$	485.4	$	272.5	$	181.5	$	101.6	$	132.0	$	3,715.5
Customer Retail:
Fleet:
Performing			$	2,664.9	$	1,921.6	$	1,203.7	$	533.7	$	234.2	$	65.2	$	6,623.3
Watch				13.5		17.8		11.8		5.9		1.5		1.2		51.7
At-risk				8.0		37.0		18.2		12.2		2.4		.8		78.6
			$	2,686.4	$	1,976.4	$	1,233.7	$	551.8	$	238.1	$	67.2	$	6,753.6
Owner/Operator:
Performing			$	554.6	$	376.4	$	225.1	$	105.2	$	41.2	$	9.1	$	1,311.6
Watch				1.6		2.7		2.0		.7		.2		.2		7.4
At-risk				.9		2.1		3.2		1.2		.4		.3		8.1
			$	557.1	$	381.2	$	230.3	$	107.1	$	41.8	$	9.6	$	1,327.1
Total Customer Retail			$	3,243.5	$	2,357.6	$	1,464.0	$	658.9	$	279.9	$	76.8	$	8,080.7
Total	$	2,033.1	$	3,752.9	$	2,843.0	$	1,736.5	$	840.4	$	381.5	$	208.8	$	11,796.2

Finance Receivables by Aging Category

The tables below summarize the Company’s finance receivables by aging category. In determining past due status, the Company considers the entire contractual account balance past due when any installment is over 30 days past due. Substantially all customer accounts that were greater than 30 days past due prior to credit modification became current upon modification for aging purposes.

	DEALER				CUSTOMER RETAIL
At December 31, 2020	WHOLESALE		RETAIL		FLEET		OWNER/ OPERATOR		TOTAL
Current and up to 30 days past due	$	2,012.4	$	1,703.1	$	6,718.3	$	1,314.7	$	11,748.5
31 – 60 days past due						12.3		6.5		18.8
Greater than 60 days past due						23.0		5.9		28.9
	$	2,012.4	$	1,703.1	$	6,753.6	$	1,327.1	$	11,796.2

	DEALER				CUSTOMER RETAIL
At December 31, 2019	WHOLESALE		RETAIL		FLEET		OWNER/ OPERATOR		TOTAL
Current and up to 30 days past due	$	2,907.4	$	1,645.6	$	6,297.1	$	1,140.7	$	11,990.8
31 – 60 days past due						23.0		8.7		31.7
Greater than 60 days past due						27.6		5.7		33.3
	$	2,907.4	$	1,645.6	$	6,347.7	$	1,155.1	$	12,055.8

Pre- and Post-Modification Amortized Cost Basis Balances by Portfolio Class

At modification date, the pre-modification and post-modification amortized cost basis balances for finance receivables modified during the period by portfolio class were as follows:

	2020				2019
	AMORTIZED COST BASIS				AMORTIZED COST BASIS
	PRE-MODIFICATION		POST-MODIFICATION		PRE-MODIFICATION		POST-MODIFICATION
Fleet	$	72.5	$	72.5	$	2.2	$	2.2
Owner/operator		2.2		2.2		.3		.3
	$	74.7	$	74.7	$	2.5	$	2.5

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Equipment On Operating Leases (Tables)

12 Months Ended

Dec. 31, 2020

Lessor Disclosure [Abstract]

Equipment on Operating Leases for Truck Parts and Other Segment and for Financial Services Segment

A summary of equipment on operating leases for Truck, Parts and Other and for the Financial Services segment is presented below.

	TRUCK, PARTS AND OTHER						FINANCIAL SERVICES
At December 31,		2020			2019			2020			2019
Equipment on operating leases	$	576.8		$	706.3		$	4,493.9		$	4,350.0
Less allowance for depreciation		(154.9	)		(160.8	)		(1,331.1	)		(1,247.4	)
	$	421.9		$	545.5		$	3,162.8		$	3,102.6

Residual Value Obligation and Deferred Lease Revenue

These amounts are summarized below:

	TRUCK, PARTS AND OTHER
At December 31,		2020		2019
Residual value guarantees	$	358.4	$	439.6
Deferred lease revenues		99.0		147.7
	$	457.4	$	587.3

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Property, Plant And Equipment (Tables)

12 Months Ended

Dec. 31, 2020

Property Plant And Equipment [Abstract]

Property, Plant And Equipment

Property, plant and equipment include the following:

At December 31,	USEFUL LIVES	2020			2019
Land		$	286.4		$	271.8
Buildings and improvements	10 - 40 years		1,474.7			1,382.2
Machinery, equipment and production tooling	3 - 12 years		4,234.4			3,998.2
Construction in progress			1,081.8			741.7
			7,077.3			6,393.9
Less allowance for depreciation			(3,806.9	)		(3,510.1	)
		$	3,270.4		$	2,883.8

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Accounts Payable, Accrued Expenses and Other (Tables)

12 Months Ended

Dec. 31, 2020

Payables And Accruals [Abstract]

Accounts Payable, Accrued Expenses and Other

Accounts payable, accrued expenses and other include the following:

At December 31,	2020		2019
Truck, Parts and Other:
Accounts payable	$	1,176.2	$	1,115.7
Product support liabilities		514.6		508.1
Accrued expenses		446.5		467.4
Right-of-return liabilities		337.3		226.0
Accrued capital expenditures		288.8		270.3
Salaries and wages		260.8		271.8
Other		389.7		334.9
	$	3,413.9	$	3,194.2

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Product Support Liabilities (Tables)

12 Months Ended

Dec. 31, 2020

Product Warranties Disclosures [Abstract]

Changes in Product Support Liabilities, Warranty Reserves

WARRANTY RESERVES	2020			2019			2018
Balance at January 1	$	440.0		$	380.2		$	298.8
Cost accruals		295.0			386.3			331.9
Payments		(437.2	)		(343.7	)		(271.8	)
Change in estimates for pre-existing warranties		84.1			19.8			25.6
Currency translation and other		7.8			(2.6	)		(4.3	)
Balance at December 31	$	389.7		$	440.0		$	380.2

Changes in Deferred Revenues on Extended Warranties and R&M Contracts

DEFERRED REVENUES ON EXTENDED WARRANTIES AND R&M CONTRACTS	2020			2019			2018
Balance at January 1	$	801.4		$	699.9		$	653.9
Deferred revenues		409.9			499.1			448.2
Revenues recognized		(438.9	)		(396.4	)		(385.0	)
Currency translation		23.4			(1.2	)		(17.2	)
Balance at December 31	$	795.8		$	801.4		$	699.9

Product Support Liabilities

Product support liabilities are included in the accompanying Consolidated Balance Sheets as follows:

	WARRANTY RESERVES				DEFERRED REVENUES
At December 31,		2020		2019		2020		2019
Truck, Parts and Other:
Accounts payable, accrued expenses and other	$	245.6	$	270.6	$	269.0	$	237.5
Other liabilities		144.1		169.4		513.1		547.6
Financial Services:
Accounts payable, accrued expenses and other						5.7		6.8
Deferred taxes and other liabilities						8.0		9.5
	$	389.7	$	440.0	$	795.8	$	801.4

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Borrowings And Credit Arrangements (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Financial Services Borrowings

Financial Services borrowings include the following:

At December 31,	2020					2019
	EFFECTIVE					EFFECTIVE
	RATE			BORROWINGS		RATE			BORROWINGS
Commercial paper		.4	%	$	3,113.5		1.5	%	$	3,797.2
Bank loans		5.9	%		230.9		7.1	%		313.0
					3,344.4					4,110.2
Term notes		1.7	%		7,508.9		1.9	%		7,112.5
		1.4	%	$	10,853.3		1.9	%	$	11,222.7

Annual Maturities of Financial Services Borrowings

The annual maturities of the Financial Services borrowings are as follows:

	COMMERCIAL		BANK		TERM
Beginning January 1,	PAPER		LOANS		NOTES		TOTAL
2021	$	3,114.2	$	40.1	$	2,241.7	$	5,396.0
2022				121.6		2,231.9		2,353.5
2023				19.0		2,231.9		2,250.9
2024				25.1		415.4		440.5
2025				25.1		400.0		425.1
	$	3,114.2	$	230.9	$	7,520.9	$	10,866.0

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Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Schedule of Components of Lease Expense

The components of lease expense were as follows:

Year Ended December 31,	2020		2019
Finance lease cost
Amortization of right-of-use assets	$	.9	$	.9
Interest on lease liabilities		.1		.1
Operating lease cost		16.6		16.9
Short-term lease cost		.8		.7
Variable lease cost		1.7		1.8
Total lease cost	$	20.1	$	20.4

Schedule of Balance Sheet Information Related to Leases

Balance sheet information related to leases was as follows:

At December 31,	2020				2019
	OPERATING LEASES		FINANCE LEASES		OPERATING LEASES		FINANCE LEASES
TRUCK, PARTS AND OTHER:
Other noncurrent assets	$	30.9	$	1.0	$	31.7	$	1.1
FINANCIAL SERVICES:
Other assets		9.0				5.2
Total right-of-use assets	$	39.9	$	1.0	$	36.9	$	1.1
TRUCK, PARTS AND OTHER:
Accounts payable, accrued expenses and other	$	11.4	$	.5	$	13.0	$	.7
Other liabilities		20.3		.5		19.5		.5
FINANCIAL SERVICES:
Accounts payable, accrued expenses and other		2.0				1.5
Deferred taxes and other liabilities		6.6				3.7
Total lease liabilities	$	40.3	$	1.0	$	37.7	$	1.2

Schedule of Weighted-Average Remaining Lease Term and Discount Rate

The weighted-average remaining lease term and discount rate are as follows at December 31:

	2020						2019
	OPERATING LEASES			FINANCE LEASES			OPERATING LEASES			FINANCE LEASES
Weighted-average remaining lease term	5.7 years			2.3 years			5.1 years			2.2 years
Weighted-average discount rate		1.4	%		2.5	%		1.9	%		4.0	%

Schedule of Maturities of Lease Liabilities

Maturities of lease liabilities are as follows:

Beginning January 1,	OPERATING LEASES			FINANCE LEASES
2021	$	13.7		$	.6
2022		10.6			.2
2023		5.8			.2
2024		3.2			.1
2025		2.4
Thereafter		6.0
Total lease payments		41.7			1.1
Less: interest		(1.4	)		(.1	)
Total lease liabilities	$	40.3		$	1.0

Schedule of Cash Flow Information Related to Leases

Cash flow information related to leases was as follows:

Year Ended December 31,	2020		2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	17.2	$	17.0
Operating cash flows from finance leases		.1		.2
Financing cash flows from finance leases		.9		1.0
Right-of-use assets obtained in exchange for lease liabilities
Operating leases		19.9		8.9
Finance leases		.5		.7

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Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2020

Compensation And Retirement Disclosure [Abstract]

Allocation of Plan Assets by Investment

The following information details the allocation of plan assets by investment type. See Note Q for definitions of fair value levels.

		FAIR VALUE HIERARCHY
At December 31, 2020	TARGET	LEVEL 1		LEVEL 2		TOTAL		MEASURED AT NAV		TOTAL
Equities:
U.S. equities								$	1,047.0	$	1,047.0
Global equities									1,140.6		1,140.6
Total equities	50 - 70%								2,187.6		2,187.6
Fixed income:
U.S. fixed income		$	83.9	$	296.0	$	379.9	$	719.9	$	1,099.8
Non-U.S. fixed income					30.4		30.4		372.8		403.2
Total fixed income	30 - 50%		83.9		326.4		410.3		1,092.7		1,503.0
Cash and other			2.6		99.8		102.4		.4		102.8
Total plan assets		$	86.5	$	426.2	$	512.7	$	3,280.7	$	3,793.4

		FAIR VALUE HIERARCHY
At December 31, 2019	TARGET	LEVEL 1		LEVEL 2		TOTAL		MEASURED AT NAV		TOTAL
Equities:
U.S. equities								$	860.1	$	860.1
Global equities									973.1		973.1
Total equities	50 - 70%								1,833.2		1,833.2
Fixed income:
U.S. fixed income		$	90.6	$	260.3	$	350.9	$	611.7	$	962.6
Non-U.S. fixed income					28.1		28.1		322.0		350.1
Total fixed income	30 - 50%		90.6		288.4		379.0		933.7		1,312.7
Cash and other			10.6		68.2		78.8		1.7		80.5
Total plan assets		$	101.2	$	356.6	$	457.8	$	2,768.6	$	3,226.4

Weighted Average Assumptions of Pension Plans

The following weighted average assumptions relate to all pension plans of the Company:

At December 31,	2020			2019
Discount rate		2.2	%		2.9	%
Rate of increase in future compensation levels		3.7	%		3.8	%
Assumed long-term rate of return on plan assets		6.2	%		6.3	%

Components of Change in Projected Benefit Obligation and Change in Plan Assets

The components of the change in projected benefit obligation and change in plan assets are as follows:

At December 31,	2020			2019
Change in projected benefit obligation:
Benefit obligation at January 1	$	3,234.4		$	2,655.4
Service cost		130.4			102.0
Interest cost		83.0			95.6
Benefits paid		(120.2	)		(127.0	)
Actuarial loss		379.5			478.0
Currency translation and other		54.4			30.0
Participant contributions		.4			.4
Projected benefit obligation at December 31	$	3,761.9		$	3,234.4
Change in plan assets:
Fair value of plan assets at January 1	$	3,226.4		$	2,699.2
Employer contributions		184.9			35.7
Actual return on plan assets		453.4			588.1
Benefits paid		(120.2	)		(127.0	)
Currency translation and other		48.5			30.0
Participant contributions		.4			.4
Fair value of plan assets at December 31	$	3,793.4		$	3,226.4
Funded status at December 31	$	31.5		$	(8.0	)

Amounts Recorded on Balance Sheets

At December 31,	2020		2019
Amounts recorded on Balance Sheet:
Other noncurrent assets	$	222.1	$	146.5
Accounts payable, accrued expenses and other		25.5		39.9
Other liabilities		165.1		114.6
Accumulated other comprehensive loss:
Actuarial loss		571.7		512.5
Prior service cost		6.3		5.1
Net initial transition amount				.1

Information for Plans with Accumulated Benefit Obligation in Excess of Plan Assets

Information for all plans with an accumulated benefit obligation in excess of plan assets is as follows:

At December 31,	2020		2019
Projected benefit obligation	$	167.9	$	170.6
Accumulated benefit obligation		148.7		150.1
Fair value of plan assets		13.5		23.4

Components of Pension Expense

The components of pension expense are as follows:

Year Ended December 31,		2020			2019			2018
Service cost	$	130.4		$	102.0		$	108.3
Interest on projected benefit obligation		83.0			95.6			85.8
Expected return on assets		(190.6	)		(176.6	)		(177.2	)
Amortization of prior service costs		1.5			1.4			1.4
Recognized actuarial loss		44.2			20.5			35.3
Settlement loss		11.6
Net pension expense	$	80.1		$	42.9		$	53.6

Multi-employer Plans

The Company’s participation in the following multi-employer plans for the years ended December 31 are as follows:

