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 (§232.405 of this chapter) 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.

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, $1 par value — ~~347,767,575~~522,579,036 shares as of ~~October 25, 2022~~April 28, 2023

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30						September 30						March 31
	2022			2021			2022			2021			2023		2022
TRUCK, PARTS AND OTHER:
Net sales and revenues	$	6,687.0		$	4,737.7		$	19,579.6		$	15,538.8		$	8,050.1	$	6,106.4

Cost of sales and revenues		5,689.3			4,176.2			16,785.8			13,525.3			6,493.1		5,285.5
Research and development		82.9			72.5			241.3			237.0			97.2		78.0
Selling, general and administrative		137.7			134.7			430.6			396.8			159.8		148.0
Interest and other (income), net		(35.0	)		(11.2	)		(89.4	)		(41.6	)
Interest and other expenses (income), net														578.8		(32.0	)
		5,874.9			4,372.2			17,368.3			14,117.5			7,328.9		5,479.5
Truck, Parts and Other Income Before Income Taxes		812.1			365.5			2,211.3			1,421.3			721.2		626.9

FINANCIAL SERVICES:
Interest and fees		160.4			131.5			443.6			393.8			208.0		132.3
Operating lease, rental and other revenues		211.5			277.6			667.0			903.6			215.2		233.9
Revenues		371.9			409.1			1,110.6			1,297.4			423.2		366.2

Interest and other borrowing expenses		55.8			35.3			142.0			114.9			93.8		39.8
Depreciation and other expenses		137.4			219.8			426.3			779.0			142.3		143.5
Selling, general and administrative		33.3			33.9			100.9			97.3			35.2		35.7
Provision for losses on receivables		(.8	)					3.8			3.2			3.1		.2
		225.7			289.0			673.0			994.4			274.4		219.2
Financial Services Income Before Income Taxes		146.2			120.1			437.6			303.0			148.8		147.0
Investment income		21.4			1.6			24.3			11.5
Investment income (loss)														49.0		(2.5	)
Total Income Before Income Taxes		979.7			487.2			2,673.2			1,735.8			919.0		771.4
Income taxes		210.3			106.7			582.9			389.0			185.1		170.9
Net Income	$	769.4		$	380.5		$	2,090.3		$	1,346.8		$	733.9	$	600.5

Net Income Per Share
Basic	$	2.21		$	1.09		$	6.00		$	3.87		$	1.40	$	1.15
Diluted	$	2.21		$	1.09		$	5.99		$	3.87		$	1.40	$	1.15

Weighted Average Number of Common Shares Outstanding
Basic		348.4			347.8			348.4			347.7			523.5		522.4
Diluted		348.9			348.3			348.9			348.4			524.4		523.3

Comprehensive Income	$	488.0		$	264.9		$	1,618.3		$	1,251.9		$	814.1	$	643.9

					March 31		December 31
	September 30		December 31		2023		2022 *
	2022		2021		(Unaudited)
ASSETS

TRUCK, PARTS AND OTHER:
Current Assets
Cash and cash equivalents	$	3,218.7	$	3,253.6	$	4,283.3	$	4,544.7
Trade and other receivables, net (allowance for losses: 2022 - $.5, 2021 - $.6)		2,018.5		1,575.1
Trade and other receivables, net (allowance for losses: 2023 - $.7, 2022 - $.6)						2,347.0		1,919.8
Marketable securities		1,544.2		1,559.4		1,638.9		1,614.2
Inventories, net		2,382.1		1,976.0		2,609.2		2,198.8
Other current assets		719.7		732.9		771.2		682.0
Total Truck, Parts and Other Current Assets		9,883.2		9,097.0		11,649.6		10,959.5

Equipment on operating leases, net		208.6		302.4		176.1		190.8
Property, plant and equipment, net		3,299.4		3,398.1		3,511.6		3,468.4
Other noncurrent assets, net		1,307.6		1,293.0		1,579.3		1,477.2
Total Truck, Parts and Other Assets		14,698.8		14,090.5		16,916.6		16,095.9