		PENSION PLAN	COMPANY CONTRIBUTIONS
PENSION PLAN	EIN	NUMBER		2020		2019		2018
Metal and Electrical Engineering Industry Pension Fund		135668	$	33.9	$	27.8	$	27.9
Western Metal Industry Pension Plan	91-6033499	001		3.0		3.8		2.7
Other plans				.9		1.2		1.2
			$	37.8	$	32.8	$	31.8

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Components of Income Before Income Taxes

The components of the Company’s income before income taxes include the following:

Year Ended December 31,	2020		2019		2018
Domestic	$	1,122.9	$	2,201.1	$	1,775.2
Foreign		535.0		898.1		1,035.0
	$	1,657.9	$	3,099.2	$	2,810.2

Components of Provision for Income Taxes

The components of the Company’s provision for income taxes include the following:

Year Ended December 31,	2020			2019			2018
Current provision:
Federal	$	182.5		$	352.3		$	267.1
State		44.9			96.8			67.5
Foreign		132.6			191.4			263.0
		360.0			640.5			597.6
Deferred (benefit) provision:
Federal		(11.2	)		40.7			22.6
State		1.7			(4.3	)		1.3
Foreign		9.0			34.4			(6.4	)
		(.5	)		70.8			17.5
	$	359.5		$	711.3		$	615.1

Reconciliation of Statutory U.S Federal Tax Rate to Effective Income Tax Rate

A reconciliation of the statutory U.S. federal tax rate to the effective income tax rate is as follows:

	2020			2019			2018
Statutory rate		21.0	%		21.0	%		21.0	%
Effect of:
Transition tax								(.2	)
State		2.3			2.3			2.2
Research and development tax credit		(1.4	)		(.9	)		(.8	)
Tax on foreign earnings		.8			.9			1.0
Other, net		(1.0	)		(.3	)		(1.3	)
		21.7	%		23.0	%		21.9	%

Tax Effects of Temporary Differences Representing Deferred Tax Assets and Liabilities and Balance Sheet Classification

The tax effects of temporary differences representing deferred tax assets and liabilities are as follows:

At December 31,	2020			2019
Assets:
Accrued expenses	$	205.3		$	203.5
Net operating loss and tax credit carryforwards		140.1			132.0
Postretirement benefit plans					4.9
Allowance for losses on receivables		36.0			31.4
Goodwill and intangibles		10.0			18.7
Other		122.9			103.3
		514.3			493.8
Valuation allowance		(102.1	)		(118.5	)
		412.2			375.3
Liabilities:
Financial Services leasing depreciation		(765.1	)		(777.5	)
Depreciation and amortization		(168.0	)		(159.4	)
Postretirement benefit plans		(3.0	)
Other		(46.1	)		(28.9	)
		(982.2	)		(965.8	)
Net deferred tax liability	$	(570.0	)	$	(590.5	)

The balance sheet classifications of the Company’s deferred tax assets and liabilities are as follows:

At December 31,	2020			2019
Truck, Parts and Other:
Other noncurrent assets, net	$	90.4		$	115.4
Other liabilities		(3.5	)		(5.3	)
Financial Services:
Other assets		46.8			36.8
Deferred taxes and other liabilities		(703.7	)		(737.4	)
Net deferred tax liability	$	(570.0	)	$	(590.5	)

Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

	2020			2019		2018
Balance at January 1	$	30.7		$	21.2	$	22.9
Additions for tax positions related to the current year		5.5			6.5		11.2
Additions for tax positions related to prior years		.3			3.0
Reductions for tax positions related to prior years		(4.2	)
Reductions related to settlements							(5.7	)
Lapse of statute of limitations		(7.8	)				(7.2	)
Balance at December 31	$	24.5		$	30.7	$	21.2

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Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Changes in Accumulated Other Comprehensive Income (loss) by Component

The components of AOCI and the changes in AOCI, net of tax, included in the Consolidated Balance Sheets and the Consolidated Statements of Stockholders’ Equity, consisted of the following:

	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2020	$	(15.3	)	$	6.1		$	(517.7	)	$	(573.2	)	$	(1,100.1	)
Recorded into AOCI		(78.4	)		10.3			(104.0	)		115.6			(56.5	)
Reclassified out of AOCI		64.5			(1.8	)		43.6						106.3
Net other comprehensive (loss) income		(13.9	)		8.5			(60.4	)		115.6			49.8
Balance at December 31, 2020	$	(29.2	)	$	14.6		$	(578.1	)	$	(457.6	)	$	(1,050.3	)

	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2019	$	2.0		$	(2.3	)	$	(477.8	)	$	(620.4	)	$	(1,098.5	)
Recorded into AOCI		(57.0	)		8.7			(56.8	)		47.2			(57.9	)
Reclassified out of AOCI		39.7			(.3	)		16.9						56.3
Net other comprehensive (loss) income		(17.3	)		8.4			(39.9	)		47.2			(1.6	)
Balance at December 31, 2019	$	(15.3	)	$	6.1		$	(517.7	)	$	(573.2	)	$	(1,100.1	)

	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2018	$	1.2		$	(1.8	)	$	(375.6	)	$	(417.4	)	$	(793.6	)
Recorded into AOCI		90.9			.1			(86.8	)		(213.3	)		(209.1	)
Reclassified out of AOCI		(90.5	)		(.1	)		28.0						(62.6	)
Net other comprehensive income (loss)		.4						(58.8	)		(213.3	)		(271.7	)
Reclassifications to retained earnings in accordance with ASU 2018-02		.4			(.5	)		(43.4	)		10.3			(33.2	)
Balance at December 31, 2018	$	2.0		$	(2.3	)	$	(477.8	)	$	(620.4	)	$	(1,098.5	)

Reclassifications Out of Accumulated Other Comprehensive Income

Reclassifications out of AOCI during the years ended December 31, 2020, 2019 and 2018 were as follows:

		AMOUNT RECLASSIFIED OUT OF AOCI
AOCI COMPONENTS	LINE ITEM IN THE CONSOLIDATED STATEMENTS OF INCOME	2020			2019			2018
Unrealized (gains) and losses on    derivative contracts:
Truck, Parts and Other
Foreign-exchange contracts	Net sales and revenues	$	(4.0	)	$	21.2		$	5.4
	Cost of sales and revenues		1.7			(4.1	)		(6.6	)
	Interest and other (income), net		(4.6	)		2.1			(1.6	)
Financial Services
Interest-rate contracts	Interest and other borrowing expenses		94.5			32.5			(118.7	)
	Pre-tax expense increase (reduction)		87.6			51.7			(121.5	)
	Tax (benefit) expense		(23.1	)		(12.0	)		31.0
	After-tax expense increase (reduction)		64.5			39.7			(90.5	)
Unrealized gains on marketable debt securities:
Marketable debt securities	Investment income		(2.4	)		(.4	)		(.2	)
	Tax expense		.6			.1			.1
	After-tax income increase		(1.8	)		(.3	)		(.1	)
Unrealized losses on pension plans:
Truck, Parts and Other
Actuarial loss	Interest and other (income), net		44.2			20.5			35.3
Prior service costs	Interest and other (income), net		1.5			1.4			1.4
Settlement loss	Interest and other (income), net		11.6
	Pre-tax expense increase		57.3			21.9			36.7
	Tax benefit		(13.7	)		(5.0	)		(8.7	)
	After-tax expense increase		43.6			16.9			28.0
Total reclassifications out of AOCI		$	106.3		$	56.3		$	(62.6	)

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Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2020

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Balance Sheet Classifications, Fair Value, Gross and Pro-Forma Net Amounts of Derivative Financial Instruments

The following table presents the balance sheet classification, fair value, gross and pro forma net amounts of derivative financial instruments:

At December 31,	2020						2019
	ASSETS			LIABILITIES			ASSETS			LIABILITIES
Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets	$	16.4					$	45.8
Deferred taxes and other liabilities				$	116.1					$	31.0
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets		2.7						10.1
Accounts payable, accrued expenses and other					35.9						9.2
Financial Services:
Deferred taxes and other liabilities					1.2
	$	19.1		$	153.2		$	55.9		$	40.2
Derivatives not designated as hedging instruments:
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets	$	1.1					$	.4
Accounts payable, accrued expenses and other				$	3.3					$	1.8
Financial Services:
Other assets		.3
Deferred taxes and other liabilities					3.4						2.3
	$	1.4		$	6.7		$	.4		$	4.1
Gross amounts recognized in Balance Sheet	$	20.5		$	159.9		$	56.3		$	44.3
Less amounts not offset in financial instruments:
Truck, Parts and Other:
Foreign-exchange contracts		(2.1	)		(2.1	)		(.4	)		(.4	)
Financial Services:
Interest-rate contracts		(12.0	)		(12.0	)		(8.6	)		(8.6	)
Pro forma net amount	$	6.4		$	145.8		$	47.3		$	35.3

Amount of (Gain) Loss from Derivative Financial Instruments Reclassified from AOCI into Consolidated Statements of Income

The following table presents the amount of (gain) loss from derivative financial instruments reclassified from AOCI into the Consolidated Statements of Income:

Year Ended December 31,		2020			2019			2018
Truck, Parts and Other:
Cash flow hedges	$	(6.9	)	$	19.2		$	(2.8	)
Net investment hedge		(5.6	)		(4.6	)
Total	$	(12.5	)	$	14.6		$	(2.8	)
Financial Services:
Fair value hedges		1.1			1.5			1.8
Cash flow hedges		94.5			32.5			(118.7	)
Total	$	95.6		$	34.0		$	(116.9	)

Amounts Related to Cumulative Basis Adjustments for Fair Value Hedges

The following table presents the amounts recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:

At December 31,	2020			2019
Financial Services
Term notes:
Carrying amount of hedged liabilities	$	90.9		$	90.5
Cumulative basis adjustment included in the carrying amount		(.9	)		(.5	)

Pre-Tax Effects of (Loss) Gain Derivative Instruments Recognized in OCI

The following table presents the pre-tax effects of (loss) gain on cash flow hedges recognized in other comprehensive income (loss) (OCI):

Year Ended December 31,	2020						2019						2018
	INTEREST-			FOREIGN-			INTEREST-			FOREIGN-			INTEREST-		FOREIGN-
	RATE			EXCHANGE			RATE			EXCHANGE			RATE		EXCHANGE
	CONTRACTS			CONTRACTS			CONTRACTS			CONTRACTS			CONTRACTS		CONTRACTS
(Loss) gain recognized in OCI:
Truck, Parts and Other				$	2.8					$	(31.7	)			$	4.5
Financial Services	$	(107.3	)		(.8	)	$	(44.4	)				$	117.1
	$	(107.3	)	$	2.0		$	(44.4	)	$	(31.7	)	$	117.1	$	4.5

(Gain) Loss Recognized in Earnings to Derivatives not Designated as Hedging Instruments

The loss (gain) recognized in earnings related to derivatives not designated as hedging instruments was as follows:

Year Ended December 31,	2020			2019				2018
	INTEREST-	FOREIGN-		INTEREST-	FOREIGN-			INTEREST-	FOREIGN-
	RATE	EXCHANGE		RATE	EXCHANGE			RATE	EXCHANGE
	CONTRACTS	CONTRACTS		CONTRACTS	CONTRACTS			CONTRACTS	CONTRACTS
Truck, Parts and Other:
Cost of sales and revenues		$	.7		$	.5			$	(.3	)
Interest and other (income), net			2.3			5.4				6.9
Financial Services:
Interest and other borrowing expenses			9.4			(10.1	)			(14.9	)
Selling, general and administrative			.8			.1				1.7
		$	13.2		$	(4.1	)		$	(6.6	)

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Subject to Recurring Fair Value Measurements

The Company’s assets and liabilities subject to recurring fair value measurements are either Level 1 or Level 2 as follows:

At December 31, 2020	LEVEL 1		LEVEL 2		TOTAL
Assets:
Marketable debt securities
U.S. tax-exempt securities			$	392.4	$	392.4
U.S. corporate securities				232.9		232.9
U.S. government and agency securities	$	86.5		7.9		94.4
Non-U.S. corporate securities				411.5		411.5
Non-U.S. government securities				77.5		77.5
Other debt securities				220.3		220.3
Total marketable debt securities	$	86.5	$	1,342.5	$	1,429.0
Derivatives
Cross currency swaps			$	14.8	$	14.8
Interest-rate swaps				1.6		1.6
Foreign-exchange contracts				4.1		4.1
Total derivative assets			$	20.5	$	20.5
Liabilities:
Derivatives
Cross currency swaps			$	77.6	$	77.6
Interest-rate swaps				38.5		38.5
Foreign-exchange contracts				43.8		43.8
Total derivative liabilities			$	159.9	$	159.9

At December 31, 2019	LEVEL 1		LEVEL 2		TOTAL
Assets:
Marketable debt securities
U.S. tax-exempt securities			$	320.2	$	320.2
U.S. corporate securities				165.7		165.7
U.S. government and agency securities	$	128.4		.9		129.3
Non-U.S. corporate securities				349.8		349.8
Non-U.S. government securities				72.4		72.4
Other debt securities				124.7		124.7
Total marketable debt securities	$	128.4	$	1,033.7	$	1,162.1
Derivatives
Cross currency swaps			$	43.8	$	43.8
Interest-rate swaps				2.0		2.0
Foreign-exchange contracts				10.5		10.5
Total derivative assets			$	56.3	$	56.3
Liabilities:
Derivatives
Cross currency swaps			$	13.5	$	13.5
Interest-rate swaps				17.5		17.5
Foreign-exchange contracts				13.3		13.3
Total derivative liabilities			$	44.3	$	44.3

Carrying Amount and Fair Value of Financial Services Fixed-Rate Loans and Fixed-Rate Debt

The Company’s estimate of fair value for fixed rate loans and debt that are not carried at fair value was as follows:

At December 31,	2020				2019
	CARRYING		FAIR		CARRYING		FAIR
	AMOUNT		VALUE		AMOUNT		VALUE
Assets:
Financial Services fixed rate loans	$	5,319.2	$	5,429.5	$	4,914.4	$	4,992.2
Liabilities:
Financial Services fixed rate debt		6,482.0		6,648.6		5,925.9		5,990.7

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Stock Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Assumptions Used in Determining Fair Value of Option Awards

The assumptions used in determining the fair value of the option awards for each of the grant years are as follows:

		2020			2019			2018
Risk-free interest rate		1.54	%		2.55	%		2.64	%
Expected volatility		23	%		23	%		23	%
Expected dividend yield		4.1	%		4.9	%		3.8	%
Expected term	6 years			6 years			6 years
Weighted average grant date fair value of options per share	$	10.02		$	8.26		$	10.67

Activity Under Company's Stock Plans

A summary of activity under the Company’s stock plans is presented below:

		2020		2019		2018
Intrinsic value of options exercised	$	26.9	$	31.9	$	13.4
Cash received from stock option exercises		53.8		60.9		19.7
Tax benefit related to stock award exercises		3.8		3.8		2.4
Stock-based compensation		13.0		15.1		13.2
Tax benefit related to stock-based compensation		1.6		1.9		1.9

Stock Option Activity

The summary of options as of December 31, 2020 and changes during the year then ended are presented below:

				PER SHARE		REMAINING		AGGREGATE
	NUMBER			EXERCISE		CONTRACTUAL		INTRINSIC
	OF SHARES			PRICE*		LIFE IN YEARS*		VALUE
Options outstanding at January 1		3,488,300		$	60.18
Granted		641,700			76.18
Exercised		(949,900	)		56.68
Cancelled		(63,600	)		69.75
Options outstanding at December 31		3,116,500		$	64.34		6.48	$	68.4
Vested and expected to vest		3,014,300		$	64.06		6.40	$	67.0
Exercisable		1,323,200		$	56.63		4.15	$	39.2

* Weighted Average

Nonvested Restricted Shares Activity

The summary of nonvested restricted shares as of December 31, 2020 and changes during the year then ended is presented below:

	NUMBER			GRANT DATE
NONVESTED SHARES	OF SHARES			FAIR VALUE*
Nonvested awards outstanding at January 1		150,500		$	65.92
Granted		94,400			76.78
Vested		(96,700	)		69.46
Forfeited		(5,800	)		71.47
Nonvested awards outstanding at December 31		142,400		$	70.49

* Weighted Average

Dilutive and Antidilutive Options

The dilutive and antidilutive options are shown separately in the table below:

Year Ended December 31,	2020	2019	2018
Additional shares	607,800	621,300	785,100
Antidilutive options	686,100	1,489,400	1,176,600

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Segment and Related Information (Tables)

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Geographic Area Data

Geographic Area Data		2020		2019		2018
Net sales and revenues:
United States	$	10,526.6	$	15,119.3	$	13,165.7
Europe		4,871.2		6,104.7		6,071.9
Other		3,330.7		4,375.7		4,258.1
	$	18,728.5	$	25,599.7	$	23,495.7
Property, plant and equipment, net:
United States	$	1,633.0	$	1,556.4	$	1,353.8
Belgium		596.2		395.7		237.4
The Netherlands		499.0		399.8		397.8
Other		542.2		531.9		491.9
	$	3,270.4	$	2,883.8	$	2,480.9
Equipment on operating leases, net:
United States	$	1,219.0	$	1,390.1	$	1,405.1
Poland		359.4		343.5		327.8
France		349.7		315.0		246.8
Germany		346.4		358.3		361.0
Spain		310.8		276.1		249.8
Mexico		302.3		320.5		306.4
United Kingdom		125.4		113.6		130.3
Other		571.7		531.0		614.4
	$	3,584.7	$	3,648.1	$	3,641.6

Segment Reporting Information by Segment

Business Segment Data		2020			2019			2018
Net sales and revenues:
Truck	$	13,643.0		$	20,403.5		$	18,863.1
Less intersegment		(478.2	)		(414.0	)		(676.1	)
External customers		13,164.8			19,989.5			18,187.0
Parts		3,962.7			4,073.1			3,896.2
Less intersegment		(49.8	)		(48.2	)		(57.3	)
External customers		3,912.9			4,024.9			3,838.9
Other		76.6			105.3			112.7
		17,154.3			24,119.7			22,138.6
Financial Services		1,574.2			1,480.0			1,357.1
	$	18,728.5		$	25,599.7		$	23,495.7
Income (loss) before income taxes:
Truck	$	581.4		$	1,904.9		$	1,672.1
Parts		799.3			830.8			768.6
Other		18.2			(17.7	)		2.7
		1,398.9			2,718.0			2,443.4
Financial Services		223.1			298.9			305.9
Investment income		35.9			82.3			60.9
	$	1,657.9		$	3,099.2		$	2,810.2
Depreciation and amortization:
Truck	$	292.2		$	381.9		$	406.2
Parts		10.8			10.2			9.2
Other		20.8			20.3			18.4
		323.8			412.4			433.8
Financial Services		725.2			664.9			620.3
	$	1,049.0		$	1,077.3		$	1,054.1
Expenditures for long-lived assets:
Truck	$	556.0		$	664.9		$	778.5
Parts		18.4			46.2			29.4
Other		36.4			51.0			38.8
		610.8			762.1			846.7
Financial Services		1,046.7			1,378.6			1,085.1
	$	1,657.5		$	2,140.7		$	1,931.8
Segment assets:
Truck	$	5,971.9		$	5,609.0		$	5,347.3
Parts		1,255.6			1,172.1			1,090.9
Other		398.7			339.2			345.0
Cash and marketable securities		4,834.0			5,169.4			4,299.6
		12,460.2			12,289.7			11,082.8
Financial Services		15,799.8			16,071.4			14,399.6
	$	28,260.0		$	28,361.1		$	25,482.4

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Quarterly Results (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results (Unaudited)

	QUARTER
	FIRST		SECOND		THIRD		FOURTH
	(millions, except per share data)
2020
Truck, Parts and Other:
Net sales and revenues	$	4,778.0	$	2,701.9	$	4,538.4	$	5,136.0
Cost of sales and revenues		4,189.6		2,441.5		3,958.3		4,487.0
Research and development		71.0		66.5		64.7		71.7
Financial Services:
Revenues		383.7		360.3		397.6		432.6
Interest and other borrowing expenses		56.4		46.9		45.2		43.6
Depreciation and other expenses		229.4		224.1		262.5		292.0
Net Income		359.4		147.7		385.5		405.8
Net Income Per Share:*
Basic	$	1.04	$	.43	$	1.11	$	1.17
Diluted		1.03		.43		1.11		1.17

2019
Truck, Parts and Other:
Net sales and revenues	$	6,138.1	$	6,266.5	$	6,004.2	$	5,710.9
Cost of sales and revenues		5,217.1		5,341.7		5,106.8		4,890.0
Research and development		78.3		82.5		82.2		83.6
Financial Services:
Revenues		349.5		361.4		362.8		406.3
Interest and other borrowing expenses		53.4		60.0		59.6		57.5
Depreciation and other expenses		177.4		183.6		195.3		241.9
Net Income		629.0		619.7		607.9		531.3
Net Income Per Share:
Basic	$	1.81	$	1.79	$	1.75	$	1.53
Diluted		1.81		1.78		1.75		1.53

* The sum of quarterly per share amounts may not equal per share amounts reported for year-to-date periods. This is due to changes in the number of weighted shares outstanding and the effects of rounding for each period.

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Significant Accounting Policies - Additional Information (Detail)	3 Months Ended								12 Months Ended
	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) Segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Accounting Policies [Abstract]
Reportable segments | Segment									3
Term used to calculate historical weighted average return rate									7 years
Estimated value of trucks to be returned	$ 627,900,000				$ 473,000,000.0				$ 627,900,000	$ 473,000,000.0
Estimated sales returned liabilities									664,100,000	503,400,000
Payment to acquire commitment value									1,184,700,000
Deferred revenue	795,800,000				801,400,000				795,800,000	801,400,000
Estimated value of returned goods	62,200,000				56,300,000				$ 62,200,000	56,300,000
Liquid investments maturity period									90 days
Goodwill	118,800,000				109,100,000				$ 118,800,000	109,100,000
Derivative assets	$ 20,500,000				56,300,000				$ 20,500,000	56,300,000
ASU 2016-13
Accounting Policies [Abstract]
Change in accounting principle, accounting standards update, adopted [true false]	true								true
Change in accounting principle, accounting standards update adoption date	Jan. 01, 2020								Jan. 01, 2020
ASU 2020-04
Accounting Policies [Abstract]
Change in accounting principle, accounting standards update, adopted [true false]	true								true
Change in accounting principle, accounting standards update adoption date	Oct. 01, 2020								Oct. 01, 2020
Change in accounting principle, accounting standards update, immaterial effect [true false]	true								true
ASU 2018-13
Accounting Policies [Abstract]
Change in accounting principle, accounting standards update, adopted [true false]	true								true
Change in accounting principle, accounting standards update adoption date	Jan. 01, 2020								Jan. 01, 2020
Change in accounting principle, accounting standards update, immaterial effect [true false]	true								true
ASU 2018-15
Accounting Policies [Abstract]
Change in accounting principle, accounting standards update, adopted [true false]	true								true
Change in accounting principle, accounting standards update adoption date	Jan. 01, 2020								Jan. 01, 2020
Change in accounting principle, accounting standards update, immaterial effect [true false]	true								true
ASU 2019-12
Accounting Policies [Abstract]
Change in accounting principle, accounting standards update, adopted [true false]	true								true
Change in accounting principle, accounting standards update adoption date	Jan. 01, 2020								Jan. 01, 2020
Change in accounting principle, accounting standards update, immaterial effect [true false]	true								true
ASU 2018-14
Accounting Policies [Abstract]
Change in accounting principle, accounting standards update adoption date	Jan. 01, 2021								Jan. 01, 2021
Change in accounting principle, accounting standards update, immaterial effect [true false]	true								true
Designated under hedge accounting
Accounting Policies [Abstract]
Derivative assets	$ 19,100,000				55,900,000				$ 19,100,000	55,900,000
Designated under hedge accounting | Interest-Rate Contracts | Other Assets
Accounting Policies [Abstract]
Derivative assets	20,500,000								20,500,000
Trade Receivables
Accounting Policies [Abstract]
Trade and other receivables, net	942,700,000				1,055,000,000.0				942,700,000	1,055,000,000.0
Other Receivables
Accounting Policies [Abstract]
Trade and other receivables, net	254,800,000				251,100,000				254,800,000	251,100,000
Financial Services
Accounting Policies [Abstract]
Total operating lease income									802,300,000	798,200,000
Depreciation and other expenses	292,000,000.0	$ 262,500,000	$ 224,100,000	$ 229,400,000	241,900,000	$ 195,300,000	$ 183,600,000	$ 177,400,000
Financing receivable, recorded investment, 90 days past due and still accruing	0				0				$ 0	$ 0
Months contractual terms extended									3 months	5 months
Financial Services | Designated under hedge accounting | Interest-Rate Contracts | Other Assets
Accounting Policies [Abstract]
Derivative assets	16,400,000				45,800,000				$ 16,400,000	$ 45,800,000
Financial Services | Operating Lease
Accounting Policies [Abstract]
Total operating lease income									802,300,000	798,200,000	$ 797,100,000
Depreciation and other expenses									776,500,000	721,600,000	$ 686,900,000
Truck, Parts and Other
Accounting Policies [Abstract]
Sales returns liabilities in estimated returns	337,300,000				226,000,000.0				337,300,000	226,000,000.0
Trade and other receivables, net	1,197,500,000				1,306,100,000				$ 1,197,500,000	$ 1,306,100,000
Trade receivable days outstanding considered past due									30 days	30 days	30 days
Allowance for credit losses for Truck, Parts and Other	600,000				600,000				$ 600,000	$ 600,000
Net charge-offs									$ 0	300,000	$ 100,000
Engines manufactured by PACCAR
Accounting Policies [Abstract]
Warranty period									2 years
Trucks | Truck Sales
Accounting Policies [Abstract]
Total operating lease income									$ 104,200,000	159,700,000	$ 152,600,000
Parts Subsegment
Accounting Policies [Abstract]
Sales returns liabilities in estimated returns	$ 142,000,000.0				$ 126,300,000				$ 142,000,000.0	$ 126,300,000
Maximum
Accounting Policies [Abstract]
Warranty period									5 years
Lease and guarantee periods (in years)									5 years
Estimated useful lives of equipment									10 years
Maximum | Financial Services
Accounting Policies [Abstract]
Operating lease term	5 years								5 years
Maximum | Financial Services | Loans and Leases
Accounting Policies [Abstract]
Contractual terms of retails loans and finance leases									5 years
Maximum | Trucks | Financial Services
Accounting Policies [Abstract]
Finance leases, lease term									5 years
Minimum
Accounting Policies [Abstract]
Warranty period									1 year
Lease and guarantee periods (in years)									3 years
Estimated useful lives of equipment									3 years
Minimum | Financial Services
Accounting Policies [Abstract]
Operating lease term	3 years								3 years
Minimum | Financial Services | Loans and Leases
Accounting Policies [Abstract]
Contractual terms of retails loans and finance leases									3 years
Minimum | Trucks | Financial Services
Accounting Policies [Abstract]
Finance leases, lease term									3 years

XML

Summary of Cumulative Effect of the Changes Made for the Adoption of ASU 2016-13 (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Jan. 01, 2020	Dec. 31, 2019
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Retained earnings	$ 11,005.2		$ 10,398.5
Financial Services
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Finance and other receivables, net	11,820.7	$ 12,079.8	12,086.0
Other assets	681.7	715.1	715.0
Deferred taxes and other liabilities	$ 854.6	788.7	790.2
Retained earnings		10,393.9	$ 10,398.5
Financial Services | ASU 2016-13 | Adjustments
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Finance and other receivables, net		(6.2)
Other assets		0.1
Deferred taxes and other liabilities		(1.5)
Retained earnings		$ (4.6)

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Schedule of Revenues by Major Sources (Detail) - Truck, Parts and Other - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Entity Wide Information Revenue From External Customer [Line Items]
Total sales and revenues	$ 5,136.0	$ 4,538.4	$ 2,701.9	$ 4,778.0	$ 5,710.9	$ 6,004.2	$ 6,266.5	$ 6,138.1	$ 17,154.3	$ 24,119.7
Trucks
Entity Wide Information Revenue From External Customer [Line Items]
Total sales and revenues									13,164.8	19,989.5
Trucks | Truck Sales
Entity Wide Information Revenue From External Customer [Line Items]
Total sales and revenues									12,466.9	19,225.2
Trucks | Revenues from extended warranties, operating leases and other
Entity Wide Information Revenue From External Customer [Line Items]
Total sales and revenues									697.9	764.3
Parts Subsegment
Entity Wide Information Revenue From External Customer [Line Items]
Total sales and revenues									3,912.9	4,024.9
Parts Subsegment | Parts
Entity Wide Information Revenue From External Customer [Line Items]
Total sales and revenues									3,803.3	3,912.1
Parts Subsegment | Revenues from dealer services and other
Entity Wide Information Revenue From External Customer [Line Items]
Total sales and revenues									109.6	112.8
Winch Sales and Other
Entity Wide Information Revenue From External Customer [Line Items]
Total sales and revenues									$ 76.6	$ 105.3

XML

Summary of Financial Services Lease Revenues by Lease Type (Detail) - Financial Services - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Entity Wide Information Revenue From External Customer [Line Items]
Finance lease revenues	$ 189.2	$ 199.7
Operating lease revenues	802.3	798.2
Total lease revenues	$ 991.5	$ 997.9