FINANCIAL SERVICES:
Cash and cash equivalents		104.8		174.7		126.8		146.2
Finance and other receivables, net (allowance for losses: 2022 - $117.9, 2021 - $116.9)		12,549.2		11,920.8
Finance and other receivables, net (allowance for losses: 2023 - $123.8, 2022 - $121.1)						14,541.7		13,791.9
Equipment on operating leases, net		2,545.9		2,886.5		2,527.1		2,612.5
Other assets		724.9		436.9		714.2		629.0
Total Financial Services Assets		15,924.8		15,418.9		17,909.8		17,179.6
	$	30,623.6	$	29,509.4	$	34,826.4	$	33,275.5

* The December 31, 2022 consolidated balance sheet has been derived from audited financial statements.

							March 31			December 31
	September 30			December 31			2023			2022 *
	2022			2021			(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY

TRUCK, PARTS AND OTHER:
Current Liabilities
Accounts payable, accrued expenses and other	$	4,381.8		$	3,930.9		$	5,438.5		$	4,511.7
Dividend payable					521.1						974.6
Total Truck, Parts and Other Current Liabilities		4,381.8			4,452.0			5,438.5			5,486.3
Residual value guarantees and deferred revenues		227.0			329.1			193.5			209.2
Other liabilities		1,363.0			1,487.6			1,882.2			1,490.1
Total Truck, Parts and Other Liabilities		5,971.8			6,268.7			7,514.2			7,185.6

FINANCIAL SERVICES:
Accounts payable, accrued expenses and other		792.7			624.5			868.9			826.8
Commercial paper and bank loans		3,295.6			3,303.0			3,858.8			3,604.9
Term notes		7,082.3			7,128.8			8,057.0			7,866.7
Deferred taxes and other liabilities		587.7			590.4			645.5			624.4
Total Financial Services Liabilities		11,758.3			11,646.7			13,430.2			12,922.8

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 347.8 and 347.3 million shares		347.8			347.3
Common stock, $1 par value - authorized 1.2 billion shares, issued 522.6 and 522.0 million shares								522.6			522.0
Additional paid-in capital		180.0			142.0			230.3			196.1
Treasury stock, at cost - .02 million and nil shares		(2.0	)
Treasury stock, at cost - .04 million and nil shares								(3.0	)
Retained earnings		13,760.8			12,025.8			14,005.3			13,402.4
Accumulated other comprehensive loss		(1,393.1	)		(921.1	)		(873.2	)		(953.4	)
Total Stockholders' Equity		12,893.5			11,594.0			13,882.0			13,167.1
	$	30,623.6		$	29,509.4		$	34,826.4		$	33,275.5

* The December 31, 2022 consolidated balance sheet has been derived from audited financial statements.

	Nine Months Ended						Three Months Ended
	September 30						March 31
	2022			2021			2023			2022
OPERATING ACTIVITIES:
Net Income	$	2,090.3		$	1,346.8		$	733.9		$	600.5
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization:
Property, plant and equipment		239.7			197.5			103.0			74.0
Equipment on operating leases and other		345.9			494.8			118.1			111.7
Provision for losses on financial services receivables		3.8			3.2			3.1			.2
Other, net		(187.2	)		(239.9	)		(58.5	)		(140.7	)
Pension contributions		(34.3	)		(19.2	)		(5.8	)		(6.7	)
Change in operating assets and liabilities:
Trade and other receivables		(561.5	)		(309.0	)		(448.6	)		(381.0	)
Wholesale receivables on new trucks		(577.8	)		587.7			(451.2	)		(327.4	)
Inventories		(523.5	)		(1,349.2	)		(401.7	)		(230.9	)
Accounts payable and accrued expenses		937.0			506.8			663.1			550.3
Income taxes, warranty and other		45.8			(69.3	)		429.4			209.3
Net Cash Provided by Operating Activities		1,778.2			1,150.2			684.8			459.3