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Marketable Debt Securities (Detail) - Truck, Parts and Other - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 1,409.7	$ 1,154.0
Unrealized Gains	19.4	8.6
Unrealized Losses	0.1	0.5
Fair Value	1,429.0	1,162.1
U.S. tax-exempt securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	388.1	318.1
Unrealized Gains	4.4	2.2
Unrealized Losses	0.1	0.1
Fair Value	392.4	320.2
U.S. corporate securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	229.6	163.8
Unrealized Gains	3.3	1.9
Fair Value	232.9	165.7
U.S. government and agency securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	92.1	128.4
Unrealized Gains	2.3	0.9
Fair Value	94.4	129.3
Non-U.S. corporate securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	406.0	347.7
Unrealized Gains	5.5	2.3
Unrealized Losses		0.2
Fair Value	411.5	349.8
Non-U.S. government securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	77.0	72.3
Unrealized Gains	0.5	0.2
Unrealized Losses		0.1
Fair Value	77.5	72.4
Other debt securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	216.9	123.7
Unrealized Gains	3.4	1.1
Unrealized Losses		0.1
Fair Value	$ 220.3	$ 124.7

XML

Investments in Marketable Debt Securities - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Schedule Of Available For Sale Securities [Line Items]
Allowance for credit losses	$ 0	$ 0
VRDOs
Schedule Of Available For Sale Securities [Line Items]
Marketable debt securities	0	49,700,000
Truck, Parts and Other
Schedule Of Available For Sale Securities [Line Items]
Gross realized gains from sales of marketable debt securities	2,700,000	1,300,000	$ 1,100,000
Gross realized loss from sales of marketable debt securities	300,000	400,000	$ 800,000
Allowance for credit losses	0	0
Marketable debt securities	$ 1,429,000,000.0	$ 1,162,100,000

XML

Marketable Debt Securities Continuous Unrealized Losses (Detail) - Truck, Parts and Other - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Schedule Of Available For Sale Securities [Line Items]
Less than 12 Months Fair Value	$ 81.1	$ 177.0
Less than 12 Months Unrealized Losses	0.1	0.4
12 Months or Greater Fair value	$ 1.3	31.4
12 Months or Greater Unrealized losses		$ 0.1

XML

Contractual Maturities of Marketable Debt Securities (Detail) - Truck, Parts and Other - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Amortized Cost Maturities:
Within one year	$ 313.9
One to five years	1,088.6
Six to ten years	5.2
More than ten years	2.0
Amortized Cost	1,409.7	$ 1,154.0
Fair Value Maturities:
Within one year	315.7
One to five years	1,106.1
Six to ten years	5.2
More than ten years	2.0
Fair Value	$ 1,429.0	$ 1,162.1

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Inventories (Detail) - Truck, Parts and Other - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Inventory [Line Items]
Finished products	$ 610.0	$ 584.6
Work in process and raw materials	801.9	754.9
Inventories, gross	1,411.9	1,339.5
Less LIFO reserve	(190.0)	(186.3)
Inventories, net	$ 1,221.9	$ 1,153.2

XML

Inventories - Additional Information (Detail)	Dec. 31, 2020	Dec. 31, 2019
Truck, Parts and Other
Inventory [Line Items]
Percentage of inventories valued using LIFO method of accounting	42.00%	46.00%

XML

Finance and Other Receivables (Detail) - USD ($) $ in Millions		Dec. 31, 2020		Jan. 01, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Financial Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans		$ 5,839.1			$ 5,241.7
Finance leases		3,944.7			3,906.7
Dealer wholesale financing		2,012.4			2,907.4
Operating lease receivables and other		151.5			142.6
Finance and other receivables, net of deferred income		11,947.7			12,198.4
Less allowance for losses		(127.0)	[1]		(112.4)	$ (113.8)	$ (117.2)
Finance and other receivables, net		11,820.7		$ 12,079.8	12,086.0
Loans and Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Less allowance for losses		(120.4)			(104.4)
Dealer | Wholesale
Accounts, Notes, Loans and Financing Receivable [Line Items]
Less allowance for losses		(3.4)			(4.3)
Dealer | Wholesale | Financial Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Less allowance for losses		(3.4)			(4.3)	(6.8)	(6.0)
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Less allowance for losses		(3.2)			(3.7)
Other | Financial Services
Accounts, Notes, Loans and Financing Receivable [Line Items]
Less allowance for losses	[2]	$ (3.2)			$ (3.7)	$ (3.2)	$ (9.3)

[1] The beginning balance has been adjusted for the adoption of ASU 2016-13.

[2] Operating lease and other trade receivables.

XML

Finance and Other Receivables - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accrued interest receivable	$ 35.6	$ 29.5
Loans accounted for as troubled debt restructurings	63.1	14.1
TDRs subsequently defaulted, amount	4.1
TDRs charged-off during the period	2.0
Repossessed inventory	19.3	25.6
Proceeds from the sales of repossessed assets	$ 85.6	$ 62.4	$ 75.8
Financial Services | Financing Receivable | Maximum | Credit Concentration Risk
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of portfolio assets	5.00%
Financial Services | Dealer | Wholesale
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing receivable repayment period	1 year

XML

Annual Minimum Payments Due on Loans (Detail) - Financial Services - Loans Receivable $ in Millions	Dec. 31, 2020 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
2021	$ 1,758.4
2022	1,480.1
2023	1,223.6
2024	881.8
2025	380.0
Thereafter	115.2
Loans Receivables	$ 5,839.1

XML

Annual Minimum Payments Due on Finance Lease Receivables and a Reconciliation of the Undiscounted Cash Flows to the Net Investment in Finance Leases (Detail) - Finance Leases Financing Receivable - Finance Leases $ in Millions	Dec. 31, 2020 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
2021	$ 1,310.4
2022	1,030.5
2023	775.0
2024	458.8
2025	223.4
Thereafter	82.5
Financing lease receivable	3,880.6
Unguaranteed residual values	458.8
Unearned interest on finance leases	(394.7)
Finance leases	$ 3,944.7

XML

Allowance for Credit Losses (Detail) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2020		Dec. 31, 2019	Dec. 31, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
Provision for losses		$ 28.8		$ 15.4	$ 16.5
Dealer | Wholesale
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance		4.3
Ending Balance		3.4		4.3
Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance		3.7
Ending Balance		3.2		3.7
Financial Services
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance		112.4		113.8	117.2
Provision for losses		28.8	[1]	15.4	16.5
Charge-offs		(28.0)	[1]	(28.4)	(27.5)
Recoveries		5.7	[1]	11.0	10.3
Currency translation and other		1.9	[1]	0.6	(2.7)
Ending Balance		127.0	[1]	112.4	113.8
Financial Services | ASU 2016-13
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	[1]	118.6
Ending Balance	[1]			118.6
Financial Services | Dealer | Wholesale
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance		4.3		6.8	6.0
Provision for losses		(1.0)		(1.6)	1.0
Charge-offs				(0.6)
Currency translation and other		0.1		(0.3)	(0.2)
Ending Balance		3.4		4.3	6.8
Financial Services | Dealer | Wholesale | ASU 2016-13
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance		4.3
Ending Balance				4.3
Financial Services | Dealer | Retail
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance		9.2		10.0	9.4
Provision for losses		(0.8)		(1.0)	0.7
Currency translation and other				0.2	(0.1)
Ending Balance		8.4		9.2	10.0
Financial Services | Dealer | Retail | ASU 2016-13
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance		9.2
Ending Balance				9.2
Financial Services | Customer Retail
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance		95.2		93.8	92.5
Provision for losses		30.1		14.2	13.6
Charge-offs		(26.6)		(24.2)	(20.0)
Recoveries		5.3		10.7	9.9
Currency translation and other		1.8		0.7	(2.2)
Ending Balance		112.0		95.2	93.8
Financial Services | Customer Retail | ASU 2016-13
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance		101.4
Ending Balance				101.4
Financial Services | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	[2]	3.7		3.2	9.3
Provision for losses	[2]	0.5		3.8	1.2
Charge-offs	[2]	(1.4)		(3.6)	(7.5)
Recoveries	[2]	0.4		0.3	0.4
Currency translation and other	[2]				(0.2)
Ending Balance	[2]	3.2		3.7	$ 3.2
Financial Services | Other | ASU 2016-13
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	[2]	$ 3.7
Ending Balance	[2]			$ 3.7

[1] The beginning balance has been adjusted for the adoption of ASU 2016-13.

[2] Operating lease and other trade receivables.

XML

Finance Receivable Evaluated and Determined Individually and Collectively (Detail) - Financial Services - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Financing Receivable, Allowance for Credit Losses [Line Items]
Amortized cost basis for impaired finance receivables evaluated individually	$ 87.9	$ 49.9
Allowance for impaired finance receivables determined individually	5.6	6.5
Amortized cost basis for finance receivables evaluated collectively	11,708.3	12,005.9
Allowance for finance receivables determined collectively	118.2	102.2
Dealer | Wholesale
Financing Receivable, Allowance for Credit Losses [Line Items]
Amortized cost basis for finance receivables evaluated collectively	2,012.4	2,907.4
Allowance for finance receivables determined collectively	3.4	4.3
Dealer | Retail
Financing Receivable, Allowance for Credit Losses [Line Items]
Amortized cost basis for impaired finance receivables evaluated individually	1.2	2.3
Amortized cost basis for finance receivables evaluated collectively	1,701.9	1,643.3
Allowance for finance receivables determined collectively	8.4	9.2
Customer Retail
Financing Receivable, Allowance for Credit Losses [Line Items]
Amortized cost basis for impaired finance receivables evaluated individually	86.7	47.6
Allowance for impaired finance receivables determined individually	5.6	6.5
Amortized cost basis for finance receivables evaluated collectively	7,994.0	7,455.2
Allowance for finance receivables determined collectively	$ 106.4	$ 88.7

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Amortized Cost Basis for Finance Receivables that are on Non-accrual Status (Detail) - Financial Services - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Financing Receivable, Recorded Investment, Past Due [Line Items]
Amortized cost basis for finance receivables that are on non-accrual status	$ 87.9	$ 49.7
Dealer | Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Amortized cost basis for finance receivables that are on non-accrual status	1.2	2.3
Customer Retail | Fleet
Financing Receivable, Recorded Investment, Past Due [Line Items]
Amortized cost basis for finance receivables that are on non-accrual status	78.6	40.2
Customer Retail | Owner/Operator
Financing Receivable, Recorded Investment, Past Due [Line Items]
Amortized cost basis for finance receivables that are on non-accrual status	$ 8.1	$ 7.2

XML

Summary of Impaired Loans (Detail) - Financial Services - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Financing Receivable, Impaired [Line Items]
Impaired loans with a specific reserve	$ 24.7	$ 14.0
Associated allowance	(1.9)	(2.7)
Net carrying amount of impaired loans with specific reserve	22.8	11.3
Impaired loans with no specific reserve	1.2	9.4
Net carrying amount of impaired loans	24.0	20.7
Average amortized cost basis	30.9	27.3
Dealer | Wholesale
Financing Receivable, Impaired [Line Items]
Average amortized cost basis		4.9
Dealer | Retail
Financing Receivable, Impaired [Line Items]
Impaired loans with no specific reserve	1.2	2.3
Net carrying amount of impaired loans	1.2	2.3
Average amortized cost basis	1.6	2.4
Customer Retail | Fleet
Financing Receivable, Impaired [Line Items]
Impaired loans with a specific reserve	22.6	10.9
Associated allowance	(1.6)	(2.1)
Net carrying amount of impaired loans with specific reserve	21.0	8.8
Impaired loans with no specific reserve		6.7
Net carrying amount of impaired loans	21.0	15.5
Average amortized cost basis	26.5	16.6
Customer Retail | Owner/Operator
Financing Receivable, Impaired [Line Items]
Impaired loans with a specific reserve	2.1	3.1
Associated allowance	(0.3)	(0.6)
Net carrying amount of impaired loans with specific reserve	1.8	2.5
Impaired loans with no specific reserve		0.4
Net carrying amount of impaired loans	1.8	2.9
Average amortized cost basis	$ 2.8	$ 3.4

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Interest Income Recognized on Cash Basis (Detail) - Financial Services - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Interest income recognized:
Interest income recognized on a cash basis	$ 1.9	$ 1.7	$ 2.2
Dealer | Retail
Interest income recognized:
Interest income recognized on a cash basis	0.2	0.2
Customer Retail | Fleet
Interest income recognized:
Interest income recognized on a cash basis	1.5	1.3	2.0
Customer Retail | Owner/Operator
Interest income recognized:
Interest income recognized on a cash basis	$ 0.2	$ 0.2	$ 0.2