INVESTING ACTIVITIES:
Originations of retail loans and finance leases		(3,559.5	)		(3,379.3	)		(1,199.3	)		(1,221.0	)
Collections on retail loans and finance leases		2,932.3			2,991.0			1,030.3			974.1
Net (increase) decrease in wholesale receivables on used equipment		(15.2	)		12.5
Net increase in wholesale receivables on used equipment								(9.9	)		(1.6	)
Purchases of marketable debt securities		(723.8	)		(693.8	)		(217.5	)		(207.7	)
Proceeds from sales and maturities of marketable debt securities		591.5			542.7			206.6			203.9
Payments for property, plant and equipment		(393.7	)		(381.3	)		(138.7	)		(138.4	)
Acquisitions of equipment for operating leases		(688.1	)		(790.5	)		(153.1	)		(230.2	)
Proceeds from asset disposals		511.3			686.1			171.4			188.1
Other, net		26.7			(12.8	)		17.5			26.7
Net Cash Used in Investing Activities		(1,318.5	)		(1,025.4	)		(292.7	)		(406.1	)

FINANCING ACTIVITIES:
Payments of cash dividends		(875.9	)		(589.9	)		(1,105.3	)		(639.4	)
Purchases of treasury stock		(2.0	)		(1.5	)		(3.0	)		(1.9	)
Proceeds from stock compensation transactions		21.7			30.1			20.5			16.7
Net increase (decrease) in commercial paper, short-term bank loans and other		227.3			(303.5	)
Net increase in commercial paper, short-term bank loans and other								209.6			481.6
Proceeds from term debt		2,302.7			1,802.1			826.1			631.7
Payments on term debt		(2,092.7	)		(2,327.2	)		(638.7	)		(645.1	)
Net Cash Used in Financing Activities		(418.9	)		(1,389.9	)		(690.8	)		(156.4	)
Effect of exchange rate changes on cash and cash equivalents		(145.6	)		(46.7	)		17.9			(10.2	)
Net Decrease in Cash and Cash Equivalents		(104.8	)		(1,311.8	)		(280.8	)		(113.4	)
Cash and cash equivalents at beginning of period		3,428.3			3,539.6			4,690.9			3,428.3
Cash and cash equivalents at end of period	$	3,323.5		$	2,227.8		$	4,410.1		$	3,314.9

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30						September 30						March 31
	2022			2021			2022			2021			2023			2022
COMMON STOCK, $1 PAR VALUE:
Balance at beginning of period	$	347.7		$	347.2		$	347.3		$	346.6		$	522.0		$	347.3
Stock compensation		.1						.5			.6			.6			.4
Balance at end of period		347.8			347.2			347.8			347.2			522.6			347.7

ADDITIONAL PAID-IN CAPITAL:
Balance at beginning of period		174.0			128.9			142.0			88.5			196.1			142.0
Stock compensation		6.0			2.9			38.0			43.3			34.2			25.3
Balance at end of period		180.0			131.8			180.0			131.8			230.3			167.3

TREASURY STOCK, AT COST:
Balance at beginning of period		(1.9	)		(1.4	)
Purchases		(.1	)		(.1	)		(2.0	)		(1.5	)		(3.0	)		(1.9	)
Balance at end of period		(2.0	)		(1.5	)		(2.0	)		(1.5	)		(3.0	)		(1.9	)

RETAINED EARNINGS:
Balance at beginning of period		13,109.9			11,885.2			12,025.8			11,148.5			13,402.4			12,025.8
Net income		769.4			380.5			2,090.3			1,346.8			733.9			600.5
Cash dividends declared on common stock		(118.5	)		(118.2	)		(355.3	)		(347.8	)		(131.0	)		(118.4	)
Balance at end of period		13,760.8			12,147.5			13,760.8			12,147.5			14,005.3			12,507.9

ACCUMULATED OTHER COMPREHENSIVE LOSS:
Balance at beginning of period		(1,111.7	)		(1,029.6	)		(921.1	)		(1,050.3	)		(953.4	)		(921.1	)
Other comprehensive loss		(281.4	)		(115.6	)		(472.0	)		(94.9	)
Other comprehensive income														80.2			43.4
Balance at end of period		(1,393.1	)		(1,145.2	)		(1,393.1	)		(1,145.2	)		(873.2	)		(877.7	)
Total Stockholders’ Equity	$	12,893.5		$	11,479.8		$	12,893.5		$	11,479.8		$	13,882.0		$	12,143.3