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Amortized Cost Basis of Finance Receivables by Credit Quality Indicator and Portfolio Class (Detail) - Financial Services - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, Loans	$ 2,033.1
Financed Receivables, By Origination Year, 2020	3,752.9
Financed Receivables, By Origination Year, 2019	2,843.0
Financed Receivables, By Origination Year, 2018	1,736.5
Financed Receivables, By Origination Year, 2017	840.4
Financed Receivables, By Origination Year, 2016	381.5
Financed Receivables, By Origination Year, Prior	208.8
Finance Receivables, Total	11,796.2	$ 12,055.8
Dealer
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, Loans	2,033.1
Financed Receivables, By Origination Year, 2020	509.4
Financed Receivables, By Origination Year, 2019	485.4
Financed Receivables, By Origination Year, 2018	272.5
Financed Receivables, By Origination Year, 2017	181.5
Financed Receivables, By Origination Year, 2016	101.6
Financed Receivables, By Origination Year, Prior	132.0
Finance Receivables, Total	3,715.5
Dealer | Wholesale
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, Loans	2,012.4
Finance Receivables, Total	2,012.4	2,907.4
Dealer | Wholesale | Performing
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, Loans	2,004.5
Finance Receivables, Total	2,004.5
Dealer | Wholesale | Watch
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, Loans	7.9
Finance Receivables, Total	7.9
Dealer | Retail
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, Loans	20.7
Financed Receivables, By Origination Year, 2020	509.4
Financed Receivables, By Origination Year, 2019	485.4
Financed Receivables, By Origination Year, 2018	272.5
Financed Receivables, By Origination Year, 2017	181.5
Financed Receivables, By Origination Year, 2016	101.6
Financed Receivables, By Origination Year, Prior	132.0
Finance Receivables, Total	1,703.1	1,645.6
Dealer | Retail | Performing
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, Loans	20.7
Financed Receivables, By Origination Year, 2020	504.2
Financed Receivables, By Origination Year, 2019	474.9
Financed Receivables, By Origination Year, 2018	268.0
Financed Receivables, By Origination Year, 2017	180.1
Financed Receivables, By Origination Year, 2016	100.4
Financed Receivables, By Origination Year, Prior	132.0
Finance Receivables, Total	1,680.3
Dealer | Retail | Watch
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, 2020	5.2
Financed Receivables, By Origination Year, 2019	10.5
Financed Receivables, By Origination Year, 2018	4.5
Financed Receivables, By Origination Year, 2017	1.4
Finance Receivables, Total	21.6
Dealer | Retail | At-risk
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, 2016	1.2
Finance Receivables, Total	1.2
Customer Retail
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, 2020	3,243.5
Financed Receivables, By Origination Year, 2019	2,357.6
Financed Receivables, By Origination Year, 2018	1,464.0
Financed Receivables, By Origination Year, 2017	658.9
Financed Receivables, By Origination Year, 2016	279.9
Financed Receivables, By Origination Year, Prior	76.8
Finance Receivables, Total	8,080.7
Customer Retail | Fleet
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, 2020	2,686.4
Financed Receivables, By Origination Year, 2019	1,976.4
Financed Receivables, By Origination Year, 2018	1,233.7
Financed Receivables, By Origination Year, 2017	551.8
Financed Receivables, By Origination Year, 2016	238.1
Financed Receivables, By Origination Year, Prior	67.2
Finance Receivables, Total	6,753.6	6,347.7
Customer Retail | Fleet | Performing
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, 2020	2,664.9
Financed Receivables, By Origination Year, 2019	1,921.6
Financed Receivables, By Origination Year, 2018	1,203.7
Financed Receivables, By Origination Year, 2017	533.7
Financed Receivables, By Origination Year, 2016	234.2
Financed Receivables, By Origination Year, Prior	65.2
Finance Receivables, Total	6,623.3
Customer Retail | Fleet | Watch
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, 2020	13.5
Financed Receivables, By Origination Year, 2019	17.8
Financed Receivables, By Origination Year, 2018	11.8
Financed Receivables, By Origination Year, 2017	5.9
Financed Receivables, By Origination Year, 2016	1.5
Financed Receivables, By Origination Year, Prior	1.2
Finance Receivables, Total	51.7
Customer Retail | Fleet | At-risk
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, 2020	8.0
Financed Receivables, By Origination Year, 2019	37.0
Financed Receivables, By Origination Year, 2018	18.2
Financed Receivables, By Origination Year, 2017	12.2
Financed Receivables, By Origination Year, 2016	2.4
Financed Receivables, By Origination Year, Prior	0.8
Finance Receivables, Total	78.6
Customer Retail | Owner/Operator
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, 2020	557.1
Financed Receivables, By Origination Year, 2019	381.2
Financed Receivables, By Origination Year, 2018	230.3
Financed Receivables, By Origination Year, 2017	107.1
Financed Receivables, By Origination Year, 2016	41.8
Financed Receivables, By Origination Year, Prior	9.6
Finance Receivables, Total	1,327.1	$ 1,155.1
Customer Retail | Owner/Operator | Performing
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, 2020	554.6
Financed Receivables, By Origination Year, 2019	376.4
Financed Receivables, By Origination Year, 2018	225.1
Financed Receivables, By Origination Year, 2017	105.2
Financed Receivables, By Origination Year, 2016	41.2
Financed Receivables, By Origination Year, Prior	9.1
Finance Receivables, Total	1,311.6
Customer Retail | Owner/Operator | Watch
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, 2020	1.6
Financed Receivables, By Origination Year, 2019	2.7
Financed Receivables, By Origination Year, 2018	2.0
Financed Receivables, By Origination Year, 2017	0.7
Financed Receivables, By Origination Year, 2016	0.2
Financed Receivables, By Origination Year, Prior	0.2
Finance Receivables, Total	7.4
Customer Retail | Owner/Operator | At-risk
Financing Receivable, Recorded Investment [Line Items]
Financed Receivables, By Origination Year, 2020	0.9
Financed Receivables, By Origination Year, 2019	2.1
Financed Receivables, By Origination Year, 2018	3.2
Financed Receivables, By Origination Year, 2017	1.2
Financed Receivables, By Origination Year, 2016	0.4
Financed Receivables, By Origination Year, Prior	0.3
Finance Receivables, Total	$ 8.1

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Financing Receivables by Aging Category (Detail) - Financial Services - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, current and up to 30 days past due	$ 11,748.5	$ 11,990.8
Finance Receivables, Total	11,796.2	12,055.8
31 - 60 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	18.8	31.7
Greater than 60 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	28.9	33.3
Dealer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance Receivables, Total	3,715.5
Dealer | Wholesale
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, current and up to 30 days past due	2,012.4	2,907.4
Finance Receivables, Total	2,012.4	2,907.4
Dealer | Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, current and up to 30 days past due	1,703.1	1,645.6
Finance Receivables, Total	1,703.1	1,645.6
Customer Retail
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance Receivables, Total	8,080.7
Customer Retail | Fleet
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, current and up to 30 days past due	6,718.3	6,297.1
Finance Receivables, Total	6,753.6	6,347.7
Customer Retail | Owner/Operator
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, current and up to 30 days past due	1,314.7	1,140.7
Finance Receivables, Total	1,327.1	1,155.1
Customer Retail | 31 - 60 days past due | Fleet
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	12.3	23.0
Customer Retail | 31 - 60 days past due | Owner/Operator
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	6.5	8.7
Customer Retail | Greater than 60 days past due | Fleet
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	23.0	27.6
Customer Retail | Greater than 60 days past due | Owner/Operator
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	$ 5.9	$ 5.7

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Pre- and Post-Modification Amortized Cost Basis Balances for Finance Receivables Modified by Portfolio Class (Detail) - Financial Services - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Financing Receivable, Modifications [Line Items]
Pre-Modification, Amortized Cost Basis	$ 74.7	$ 2.5
Post-Modification, Amortized Cost Basis	74.7	2.5
Customer Retail | Fleet
Financing Receivable, Modifications [Line Items]
Pre-Modification, Amortized Cost Basis	72.5	2.2
Post-Modification, Amortized Cost Basis	72.5	2.2
Customer Retail | Owner/Operator
Financing Receivable, Modifications [Line Items]
Pre-Modification, Amortized Cost Basis	2.2	0.3
Post-Modification, Amortized Cost Basis	$ 2.2	$ 0.3

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Equipment on Operating Leases for Truck and Other Segment and for Financial Services Segment (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property Subject to or Available for Operating Lease [Line Items]
Total	$ 3,584.7	$ 3,648.1	$ 3,641.6
Truck, Parts and Other
Property Subject to or Available for Operating Lease [Line Items]
Equipment on operating leases	576.8	706.3
Less allowance for depreciation	(154.9)	(160.8)
Total	421.9	545.5
Financial Services
Property Subject to or Available for Operating Lease [Line Items]
Equipment on operating leases	4,493.9	4,350.0
Less allowance for depreciation	(1,331.1)	(1,247.4)
Total	$ 3,162.8	$ 3,102.6

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Equipment on Operating Leases - Additional Information (Detail) $ in Millions	Dec. 31, 2020 USD ($)
Property Subject to or Available for Operating Lease [Line Items]
Minimum lease payments receivable for operating leases, in 2021	$ 13.7
Minimum lease payments receivable for operating leases, in 2022	10.6
Minimum lease payments receivable for operating leases, in 2023	5.8
Minimum lease payments receivable for operating leases, in 2024	3.2
Minimum lease payments receivable for operating leases, in 2025	2.4
Minimum lease payments receivable for operating leases, thereafter	6.0
Financial Services
Property Subject to or Available for Operating Lease [Line Items]
Minimum lease payments receivable for operating leases, in 2021	668.2
Minimum lease payments receivable for operating leases, in 2022	451.8
Minimum lease payments receivable for operating leases, in 2023	252.8
Minimum lease payments receivable for operating leases, in 2024	104.3
Minimum lease payments receivable for operating leases, in 2025	35.0
Minimum lease payments receivable for operating leases, thereafter	5.1
Truck, Parts and Other
Property Subject to or Available for Operating Lease [Line Items]
Annual amortization of deferred lease revenues, in 2021	53.6
Annual amortization of deferred lease revenues, in 2022	24.6
Annual amortization of deferred lease revenues, in 2023	12.1
Annual amortization of deferred lease revenues, in 2024	8.5
Annual amortization of deferred lease revenues, in 2025	0.2
Annual amortization of deferred lease revenues, thereafter	0.0
Annual maturities of the residual value guarantees, in 2021	179.8
Annual maturities of the residual value guarantees, in 2022	82.4
Annual maturities of the residual value guarantees, in 2023	54.2
Annual maturities of the residual value guarantees, in 2024	15.9
Annual maturities of the residual value guarantees, in 2025	15.2
Annual maturities of the residual value guarantees, thereafter	$ 10.9

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Residual Value Obligation and Deferred Lease Revenue (Detail) - Truck, Parts and Other - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Property Subject to or Available for Operating Lease [Line Items]
Residual value guarantees	$ 358.4	$ 439.6
Deferred lease revenues	99.0	147.7
Residual value guarantees and deferred revenues, Total	$ 457.4	$ 587.3

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Property, Plant and Equipment (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	$ 3,270.4	$ 2,883.8	$ 2,480.9
Truck, Parts and Other
Property, Plant and Equipment [Line Items]
Land	286.4	271.8
Buildings and improvements	1,474.7	1,382.2
Machinery, equipment and production tooling	4,234.4	3,998.2
Construction in progress	1,081.8	741.7
Property, Plant and Equipment, Gross, Total	7,077.3	6,393.9
Less allowance for depreciation	(3,806.9)	(3,510.1)
Property, plant and equipment, net	$ 3,270.4	$ 2,883.8
Truck, Parts and Other | Minimum | Building and Building Improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Truck, Parts and Other | Minimum | Machinery Equipment And Production Tooling
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Truck, Parts and Other | Maximum | Building and Building Improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	40 years
Truck, Parts and Other | Maximum | Machinery Equipment And Production Tooling
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	12 years

XML

Accounts Payable, Accrued Expenses and Other (Detail) - Truck, Parts and Other - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Accounts Payable and Accrued Liabilities [Line Items]
Accounts payable	$ 1,176.2	$ 1,115.7
Product support liabilities	514.6	508.1
Accrued expenses	446.5	467.4
Right-of-return liabilities	337.3	226.0
Accrued capital expenditures	288.8	270.3
Salaries and wages	260.8	271.8
Other	389.7	334.9
Accounts payable, accrued expenses and other	$ 3,413.9	$ 3,194.2

XML

Changes in Product Support Liabilities (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
WARRANTY RESERVES
Beginning balance	$ 440.0
Ending balance	389.7	$ 440.0
Truck, Parts and Other
WARRANTY RESERVES
Beginning balance	440.0	380.2	$ 298.8
Cost accruals	295.0	386.3	331.9
Payments	(437.2)	(343.7)	(271.8)
Change in estimates for pre-existing warranties	84.1	19.8	25.6
Currency translation and other	7.8	(2.6)	(4.3)
Ending balance	389.7	440.0	380.2
DEFERRED REVENUES ON EXTENDED WARRANTIES AND R&M CONTRACTS
Beginning balance	801.4	699.9	653.9
Deferred revenues	409.9	499.1	448.2
Revenues recognized	(438.9)	(396.4)	(385.0)
Currency translation	23.4	(1.2)	(17.2)
Ending balance	$ 795.8	$ 801.4	$ 699.9

XML

Product Support Liabilities - Additional Information (Detail) $ in Millions	Dec. 31, 2020 USD ($)
Product Warranties Disclosures [Abstract]
Deferred revenues on extended warranties and R&M recognize, in 2021	$ 272.3
Deferred revenues on extended warranties and R&M recognize, in 2022	251.8
Deferred revenues on extended warranties and R&M recognize, in 2023	162.3
Deferred revenues on extended warranties and R&M recognize, in 2024	74.6
Deferred revenues on extended warranties and R&M recognize, in 2025	25.4
Deferred revenues on extended warranties and R&M recognize, thereafter	$ 9.4

XML

Product Support Liabilities (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Product Liability Contingency [Line Items]
Warranty Reserves	$ 389.7	$ 440.0
Deferred Revenues	795.8	801.4
Truck, Parts and Other
Product Liability Contingency [Line Items]
Warranty Reserves	389.7	440.0	$ 380.2	$ 298.8
Truck, Parts and Other | Accounts payable, accrued expenses and other
Product Liability Contingency [Line Items]
Warranty Reserves	245.6	270.6
Deferred Revenues	269.0	237.5
Truck, Parts and Other | Other liabilities
Product Liability Contingency [Line Items]
Warranty Reserves	144.1	169.4
Deferred Revenues	513.1	547.6
Financial Services | Accounts payable, accrued expenses and other
Product Liability Contingency [Line Items]
Deferred Revenues	5.7	6.8
Financial Services | Deferred Taxes and Other Liabilities
Product Liability Contingency [Line Items]
Deferred Revenues	$ 8.0	$ 9.5

XML

Financial Services Borrowings (Detail) - Financial Services - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Effective Rate	1.40%	1.90%
Commercial paper	$ 3,113.5	$ 3,797.2
Bank loans	230.9	313.0
Commercial paper and bank loans	3,344.4	4,110.2
Term notes	7,508.9	7,112.5
Commercial Paper, Bank Loans, and Term Debt at Carrying Value, Total	$ 10,853.3	$ 11,222.7
Commercial Paper
Debt Instrument [Line Items]
Effective Rate	0.40%	1.50%
Bank Loans
Debt Instrument [Line Items]
Effective Rate	5.90%	7.10%
Term Loan
Debt Instrument [Line Items]
Effective Rate	1.70%	1.90%

XML

Borrowings and Credit Arrangements - Additional Information (Detail) $ in Millions	1 Months Ended	12 Months Ended
	Apr. 30, 2016 MXN ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Feb. 19, 2021 USD ($)	Dec. 31, 2020 EUR (€)	Dec. 31, 2020 MXN ($)
Debt Disclosure [Line Items]
Interest paid on borrowings		$ 164.5	$ 203.8	$ 166.5
Line of credit, maximum capacity		3,523.1
Line of credit, unused borrowing capacity		3,292.2
Syndicated loan facility
Debt Disclosure [Line Items]
Line of credit, maximum capacity		3,000.0
Line of credit, outstanding amount		0.0
Expires in June 2019 | Syndicated loan facility
Debt Disclosure [Line Items]
Line of credit, maximum capacity		$ 1,000.0
Line of credit, expiry date		2021-06
Expires in June 2022 | Syndicated loan facility
Debt Disclosure [Line Items]
Line of credit, maximum capacity		$ 1,000.0
Line of credit, expiry date		2023-06
Expires in June 2023 | Syndicated loan facility
Debt Disclosure [Line Items]
Line of credit, maximum capacity		$ 1,000.0
Line of credit, expiry date		2024-06
PACCAR's U.S. finance subsidiary | Medium-term Notes
Debt Disclosure [Line Items]
Debt outstanding		$ 6,000.0
Registration expiration		2021-11
PACCAR's U.S. finance subsidiary | Subsequent Event | Medium-term Notes
Debt Disclosure [Line Items]
Debt outstanding					$ 400.0
PACCAR's European finance subsidiary | Medium-term Notes
Debt Disclosure [Line Items]
Debt, unused borrowing capacity | €						€ 1,600,000,000.0
Debt, borrowing capacity | €						€ 2,500,000,000.0
Debt, renewal period		This program replaced an expiring program in the second quarter of 2020 and is renewable annually through the filing of a new listing.
PACCAR's Mexico finance subsidiary | Commercial Paper
Debt Disclosure [Line Items]
Maximum limit of borrowing capacity	$ 5,000,000,000.0
PACCAR's Mexico finance subsidiary | Commercial Paper | Maximum
Debt Disclosure [Line Items]
Commercial paper expiration period	1 year
PACCAR's Mexico finance subsidiary | Medium-term Notes
Debt Disclosure [Line Items]
Registration expiration		2021-04
Debt, unused borrowing capacity							$ 6,842,700,000
PACCAR's Mexico finance subsidiary | Medium-term Notes | Commercial Paper
Debt Disclosure [Line Items]
Debt, borrowing capacity	$ 10,000,000,000.0
PACCAR's Australian subsidiary | Medium-term Notes
Debt Disclosure [Line Items]
Debt outstanding		$ 450.0
Financial Services
Debt Disclosure [Line Items]
Commercial paper and term notes borrowings		10,622.4	10,909.7
Fair value hedges and unamortized discounts, net		$ (12.7)	$ (20.5)

XML

Annual Maturities of Financial Services Borrowings (Detail) - Financial Services $ in Millions	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
2021	$ 5,396.0
2022	2,353.5
2023	2,250.9
2024	440.5
2025	425.1
Debt, Long-term and Short-term, Combined Amount, Total	10,866.0
Medium-term Notes
Debt Instrument [Line Items]
2021	2,241.7
2022	2,231.9
2023	2,231.9
2024	415.4
2025	400.0
Debt, Long-term and Short-term, Combined Amount, Total	7,520.9
Notes Payable to Banks
Debt Instrument [Line Items]
2021	40.1
2022	121.6
2023	19.0
2024	25.1
2025	25.1
Debt, Long-term and Short-term, Combined Amount, Total	230.9
Commercial Paper
Debt Instrument [Line Items]
2021	3,114.2
Debt, Long-term and Short-term, Combined Amount, Total	$ 3,114.2

XML

Schedule of Components of Lease Expense (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Finance lease cost
Amortization of right-of-use assets	$ 0.9	$ 0.9
Interest on lease liabilities	0.1	0.1
Operating lease cost	16.6	16.9
Short-term lease cost	0.8	0.7
Variable lease cost	1.7	1.8
Total lease cost	$ 20.1	$ 20.4

XML

Leases - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Rental expenses	$ 20.1	$ 20.4	$ 35.7

XML

Schedule of Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
OPERATING LEASES
Total right-of-use assets	$ 39.9	$ 36.9
Total lease liabilities	40.3	37.7
FINANCE LEASES
Total right-of-use assets	1.0	1.1
Total lease liabilities	1.0	1.2
Truck, Parts and Other
OPERATING LEASES
Accounts payable, accrued expenses and other	$ 11.4	$ 13.0
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:AccountsPayableAndOtherAccruedLiabilitiesCurrent	us-gaap:AccountsPayableAndOtherAccruedLiabilitiesCurrent
Other liabilities	$ 20.3	$ 19.5
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent	us-gaap:OtherLiabilitiesNoncurrent
FINANCE LEASES
Accounts payable, accrued expenses and other	$ 0.5	$ 0.7
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:AccountsPayableAndOtherAccruedLiabilitiesCurrent	us-gaap:AccountsPayableAndOtherAccruedLiabilitiesCurrent
Other liabilities	$ 0.5	$ 0.5
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent	us-gaap:OtherLiabilitiesNoncurrent
Truck, Parts and Other | Other Noncurrent Assets
OPERATING LEASES
Total right-of-use assets	$ 30.9	$ 31.7
FINANCE LEASES
Total right-of-use assets	1.0	1.1
Financial Services | Other Assets
OPERATING LEASES
Total right-of-use assets	9.0	5.2
Financial Services | Accounts Payable, Accrued Expense and Other
OPERATING LEASES
Total lease liabilities	2.0	1.5
Financial Services | Deferred Taxes and Other Liabilities
OPERATING LEASES
Total lease liabilities	$ 6.6	$ 3.7

XML

Schedule of Weighted-Average Remaining Lease Term and Discount Rate (Detail)	Dec. 31, 2020	Dec. 31, 2019
OPERATING LEASES
Weighted-average remaining lease term	5 years 8 months 12 days	5 years 1 month 6 days
Weighted-average discount rate	1.40%	1.90%
FINANCE LEASES
Weighted-average remaining lease term	2 years 3 months 18 days	2 years 2 months 12 days
Weighted-average discount rate	2.50%	4.00%

XML

Schedule of Maturities of Lease Liabilities (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
OPERATING LEASES
2021	$ 13.7
2022	10.6
2023	5.8
2024	3.2
2025	2.4
Thereafter	6.0
Total lease payments	41.7
Less: interest	(1.4)
Total lease liabilities	40.3	$ 37.7
FINANCE LEASES
2021	0.6
2022	0.2
2023	0.2
2024	0.1
Total lease payments	1.1
Less: interest	(0.1)
Total lease liabilities	$ 1.0	$ 1.2

XML

Schedule of Cash Flow Information Related to Leases (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 17.2	$ 17.0
Operating cash flows from finance leases	0.1	0.2
Financing cash flows from finance leases	0.9	1.0
Right-of-use assets obtained in exchange for lease liabilities
Operating leases	19.9	8.9
Finance leases	$ 0.5	$ 0.7

XML

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Commitments And Contingencies Disclosure [Abstract]
Standby letters of credit and surety bonds	$ 45.5
Outstanding commitments to fund new loan and lease transactions	$ 823.4
Funding commitments for loans and leases expiration period	90 days
Other commitments due in 2021	$ 127.5
Other commitments due in 2022	76.1
Other commitments due in 2023	3.4
Other commitments due in 2024	0.3
Other commitments due in 2025	0.0
Other commitments due in 2025 and beyond	0.0
Environmental activities expenditures	$ 1.9	$ 1.3	$ 1.2

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Employee Benefits - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Defined Benefit Plan Disclosure [Line Items]
Severance Costs	$ 6.1	$ 5.8	$ 0.7
Metal and Electrical Engineering Industry Pension Fund
Defined Benefit Plan Disclosure [Line Items]
Actual coverage ratio percentage	97.20%
Western Metal Industry Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by the Company	15.00%	20.00%
MEASURED AT NAV | U.S. Fixed Income
Defined Benefit Plan Disclosure [Line Items]
Investments		$ 123.4
Minimum | Metal and Electrical Engineering Industry Pension Fund
Defined Benefit Plan Disclosure [Line Items]
Required coverage ratio percentage	104.30%
Maximum | Metal and Electrical Engineering Industry Pension Fund
Defined Benefit Plan Disclosure [Line Items]
Contributions by the Company	5.00%	5.00%
Maximum | Other Plans
Defined Benefit Plan Disclosure [Line Items]
Contributions by the Company	5.00%	5.00%
Defined Benefit Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Accumulated unrecognized actuarial gains and losses	10.00%
Contribution to pension plans	$ 184.9	$ 35.7
Expected pension contributions minimum funding requirements	19.7
Annual benefits expected to be paid year one	125.7
Annual benefits expected to be paid year two	109.8
Annual benefits expected to be paid year three	114.8
Annual benefits expected to be paid year four	121.2
Annual benefits expected to be paid year five	127.0
Annual benefits expected to be paid for the five years thereafter	726.4
Unrecognized actuarial loss amount in accumulated other comprehensive loss expected to be amortized next year	56.7
Unrecognized prior service cost amount in accumulated other comprehensive loss expected to be amortized next year	0.8
Accumulated benefit obligation for all pension plans of the Company	3,321.5	$ 2,806.3
Defined Benefit Pension Plans | Minimum
Defined Benefit Plan Disclosure [Line Items]
Expected pension contributions by the company to the pension plans in the next year	100.0
Defined Benefit Pension Plans | Maximum
Defined Benefit Plan Disclosure [Line Items]
Expected pension contributions by the company to the pension plans in the next year	$ 150.0
Defined Contribution Plans
Defined Benefit Plan Disclosure [Line Items]
Percentage match for base wages	5.00%	5.00%	5.00%
Defined contribution benefit plans expense	$ 42.5	$ 48.3	$ 45.3

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Allocation of Plan Assets by Investments (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	$ 3,793.4	$ 3,226.4	$ 2,699.2
Level 1
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	86.5	101.2
Level 2
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	426.2	356.6
Fair Value Inputs Level 1 And Level 2 [Member]
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	512.7	457.8
MEASURED AT NAV
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	3,280.7	2,768.6
U.S. Equities
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	1,047.0	860.1
U.S. Equities | MEASURED AT NAV
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	1,047.0	860.1
Global Equities
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	1,140.6	973.1
Global Equities | MEASURED AT NAV
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	1,140.6	973.1
Total Equities
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	$ 2,187.6	$ 1,833.2
Total Equities | Minimum
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Equity funds, target	50.00%	50.00%
Total Equities | Maximum
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Equity funds, target	70.00%	70.00%
Total Equities | MEASURED AT NAV
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	$ 2,187.6	$ 1,833.2
U.S. Fixed Income
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	1,099.8	962.6
U.S. Fixed Income | Level 1
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	83.9	90.6
U.S. Fixed Income | Level 2
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	296.0	260.3
U.S. Fixed Income | Fair Value Inputs Level 1 And Level 2 [Member]
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	379.9	350.9
U.S. Fixed Income | MEASURED AT NAV
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	719.9	611.7
Non-U.S. Fixed Income
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	403.2	350.1
Non-U.S. Fixed Income | Level 2
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	30.4	28.1
Non-U.S. Fixed Income | Fair Value Inputs Level 1 And Level 2 [Member]
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	30.4	28.1
Non-U.S. Fixed Income | MEASURED AT NAV
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	372.8	322.0
Total Fixed Income
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	$ 1,503.0	$ 1,312.7
Total Fixed Income | Minimum
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Equity funds, target	30.00%	30.00%
Total Fixed Income | Maximum
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Equity funds, target	50.00%	50.00%
Total Fixed Income | Level 1
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	$ 83.9	$ 90.6
Total Fixed Income | Level 2
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	326.4	288.4
Total Fixed Income | Fair Value Inputs Level 1 And Level 2 [Member]
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	410.3	379.0
Total Fixed Income | MEASURED AT NAV
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	1,092.7	933.7
Cash and Other
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	102.8	80.5
Cash and Other | Level 1
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	2.6	10.6
Cash and Other | Level 2
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	99.8	68.2
Cash and Other | Fair Value Inputs Level 1 And Level 2 [Member]
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	102.4	78.8
Cash and Other | MEASURED AT NAV
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
Plan assets	$ 0.4	$ 1.7

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Weighted Average Assumptions Relate to All Pension Plans of Company, Except for Certain Multi-Employer and Defined Contribution Plans (Detail)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Compensation And Retirement Disclosure [Abstract]
Discount rate	2.20%	2.90%
Rate of increase in future compensation levels	3.70%	3.80%
Assumed long-term rate of return on plan assets	6.20%	6.30%

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Components of Change in Projected Benefit Obligation and Change in Plan Assets (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Change in projected benefit obligation:
Benefit obligation, beginning balance	$ 3,234.4	$ 2,655.4
Service cost	130.4	102.0	$ 108.3
Interest cost	83.0	95.6	85.8
Benefits paid	(120.2)	(127.0)
Actuarial loss	379.5	478.0
Currency translation and other	54.4	30.0
Participant contributions	0.4	0.4
Projected benefit obligation, ending balance	3,761.9	3,234.4	2,655.4
Change in plan assets:
Fair value of plan assets, beginning balance	3,226.4	2,699.2
Employer contributions	184.9	35.7
Actual return on plan assets	453.4	588.1
Benefits paid	(120.2)	(127.0)
Currency translation and other	48.5	30.0
Participant contributions	0.4	0.4
Fair value of plan assets, ending balance	3,793.4	3,226.4	$ 2,699.2
Funded status, ending balance	31.5	(8.0)
Amounts recorded on Balance Sheet:
Other noncurrent assets	222.1	146.5
Accounts payable, accrued expenses and other	25.5	39.9
Other liabilities	165.1	114.6
Accumulated other comprehensive loss:
Actuarial loss	571.7	512.5
Prior service cost	$ 6.3	5.1
Net initial transition amount		$ 0.1

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Information for All Plans with Accumulated Benefit Obligation in Excess of Plan Assets (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Defined Benefit Plan Pension Plans With Accumulated Benefit Obligations In Excess Of Plan Assets [Abstract]
Projected benefit obligation	$ 167.9	$ 170.6
Accumulated benefit obligation	148.7	150.1
Fair value of plan assets	$ 13.5	$ 23.4

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Components of Pension Expense (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Defined Benefit Plan Net Periodic Benefit Cost [Abstract]
Service cost	$ 130.4	$ 102.0	$ 108.3
Interest on projected benefit obligation	83.0	95.6	85.8
Expected return on assets	(190.6)	(176.6)	(177.2)
Amortization of prior service costs	1.5	1.4	1.4
Recognized actuarial loss	44.2	20.5	35.3
Settlement loss	11.6
Net pension expense	$ 80.1	$ 42.9	$ 53.6

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Multi-employer Plans (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Multiemployer Plans [Line Items]
Entity Tax Identification Number	91-0351110
COMPANY CONTRIBUTIONS	$ 37.8	$ 32.8	$ 31.8
Metal and Electrical Engineering Industry Pension Fund
Multiemployer Plans [Line Items]
PENSION PLAN NUMBER	135668
COMPANY CONTRIBUTIONS	$ 33.9	27.8	27.9
Western Metal Industry Pension Plan
Multiemployer Plans [Line Items]
PENSION PLAN NUMBER	001
Entity Tax Identification Number	91-6033499
COMPANY CONTRIBUTIONS	$ 3.0	3.8	2.7
Other Plans
Multiemployer Plans [Line Items]
COMPANY CONTRIBUTIONS	$ 0.9	$ 1.2	$ 1.2

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Components of Income Before Income Taxes (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Domestic	$ 1,122.9	$ 2,201.1	$ 1,775.2
Foreign	535.0	898.1	1,035.0
Income before income taxes	$ 1,657.9	$ 3,099.2	$ 2,810.2

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Components of Provision for Income Taxes (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Current provision:
Federal	$ 182.5	$ 352.3	$ 267.1
State	44.9	96.8	67.5
Foreign	132.6	191.4	263.0
Current Income Tax Expense (Benefit), Total	360.0	640.5	597.6
Deferred (benefit) provision:
Federal	(11.2)	40.7	22.6
State	1.7	(4.3)	1.3
Foreign	9.0	34.4	(6.4)
Deferred taxes	(0.5)	70.8	17.5
Income taxes	$ 359.5	$ 711.3	$ 615.1