Cash dividends declared on common stock, per share	$	.34		$	.34		$	1.02		$	1.00		$	.25		$	.23

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2022.~~2023. For further information, refer to the consolidated financial statements and footnotes included in PACCAR Inc’s (PACCAR or the Company) Annual Report on Form 10‑K for the year ended December 31, ~~2021.~~2022.

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.

On December 6, 2022, the Board of Directors declared a 50% common stock dividend which was paid on February 7, 2023, to stockholders of record on January 17, 2023, with fractional shares paid in cash. This resulted in the issuance of 174,035,361 additional shares and 411 fractional shares paid in cash. For all years presented, net income per share, weighted average number of common shares outstanding and cash dividends declared per share on common stock have been restated for the effect of the 50% dividend.

~~Change in Accounting:~~ In the first quarter of 2022, the Company changed the method of accounting for its U.S. inventories from last-in-first-out (LIFO) to first-in-first-out (FIFO). Inventories valued using the LIFO method comprised 41% of consolidated inventories before deducting the LIFO reserve at December 31, 2021. The Company believes the FIFO method is preferable because it better matches cost with revenues, it results in a more consistent method to value inventory with its foreign subsidiaries and it improves comparability with industry peers. This change increased Retained Earnings by $143.3 million to $11,148.5 million at January 1, 2021. The effects of the change in accounting principle have been retrospectively applied to all periods presented:

~~The effect of the changes made to the Company’s Consolidated Statements of Comprehensive Income was as follows:~~

~~The cumulative effect of the changes made to the Company’s Consolidated Balance Sheet was as follows:~~

The change in accounting policy did not materially affect basic or diluted net income per share or income before income taxes within the Truck, Parts and Other segments for the three and nine months ended September 30, 2021. There was no impact on total net cash provided by operating activities.

~~The following table compares the amounts currently reported to amounts that would have been reported under LIFO in the Consolidated Statements of Comprehensive Income.~~

The effect of the change to income before income taxes within the Truck, Parts and Other segments for the three months and nine months ended September 30, 2022 would not be material. In addition, there would be no material effect on the Consolidated Statements of Cash Flows.

~~The following table compares the amounts currently reported to amounts that would have been reported under LIFO in the Consolidated Balance Sheet.~~

New Accounting Pronouncements: The Company adopted ~~the following standards~~ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures on January 1, ~~2022,~~2023, which had no material impact on the Company’s consolidated financial statements.

The Financial Accounting Standards Board ~~(FASB) also~~ issued ~~the following standards, which are~~ASU 2022-03, Fair Value Measurement (Topic 820)—Fair Value Measurement of Equity Securities Subject to Contractual Sale Restriction in 2022. The Company plans on adopting this standard on January 1, 2024, and is not expected to have a material impact on the Company’s consolidated financial statements.

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

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2022		2021		2022		2021
Three Months Ended March 31,									2023		2022
Truck
Truck sales	$	4,991.4	$	3,258.3	$	14,602.7	$	11,253.7	$	6,206.0	$	4,481.1
Revenues from extended warranties, operating leases and other		206.8		194.3		629.0		584.1		207.8		216.0
		5,198.2		3,452.6		15,231.7		11,837.8		6,413.8		4,697.1
Parts
Parts sales		1,429.3		1,226.1		4,171.9		3,528.1		1,574.2		1,348.1
Revenues from dealer services and other		42.2		34.1		123.2		104.1		48.8		40.8
		1,471.5		1,260.2		4,295.1		3,632.2		1,623.0		1,388.9
Winch sales and other		17.3		24.9		52.8		68.8		13.3		20.4
Truck, Parts and Other sales and revenues	$	6,687.0	$	4,737.7	$	19,579.6	$	15,538.8	$	8,050.1	$	6,106.4

The Company recognizes truck and parts sales as revenues 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 parts 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~~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 an~~ ~~eight-year~~ ~~period.~~rate.