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Taxes [Line Items]
Tax benefits recognized for net operating loss carryforwards	$ 17.8	$ 12.4	$ 5.0
Net operating loss carryforwards	492.2
Deferred tax asset related to operating loss carryforwards	129.2
Valuation allowance	$ 102.1	118.5
Carryforward description	The carryforward periods range from four years to indefinite, subject to certain limitations under applicable laws.
Cash paid for income taxes	$ 374.0	586.0	607.6
Unrecognized tax benefits	24.5	30.7	21.2	$ 22.9
Unrecognized tax benefits that, if recognized, would affect the effective tax rate	23.2	28.4	18.9
(Income) expense related to interest	(0.7)	0.8	(0.1)
Accrued interest expense and penalties	1.2	$ 1.9	$ 1.1
Unrecognized tax benefits resulting from research and development tax credits	$ 5.5
Internal Revenue Service (IRS)
Income Taxes [Line Items]
Tax examinations	the United States Internal Revenue Service has completed examinations of the Company’s tax returns for all years through 2014.
Net Operating Loss Carryforwards
Income Taxes [Line Items]
Valuation allowance	$ 95.6
Minimum
Income Taxes [Line Items]
Operating loss carryforwards periods	4 years
Foreign
Income Taxes [Line Items]
Net operating loss carryforwards	$ 416.2
United States
Income Taxes [Line Items]
Net operating loss carryforwards	$ 76.0
Other Major Jurisdictions | Earliest Tax Year
Income Taxes [Line Items]
Tax year remain subject to examination	2012
Other Major Jurisdictions | Latest Tax Year
Income Taxes [Line Items]
Tax year remain subject to examination	2020

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Reconciliation of Statutory U.S. Federal Tax Rate to Effective Income Tax Rate (Detail)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Statutory rate	21.00%	21.00%	21.00%
Transition tax			(0.20%)
State	2.30%	2.30%	2.20%
Research and development tax credit	(1.40%)	(0.90%)	(0.80%)
Tax on foreign earnings	0.80%	0.90%	1.00%
Other, net	(1.00%)	(0.30%)	(1.30%)
Effective income tax rate	21.70%	23.00%	21.90%

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Tax Effects of Temporary Differences Representing Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Assets:
Accrued expenses	$ 205.3	$ 203.5
Net operating loss and tax credit carryforwards	140.1	132.0
Postretirement benefit plans	0.0	4.9
Allowance for losses on receivables	36.0	31.4
Goodwill and intangibles	10.0	18.7
Other	122.9	103.3
Deferred Tax Assets, Gross, Total	514.3	493.8
Valuation allowance	(102.1)	(118.5)
Deferred Tax Assets, Net of Valuation Allowance, Total	412.2	375.3
Liabilities:
Financial Services leasing depreciation	(765.1)	(777.5)
Depreciation and amortization	(168.0)	(159.4)
Postretirement benefit plans	(3.0)	0.0
Other	(46.1)	(28.9)
Deferred Tax Liability, Total	(982.2)	(965.8)
Net deferred tax liability	$ (570.0)	$ (590.5)

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Balance Sheet Classifications of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Schedule Of Deferred Income Tax Assets And Liabilities [Line Items]
Deferred Tax Liabilities	$ (570.0)	$ (590.5)
Truck, Parts and Other | Other Noncurrent Assets
Schedule Of Deferred Income Tax Assets And Liabilities [Line Items]
Deferred Tax Assets Net	90.4	115.4
Truck, Parts and Other | Other liabilities
Schedule Of Deferred Income Tax Assets And Liabilities [Line Items]
Deferred Tax Liabilities	(3.5)	(5.3)
Financial Services | Other Assets
Schedule Of Deferred Income Tax Assets And Liabilities [Line Items]
Deferred Tax Assets Net	46.8	36.8
Financial Services | Deferred Taxes and Other Liabilities
Schedule Of Deferred Income Tax Assets And Liabilities [Line Items]
Deferred Tax Liabilities	$ (703.7)	$ (737.4)

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Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Balance at beginning of the year	$ 30.7	$ 21.2	$ 22.9
Additions for tax positions related to the current year	5.5	6.5	11.2
Additions for tax positions related to prior years	0.3	3.0
Reductions for tax positions related to prior years	(4.2)
Reductions related to settlements			(5.7)
Lapse of statute of limitations	(7.8)		(7.2)
Balance at the end of the year	$ 24.5	$ 30.7	$ 21.2

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Changes in Accumulated Other Comprehensive Income (Loss) by Component (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 9,706.1	$ 8,592.9
Reclassified out of AOCI	106.3	56.3	$ (62.6)
Net other comprehensive income (loss)	49.8	(1.6)	(271.7)
Ending balance	10,390.0	9,706.1	8,592.9
Derivative Contracts
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(15.3)	2.0	1.2
Recorded into AOCI	(78.4)	(57.0)	90.9
Reclassified out of AOCI	64.5	39.7	(90.5)
Net other comprehensive income (loss)	(13.9)	(17.3)	0.4
Reclassifications to retained earnings in accordance with ASU 2018-02			0.4
Ending balance	(29.2)	(15.3)	2.0
Marketable Debt Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	6.1	(2.3)	(1.8)
Recorded into AOCI	10.3	8.7	0.1
Reclassified out of AOCI	(1.8)	(0.3)	(0.1)
Net other comprehensive income (loss)	8.5	8.4
Reclassifications to retained earnings in accordance with ASU 2018-02			(0.5)
Ending balance	14.6	6.1	(2.3)
Pension Plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(517.7)	(477.8)	(375.6)
Recorded into AOCI	(104.0)	(56.8)	(86.8)
Reclassified out of AOCI	43.6	16.9	28.0
Net other comprehensive income (loss)	(60.4)	(39.9)	(58.8)
Reclassifications to retained earnings in accordance with ASU 2018-02			(43.4)
Ending balance	(578.1)	(517.7)	(477.8)
Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(573.2)	(620.4)	(417.4)
Recorded into AOCI	115.6	47.2	(213.3)
Net other comprehensive income (loss)	115.6	47.2	(213.3)
Reclassifications to retained earnings in accordance with ASU 2018-02			10.3
Ending balance	(457.6)	(573.2)	(620.4)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(1,100.1)	(1,098.5)	(793.6)
Recorded into AOCI	(56.5)	(57.9)	(209.1)
Reclassified out of AOCI	106.3	56.3	(62.6)
Net other comprehensive income (loss)	49.8	(1.6)	(271.7)
Reclassifications to retained earnings in accordance with ASU 2018-02			(33.2)
Ending balance	$ (1,050.3)	$ (1,100.1)	$ (1,098.5)

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Reclassifications Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Income before income taxes									$ (1,657.9)	$ (3,099.2)	$ (2,810.2)
Investment income									35.9	82.3	60.9
Tax (benefit) expense									359.5	711.3	615.1
Net Income (Loss)	$ (405.8)	$ (385.5)	$ (147.7)	$ (359.4)	$ (531.3)	$ (607.9)	$ (619.7)	$ (629.0)	(1,298.4)	(2,387.9)	(2,195.1)
Total reclassifications out of AOCI									106.3	56.3	(62.6)
Derivative Contracts
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total reclassifications out of AOCI									64.5	39.7	(90.5)
Derivative Contracts | Reclassification out of Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income (Loss) [Line Items]
Income before income taxes									87.6	51.7	(121.5)
Tax (benefit) expense									(23.1)	(12.0)	31.0
Net Income (Loss)									64.5	39.7	(90.5)
Marketable Debt Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total reclassifications out of AOCI									(1.8)	(0.3)	(0.1)
Marketable Debt Securities | Reclassification out of Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income (Loss) [Line Items]
Investment income									(2.4)	(0.4)	(0.2)
Tax (benefit) expense									0.6	0.1	0.1
Net Income (Loss)									(1.8)	(0.3)	(0.1)
Pension Plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total reclassifications out of AOCI									43.6	16.9	28.0
Truck, Parts and Other
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net sales and revenues	(5,136.0)	(4,538.4)	(2,701.9)	(4,778.0)	(5,710.9)	(6,004.2)	(6,266.5)	(6,138.1)	(17,154.3)	(24,119.7)
Cost of sales and revenues	4,487.0	3,958.3	2,441.5	4,189.6	4,890.0	5,106.8	5,341.7	5,217.1
Truck, Parts and Other | Derivative Contracts | Foreign-exchange contracts | Reclassification out of Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net sales and revenues									(4.0)	21.2	5.4
Cost of sales and revenues									1.7	(4.1)	(6.6)
Interest and other (income), net									(4.6)	2.1	(1.6)
Truck, Parts and Other | Actuarial loss
Accumulated Other Comprehensive Income (Loss) [Line Items]
Interest and other (income), net									44.2	20.5	35.3
Truck, Parts and Other | Prior service costs
Accumulated Other Comprehensive Income (Loss) [Line Items]
Interest and other (income), net									1.5	1.4	1.4
Truck, Parts and Other | Settlement loss
Accumulated Other Comprehensive Income (Loss) [Line Items]
Interest and other (income), net									11.6
Truck, Parts and Other | Pension Plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Income before income taxes									57.3	21.9	36.7
Tax (benefit) expense									(13.7)	(5.0)	(8.7)
Net Income (Loss)									43.6	16.9	28.0
Financial Services
Accumulated Other Comprehensive Income (Loss) [Line Items]
Interest and other borrowing expenses	$ 43.6	$ 45.2	$ 46.9	$ 56.4	$ 57.5	$ 59.6	$ 60.0	$ 53.4
Financial Services | Derivative Contracts | Interest-Rate Contracts | Reclassification out of Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income (Loss) [Line Items]
Interest and other borrowing expenses									$ 94.5	$ 32.5	$ (118.7)

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Stockholders' Equity - Additional Information (Detail) - shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
TREASURY STOCK, AT COST:
Equity Class of Treasury Stock [Line Items]
Treasury stock, shares retired	700,000	1,700,000	5,800,000

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Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Fair Value Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Remaining cumulative basis adjustments on discontinued hedge relationship	$ (0.4)	$ (1.5)
Cash Flow Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Maximum length of future cash flow hedges	7 years 6 months
Accumulated net loss on derivative contracts included in accumulated other comprehensive loss expected to be recognized in the Consolidated Statements of Comprehensive Income in the following 12 months, net of tax	$ 15.0
Reclassification from AOCI
Net Investment Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative notional amount outstanding	344.8
Pre-tax loss recognized in OCI	20.4
Interest-Rate Contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of outstanding contracts	3,280.5
Notional maturities for interest-rate contracts 2021	1,241.1
Notional maturities for interest-rate contracts 2022	950.0
Notional maturities for interest-rate contracts 2023	761.8
Notional maturities for interest-rate contracts 2024	169.6
Notional maturities for interest-rate contracts 2025	58.9
Notional maturities for interest-rate contracts thereafter	99.1
Foreign-exchange contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative notional amount outstanding	$ 1,128.8
Foreign-exchange contracts maturity period	within one year

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Balance Sheet Classifications, Fair Value, Gross and Pro Forma Net Amounts of Derivative Financial Instruments (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
ASSETS
Derivative assets	$ 20.5	$ 56.3
Pro forma net amount	6.4	47.3
LIABILITIES
Derivative liabilities	159.9	44.3
Pro forma net amount	145.8	35.3
Interest-Rate Contracts | Financial Services
ASSETS
Less amounts not offset in financial instruments	(12.0)	(8.6)
LIABILITIES
Less amounts not offset in financial instruments	(12.0)	(8.6)
Foreign-exchange contracts | Truck, Parts and Other
ASSETS
Less amounts not offset in financial instruments	(2.1)	(0.4)
LIABILITIES
Less amounts not offset in financial instruments	(2.1)	(0.4)
Designated under hedge accounting
ASSETS
Derivative assets	19.1	55.9
LIABILITIES
Derivative liabilities	153.2	40.2
Designated under hedge accounting | Interest-Rate Contracts | Other Assets
ASSETS
Derivative assets	20.5
Designated under hedge accounting | Interest-Rate Contracts | Financial Services | Other Assets
ASSETS
Derivative assets	16.4	45.8
Designated under hedge accounting | Interest-Rate Contracts | Financial Services | Deferred Taxes and Other Liabilities
LIABILITIES
Derivative liabilities	116.1	31.0
Designated under hedge accounting | Foreign-exchange contracts | Financial Services | Deferred Taxes and Other Liabilities
LIABILITIES
Derivative liabilities	1.2	0.0
Designated under hedge accounting | Foreign-exchange contracts | Truck, Parts and Other | Other current assets
ASSETS
Derivative assets	2.7	10.1
Designated under hedge accounting | Foreign-exchange contracts | Truck, Parts and Other | Accounts payable, accrued expenses and other
LIABILITIES
Derivative liabilities	35.9	9.2
Not designated as hedging instruments
ASSETS
Derivative assets	1.4	0.4
LIABILITIES
Derivative liabilities	6.7	4.1
Not designated as hedging instruments | Foreign-exchange contracts | Financial Services | Other Assets
ASSETS
Derivative assets	0.3	0.0
Not designated as hedging instruments | Foreign-exchange contracts | Financial Services | Deferred Taxes and Other Liabilities
LIABILITIES
Derivative liabilities	3.4	2.3
Not designated as hedging instruments | Foreign-exchange contracts | Truck, Parts and Other | Other current assets
ASSETS
Derivative assets	1.1	0.4
Not designated as hedging instruments | Foreign-exchange contracts | Truck, Parts and Other | Accounts payable, accrued expenses and other
LIABILITIES
Derivative liabilities	$ 3.3	$ 1.8

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Amount of (Gain) Loss from Derivative Financial Instruments Reclassified from AOCI into Consolidated Statements of Income (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Truck, Parts and Other
Derivative Instruments Gain Loss [Line Items]
Derivatives designated as hedging instruments (gain) loss	$ (12.5)	$ 14.6	$ (2.8)
Financial Services
Derivative Instruments Gain Loss [Line Items]
Derivatives designated as hedging instruments (gain) loss	95.6	34.0	(116.9)
Fair Value Hedging | Financial Services
Derivative Instruments Gain Loss [Line Items]
Derivatives designated as hedging instruments (gain) loss	1.1	1.5	1.8
Cash Flow Hedging | Truck, Parts and Other
Derivative Instruments Gain Loss [Line Items]
Derivatives designated as hedging instruments (gain) loss	(6.9)	19.2	(2.8)
Cash Flow Hedging | Financial Services
Derivative Instruments Gain Loss [Line Items]
Derivatives designated as hedging instruments (gain) loss	94.5	32.5	$ (118.7)
Net Investment Hedging | Truck, Parts and Other
Derivative Instruments Gain Loss [Line Items]
Derivatives designated as hedging instruments (gain) loss	$ (5.6)	$ (4.6)

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Amounts Related to Cumulative Basis Adjustments for Fair Value Hedges (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Carrying amount of hedged liabilities	$ 90.9	$ 90.5
Cumulative basis adjustment included in the carrying amount	$ (0.9)	$ (0.5)

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Pre-Tax Effects of (Loss) Gain Derivative Instruments Recognized in OCI (Detail) - Derivative Contracts - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Interest-Rate Contracts
Derivative [Line Items]
(Loss) gain recognized in OCI	$ (107.3)	$ (44.4)	$ 117.1
Foreign-exchange contracts
Derivative [Line Items]
(Loss) gain recognized in OCI	2.0	(31.7)	4.5
Truck, Parts and Other | Foreign-exchange contracts
Derivative [Line Items]
(Loss) gain recognized in OCI	2.8	(31.7)	4.5
Financial Services | Interest-Rate Contracts
Derivative [Line Items]
(Loss) gain recognized in OCI	(107.3)	$ (44.4)	$ 117.1
Financial Services | Foreign-exchange contracts
Derivative [Line Items]
(Loss) gain recognized in OCI	$ (0.8)