Aftermarket parts sales allow for returns which are estimated at the time of sale based on historical data. Parts dealer services and other revenues are recognized as services are performed.

The following table presents the balance sheet classification of the estimated value of the ~~truck assets to be~~ returned goods assets and the related return liabilities:

	September 30, 2022				December 31, 2021				March 31, 2023				December 31, 2022
	ASSETS		LIABILITIES		ASSETS		LIABILITIES		ASSETS		LIABILITIES		ASSETS		LIABILITIES
Trucks
Other current assets	$	177.8			$	255.7			$	196.6			$	183.0
Accounts payable, accrued expenses and other			$	180.5			$	264.0			$	198.1			$	185.0
Other noncurrent assets, net		290.8				403.6				261.2				284.6
Other liabilities				304.9				423.9				274.3				298.9
	$	468.6	$	485.4	$	659.3	$	687.9	$	457.8	$	472.4	$	467.6	$	483.9
Parts
Other current assets	$	82.0			$	72.9			$	83.9			$	77.7
Accounts payable, accrued expenses and other			$	193.5			$	172.1			$	199.2			$	181.4
	$	82.0	$	193.5	$	72.9	$	172.1	$	83.9	$	199.2	$	77.7	$	181.4

~~For contracts accounted for as a sale, the~~The Company’s total commitment to acquire trucks at a guaranteed value for contracts accounted for as a sale was ~~$934.3~~$943.3 at ~~September 30, 2022.~~March 31, 2023.

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 F, 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. Deferred revenue related to trucks sold with an RVG was ~~$52.7~~$38.8 at ~~September 30, 2022.~~March 31, 2023. The Company expects to recognize approximately ~~$7.6~~$19.7 of the remaining deferred revenue in ~~2022, $24.3 in~~ 2023, ~~$13.1~~$14.1 in 2024, ~~$4.8~~$3.4 in 2025, $1.4 in 2026 and ~~$2.9~~$.2 in ~~2026. For the three and nine months ended September 30, 2022, total~~2027. Total operating lease revenue from truck sales with RVGs was ~~$29.3~~$12.8 and ~~$79.2, respectively compared to $24.9 and $75.2~~$27.9 for the three ~~and nine~~ months ended ~~September 30, 2021.~~March 31, 2023 and 2022, respectively. The Company’s total commitment to acquire trucks at a guaranteed value for contracts accounted for as a lease was ~~$174.3~~$154.7 at ~~September 30, 2022.~~March 31, 2023.

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.

The Company’s Financial Services segment products include loans to customers collateralized by the vehicles being financed, finance leases for 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.

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 ~~September 30, 2022~~March 31, 2023 or December 31, ~~2021.~~2022. 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.

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2022		2021		2022		2021
Three Months Ended March 31,									2023		2022
Finance lease revenues	$	46.6	$	46.7	$	134.5	$	142.8	$	54.9	$	42.9
Operating lease revenues		192.4		206.4		595.7		627.9		196.8		203.6
Total lease revenues	$	239.0	$	253.1	$	730.2	$	770.7	$	251.7	$	246.5

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.

Marketable equity securities are traded on active exchanges and are measured at fair value. The realized and unrealized gains (losses) are recognized in investment income.

Marketable securities at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 consisted of the following:

			UNREALIZED	UNREALIZED		FAIR				UNREALIZED		UNREALIZED		FAIR
At September 30, 2022	COST		GAINS	LOSSES		VALUE
At March 31, 2023								COST		GAINS		LOSSES		VALUE
Marketable debt securities
U.S. tax-exempt securities	$	455.5		$	12.6	$	442.9	$	418.2	$	.6	$	5.5	$	413.3
U.S. taxable municipal / non-U.S. provincial bonds		187.5			11.4	��	176.1		207.9		.1		8.6		199.4
U.S. corporate securities		249.3			13.8		235.5		281.7		.5		9.4		272.8
U.S. government and agency securities		112.3			3.3		109.0		134.4		.4		2.0		132.8
Non-U.S. corporate securities		428.0			19.7		408.3		449.4		.2		14.7		434.9
Non-U.S. government securities		73.1			3.0		70.1		83.7		.2		2.1		81.8
Other debt securities		104.8			5.0		99.8		106.3		.1		3.9		102.5
Marketable equity securities		15.4			12.9		2.5		10.0				8.6		1.4
Total marketable securities	$	1,625.9		$	81.7	$	1,544.2	$	1,691.6	$	2.1	$	54.8	$	1,638.9

			UNREALIZED		UNREALIZED		FAIR				UNREALIZED		UNREALIZED		FAIR
At December 31, 2021	COST		GAINS		LOSSES		VALUE
At December 31, 2022									COST		GAINS		LOSSES		VALUE
Marketable debt securities
U.S. tax-exempt securities	$	431.4	$	1.5	$	.4	$	432.5	$	452.8	$	.5	$	8.2	$	445.1
U.S. taxable municipal / non-U.S. provincial bonds		192.2		.6		1.2		191.6		191.6				10.8		180.8
U.S. corporate securities		208.3		.6		1.5		207.4		262.5		.1		11.6		251.0
U.S. government and agency securities		95.9		.6		.1		96.4		118.0		.1		3.1		115.0
Non-U.S. corporate securities		443.9		1.4		2.5		442.8		467.9				17.9		450.0
Non-U.S. government securities		75.2		.1		.3		75.0		78.9		.2		2.7		76.4
Other debt securities		100.4		.3		.7		100.0		99.4				4.7		94.7
Marketable equity securities		15.4		1.3		3.0		13.7		10.0				8.8		1.2
Total marketable securities	$	1,562.7	$	6.4	$	9.7	$	1,559.4	$	1,681.1	$	.9	$	67.8	$	1,614.2

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 $.5 and ~~$1.6~~$.4 and gross realized losses were ~~$1.5~~$1.6 and ~~$.1~~$.4 for the ~~nine~~three months periods ended ~~September 30, 2022~~March 31, 2023 and ~~2021,~~2022, respectively.

Net realized gains on marketable equity securities were $.2 and nil for the three months periods ending March 31, 2023 and 2022, respectively.

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

	September 30, 2022				December 31, 2021				March 31, 2023				December 31, 2022
	LESS THAN		TWELVE MONTHS		LESS THAN		TWELVE MONTHS		LESS THAN		TWELVE MONTHS		LESS THAN		TWELVE MONTHS
	TWELVE MONTHS		OR GREATER		TWELVE MONTHS		OR GREATER		TWELVE MONTHS		OR GREATER		TWELVE MONTHS		OR GREATER
Unrealized losses									$	6.7	$	39.5	$	21.5	$	37.5
Fair value	$	1,231.6	$	281.0	$	911.2	$	1.3		498.0		841.4		889.2		608.4
Unrealized losses		47.4		21.4		6.7

The unrealized losses on marketable debt securities 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 ~~September 30, 2022~~March 31, 2023 and

December 31, ~~2021.~~2022. 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 of marketable debt securities at ~~September 30, 2022~~March 31, 2023 were as follows:

	AMORTIZED		FAIR		AMORTIZED		FAIR
	COST		VALUE		COST		VALUE
Within one year	$	448.4	$	442.4	$	472.9	$	467.4
One to five years		1,139.6		1,078.6		1,179.6		1,142.5
Six to ten years		9.0		8.9		1.8		1.7
More than ten years		13.5		11.8		27.3		25.9
	$	1,610.5	$	1,541.7	$	1,681.6	$	1,637.5

Inventories are stated at the lower of cost or market. Cost of inventories is determined principally by the first-in, first-out (FIFO) method.