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Loss (Gain) Recognized in Earnings to Derivatives not Designated as Hedging Instruments (Detail) - Foreign-exchange contracts - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
(Gain) loss recognized in earnings	$ 13.2	$ (4.1)	$ (6.6)
Truck, Parts and Other | Cost of sales and revenues
Derivative [Line Items]
(Gain) loss recognized in earnings	0.7	0.5	(0.3)
Truck, Parts and Other | Interest and other (income), net
Derivative [Line Items]
(Gain) loss recognized in earnings	2.3	5.4	6.9
Financial Services | Interest and other borrowing expenses
Derivative [Line Items]
(Gain) loss recognized in earnings	9.4	(10.1)	(14.9)
Financial Services | Selling, general and administrative
Derivative [Line Items]
(Gain) loss recognized in earnings	$ 0.8	$ 0.1	$ 1.7

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Fair Value Measurements - Additional Information (Detail)	Dec. 31, 2020 USD ($)
Fair Value Disclosures [Abstract]
Fair value of assets, transfers from Level 1 to Level 2	$ 0
Fair value of assets, transfers from Level 2 to Level 1	0
Fair value of liabilities, transfers from Level 1 to Level 2	0
Fair value of liabilities, transfers from Level 2 to Level 1	$ 0

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Financial Assets and Liabilities Subject to Recurring Fair Value Measurements (Detail) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	$ 20.5	$ 56.3
Derivative liabilities	159.9	44.3
Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	1,429.0	1,162.1
Derivative assets	20.5	56.3
Derivative liabilities	159.9	44.3
Fair Value, Measurements, Recurring | Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	86.5	128.4
Fair Value, Measurements, Recurring | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	1,342.5	1,033.7
Derivative assets	20.5	56.3
Derivative liabilities	159.9	44.3
Fair Value, Measurements, Recurring | Cross currency swaps
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	14.8	43.8
Derivative liabilities	77.6	13.5
Fair Value, Measurements, Recurring | Cross currency swaps | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	14.8	43.8
Derivative liabilities	77.6	13.5
Fair Value, Measurements, Recurring | Interest-rate swaps
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	1.6	2.0
Derivative liabilities	38.5	17.5
Fair Value, Measurements, Recurring | Interest-rate swaps | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	1.6	2.0
Derivative liabilities	38.5	17.5
Fair Value, Measurements, Recurring | Foreign-exchange contracts
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	4.1	10.5
Derivative liabilities	43.8	13.3
Fair Value, Measurements, Recurring | Foreign-exchange contracts | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	4.1	10.5
Derivative liabilities	43.8	13.3
U.S. tax-exempt securities | Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	392.4	320.2
U.S. tax-exempt securities | Fair Value, Measurements, Recurring | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	392.4	320.2
U.S. corporate securities | Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	232.9	165.7
U.S. corporate securities | Fair Value, Measurements, Recurring | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	232.9	165.7
U.S. government and agency securities | Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	94.4	129.3
U.S. government and agency securities | Fair Value, Measurements, Recurring | Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	86.5	128.4
U.S. government and agency securities | Fair Value, Measurements, Recurring | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	7.9	0.9
Non-U.S. corporate securities | Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	411.5	349.8
Non-U.S. corporate securities | Fair Value, Measurements, Recurring | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	411.5	349.8
Non-U.S. government securities | Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	77.5	72.4
Non-U.S. government securities | Fair Value, Measurements, Recurring | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	77.5	72.4
Other debt securities | Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	220.3	124.7
Other debt securities | Fair Value, Measurements, Recurring | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable debt securities (amortized cost: 2020 - $1,409.7, 2019 - $1,154.0; allowance for credit losses: none)	$ 220.3	$ 124.7

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Carrying Amount and Fair Value of Financial Services Fixed-Rate Loans and Fixed-Rate Debt (Detail) - Financial Services - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Assets, carrying amount
Fixed-rate loans	$ 5,319.2	$ 4,914.4
Liabilities, carrying amount
Fixed-rate debt	6,482.0	5,925.9
Assets, Fair Value
Fixed-rate loans	5,429.5	4,992.2
Liabilities, Fair Value
Fixed-rate debt	$ 6,648.6	$ 5,990.7

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Stock Compensation Plans - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of option granted	$ 6.4	$ 7.3	$ 6.3
Fair value of option vested	5.0	$ 5.8	$ 5.3
Unrecognized compensation cost related to unvested stock	$ 5.4
Recognized over a remaining weighted-average vesting period (year)	1 year 5 months 15 days
Stock options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options expiration term from the grant date (in years)	10 years
Stock options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)	3 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to unvested stock	$ 2.0
Recognized over a remaining weighted-average vesting period (year)	1 year 3 months 3 days
Restricted Stock Units (RSUs) | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)	3 years
Stock Options and Restricted Stock Units (RSUs) | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock authorized for issuance	46,700,000
Shares available for future grants	11,800,000

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Assumptions Used in Determining Fair Value of Option Awards (Detail) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Risk-free interest rate	1.54%	2.55%	2.64%
Expected volatility	23.00%	23.00%	23.00%
Expected dividend yield	4.10%	4.90%	3.80%
Expected term	6 years	6 years	6 years
Weighted average grant date fair value of options per share	$ 10.02	$ 8.26	$ 10.67

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Summary of Activity Under Stock Plans (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Intrinsic value of options exercised	$ 26.9	$ 31.9	$ 13.4
Cash received from stock option exercises	53.8	60.9	19.7
Tax benefit related to stock award exercises	3.8	3.8	2.4
Stock-based compensation	13.0	15.1	13.2
Tax benefit related to stock-based compensation	$ 1.6	$ 1.9	$ 1.9

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Summary of Options (Detail) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) $ / shares shares
NUMBER OF SHARES
Options outstanding, beginning balance | shares	3,488,300
Granted | shares	641,700
Exercised | shares	(949,900)
Cancelled | shares	(63,600)
Options outstanding, ending balance | shares	3,116,500
Vested and expected to vest, end of period | shares	3,014,300
Exercisable, end of period | shares	1,323,200
PER SHARE EXERCISE PRICE
Options outstanding, beginning balance | $ / shares	$ 60.18	[1]
Granted | $ / shares	76.18	[1]
Exercised | $ / shares	56.68	[1]
Cancelled | $ / shares	69.75	[1]
Options outstanding, ending balance | $ / shares	64.34	[1]
Vested and expected to vest, end of period | $ / shares	64.06	[1]
Exercisable, end of period | $ / shares	$ 56.63	[1]
REMAINING CONTRACTUAL LIFE IN YEARS
Options outstanding, ending balance	6 years 5 months 23 days	[1]
Vested and expected to vest, end of period	6 years 4 months 24 days	[1]
Exercisable, end of period	4 years 1 month 24 days	[1]
AGGREGATE INTRINSIC VALUE
Options outstanding, ending balance | $	$ 68.4
Vested and expected to vest, end of period | $	67.0
Exercisable, end of period | $	$ 39.2

[1] Weighted Average

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Summary of Nonvested Restricted Shares Activity (Detail) - Restricted Stock Units (RSUs)	12 Months Ended
	Dec. 31, 2020 $ / shares shares
GRANT DATE FAIR VALUE
Nonvested awards outstanding, beginning balance | $ / shares	$ 65.92	[1]
Granted | $ / shares	76.78	[1]
Vested | $ / shares	69.46	[1]
Forfeited | $ / shares	71.47	[1]
Nonvested awards outstanding, ending balance | $ / shares	$ 70.49	[1]
NONVESTED NUMBER OF SHARES
Nonvested awards outstanding, beginning balance | shares	150,500
Granted | shares	94,400
Vested | shares	(96,700)
Forfeited | shares	(5,800)
Nonvested awards outstanding, ending balance | shares	142,400

[1] Weighted Average

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Dilutive and Antidilutive Options (Detail) - shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Earnings Per Share [Abstract]
Additional shares	607,800	621,300	785,100
Antidilutive options	686,100	1,489,400	1,176,600

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Segment and Related Information - Additional Information (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) Segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Segment Reporting Information [Line Items]
Reportable segments | Segment	3
Investment income (expense)	$ 35.9	$ 82.3	$ 60.9
Other Segments | Intersegment
Segment Reporting Information [Line Items]
Investment income (expense)	$ 1.4	$ 0.3	$ (0.3)

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Geographical Area Data Recorded to Consolidated (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Net sales and revenues	$ 18,728.5	$ 25,599.7	$ 23,495.7
Property, plant and equipment, net	3,270.4	2,883.8	2,480.9
Equipment on operating leases, net	3,584.7	3,648.1	3,641.6
United States
Segment Reporting Information [Line Items]
Net sales and revenues	10,526.6	15,119.3	13,165.7
Property, plant and equipment, net	1,633.0	1,556.4	1,353.8
Equipment on operating leases, net	1,219.0	1,390.1	1,405.1
Europe
Segment Reporting Information [Line Items]
Net sales and revenues	4,871.2	6,104.7	6,071.9
Other Countries
Segment Reporting Information [Line Items]
Net sales and revenues	3,330.7	4,375.7	4,258.1
Property, plant and equipment, net	542.2	531.9	491.9
Equipment on operating leases, net	571.7	531.0	614.4
Belgium
Segment Reporting Information [Line Items]
Property, plant and equipment, net	596.2	395.7	237.4
The Netherlands
Segment Reporting Information [Line Items]
Property, plant and equipment, net	499.0	399.8	397.8
Poland
Segment Reporting Information [Line Items]
Equipment on operating leases, net	359.4	343.5	327.8
France
Segment Reporting Information [Line Items]
Equipment on operating leases, net	349.7	315.0	246.8
Germany
Segment Reporting Information [Line Items]
Equipment on operating leases, net	346.4	358.3	361.0
Spain
Segment Reporting Information [Line Items]
Equipment on operating leases, net	310.8	276.1	249.8
Mexico
Segment Reporting Information [Line Items]
Equipment on operating leases, net	302.3	320.5	306.4
United Kingdom
Segment Reporting Information [Line Items]
Equipment on operating leases, net	$ 125.4	$ 113.6	$ 130.3

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Segment Reporting Information by Segment (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Revenues	$ 18,728.5	$ 25,599.7	$ 23,495.7
Income (loss) before income taxes	1,657.9	3,099.2	2,810.2
Investment income	35.9	82.3	60.9
Depreciation and amortization	1,049.0	1,077.3	1,054.1
Expenditures for long-lived assets	1,657.5	2,140.7	1,931.8
Assets	28,260.0	28,361.1	25,482.4
Truck, Parts and Other
Segment Reporting Information [Line Items]
Net sales and revenues	17,154.3	24,119.7	22,138.6
Income (loss) before income taxes	1,398.9	2,718.0	2,443.4
Depreciation and amortization	323.8	412.4	433.8
Expenditures for long-lived assets	610.8	762.1	846.7
Assets	12,460.2	12,289.7	11,082.8
Cash and marketable securities	4,834.0	5,169.4	4,299.6
Truck, Parts and Other | Trucks
Segment Reporting Information [Line Items]
Net sales and revenues	13,164.8	19,989.5	18,187.0
Income (loss) before income taxes	581.4	1,904.9	1,672.1
Depreciation and amortization	292.2	381.9	406.2
Expenditures for long-lived assets	556.0	664.9	778.5
Assets	5,971.9	5,609.0	5,347.3
Truck, Parts and Other | Trucks | Operating Segments
Segment Reporting Information [Line Items]
Net sales and revenues	13,643.0	20,403.5	18,863.1
Truck, Parts and Other | Trucks | Intersegment
Segment Reporting Information [Line Items]
Net sales and revenues	(478.2)	(414.0)	(676.1)
Truck, Parts and Other | Parts Subsegment
Segment Reporting Information [Line Items]
Net sales and revenues	3,912.9	4,024.9	3,838.9
Income (loss) before income taxes	799.3	830.8	768.6
Depreciation and amortization	10.8	10.2	9.2
Expenditures for long-lived assets	18.4	46.2	29.4
Assets	1,255.6	1,172.1	1,090.9
Truck, Parts and Other | Parts Subsegment | Operating Segments
Segment Reporting Information [Line Items]
Net sales and revenues	3,962.7	4,073.1	3,896.2
Truck, Parts and Other | Parts Subsegment | Intersegment
Segment Reporting Information [Line Items]
Net sales and revenues	(49.8)	(48.2)	(57.3)
Truck, Parts and Other | Other
Segment Reporting Information [Line Items]
Net sales and revenues	76.6	105.3	112.7
Income (loss) before income taxes	18.2	(17.7)	2.7
Depreciation and amortization	20.8	20.3	18.4
Expenditures for long-lived assets	36.4	51.0	38.8
Assets	398.7	339.2	345.0
Financial Services
Segment Reporting Information [Line Items]
Revenues	1,574.2	1,480.0	1,357.1
Income (loss) before income taxes	223.1	298.9	305.9
Depreciation and amortization	725.2	664.9	620.3
Expenditures for long-lived assets	1,046.7	1,378.6	1,085.1
Assets	$ 15,799.8	$ 16,071.4	$ 14,399.6

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Quarterly Results (Unaudited) (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Quarterly Financial Information [Line Items]
Revenues									$ 18,728.5	$ 25,599.7	$ 23,495.7
Net income	$ 405.8	$ 385.5	$ 147.7	$ 359.4	$ 531.3	$ 607.9	$ 619.7	$ 629.0	$ 1,298.4	$ 2,387.9	$ 2,195.1
Net Income Per Share
Basic	$ 1.17	$ 1.11	$ 0.43	$ 1.04	$ 1.53	$ 1.75	$ 1.79	$ 1.81	$ 3.74	$ 6.88	$ 6.25
Diluted	$ 1.17	$ 1.11	$ 0.43	$ 1.03	$ 1.53	$ 1.75	$ 1.78	$ 1.81	$ 3.74	$ 6.87	$ 6.24
Truck, Parts and Other
Quarterly Financial Information [Line Items]
Net sales and revenues	$ 5,136.0	$ 4,538.4	$ 2,701.9	$ 4,778.0	$ 5,710.9	$ 6,004.2	$ 6,266.5	$ 6,138.1	$ 17,154.3	$ 24,119.7
Cost of sales and revenues	4,487.0	3,958.3	2,441.5	4,189.6	4,890.0	5,106.8	5,341.7	5,217.1
Research and development	71.7	64.7	66.5	71.0	83.6	82.2	82.5	78.3
Financial Services
Quarterly Financial Information [Line Items]
Revenues	432.6	397.6	360.3	383.7	406.3	362.8	361.4	349.5
Interest and other borrowing expenses	43.6	45.2	46.9	56.4	57.5	59.6	60.0	53.4
Depreciation and other expenses	$ 292.0	$ 262.5	$ 224.1	$ 229.4	$ 241.9	$ 195.3	$ 183.6	$ 177.4