	September 30		December 31		March 31		December 31
	2022		2021		2023		2022
Finished products	$	826.5	$	676.0	$	1,022.5	$	871.8
Work in process and raw materials		1,555.6		1,300.0		1,586.7		1,327.0
	$	2,382.1	$	1,976.0	$	2,609.2	$	2,198.8

In the first quarter of 2022, the Company changed the method of accounting for its U.S. inventories from last-in-first-out (LIFO) to first-in-first-out (FIFO) and all prior periods have been retrospectively applied. See Note A - Basis of Presentation of this Quarterly Report on Form 10-Q.

	September 30			December 31			March 31			December 31
	2022			2021			2023			2022
Loans	$	6,750.4		$	6,424.7		$	7,274.7		$	7,229.1
Finance leases		3,472.4			3,620.6			3,991.1			3,786.4
Dealer wholesale financing		2,307.8			1,865.8			3,251.9			2,772.1
Operating lease receivables and other		136.5			126.6			147.8			125.4
		12,667.1			12,037.7			14,665.5			13,913.0
Less allowance for losses:
Loans and leases		(111.3	)		(111.5	)		(117.1	)		(114.8	)
Dealer wholesale financing		(3.5	)		(3.3	)		(3.6	)		(3.4	)
Operating lease receivables and other		(3.1	)		(2.1	)		(3.1	)		(2.9	)
	$	12,549.2		$	11,920.8		$	14,541.7		$	13,791.9

Included in Finance and other receivables, net on the Consolidated Balance Sheets is accrued interest receivable (net of allowance for credit losses) of ~~$44.3~~$58.9 and ~~$27.7~~$44.1 as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The net activity of dealer direct loans and dealer wholesale financing on new trucks is shown in the operating section of the Condensed Consolidated Statements of Cash Flows since those receivables finance the sale of Company inventory.

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.~~

On average, modifications extended contractual terms by approximatelyfour months in 2023 and three months in 2022, ~~and four months in 2021,~~ and did not have a significant effect on the weighted average term or interest rate of the total portfolio at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022.

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.~~expected credit losses. 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. AIn general, 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 overreceivables that are 90 days past due are ~~considered impaired. Generally, impaired accounts are~~placed on non-accrual status. ~~Impaired accounts classified as TDRs~~Finance receivables on non-accrual status 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~~Individually evaluated receivables on non-accrual status are generally considered collateral dependent. Large balance retail and all wholesale ~~impaired~~ receivables on non-accrual status are individually evaluated to determine the appropriate reserve for losses. The determination of reserves for large balance ~~impaired~~ receivables on non-accrual status 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 on non-accrual status 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~~evaluated 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~~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.

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 five or more 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.

	2022															2023
	DEALER						CUSTOMER									DEALER					CUSTOMER
	WHOLESALE			RETAIL			RETAIL			OTHER*			TOTAL			WHOLESALE		RETAIL			RETAIL			OTHER*			TOTAL
Balance at January 1	$	3.3		$	7.1		$	104.4		$	2.1		$	116.9		$	3.4	$	2.2		$	112.6		$	2.9		$	121.1
Provision for losses		.4			(3.3	)		8.1			(1.4	)		3.8			.2		(.1	)		3.0						3.1
Charge-offs								(6.3	)		(.1	)		(6.4	)							(3.3	)		(.1	)		(3.4	)
Recoveries		.1						5.2			1.8			7.1								1.4			.1			1.5
Currency translation and other		(.3	)					(3.9	)		.7			(3.5	)							1.3			.2			1.5
Balance at September 30	$	3.5		$	3.8		$	107.5		$	3.1		$	117.9
Balance at March 31																$	3.6	$	2.1		$	115.0		$	3.1		$	123.8

	2021															2022
	DEALER						CUSTOMER									DEALER					CUSTOMER
	WHOLESALE			RETAIL			RETAIL			OTHER*			TOTAL			WHOLESALE		RETAIL			RETAIL			OTHER*			TOTAL
Balance at January 1	$	3.4		$	8.4		$	112.0		$	3.2		$	127.0		$	3.3	$	7.1		$	104.4		$	2.1		$	116.9
Provision for losses		(1.0	)		(.7	)		3.5			1.4			3.2			.4		(1.9	)		1.2			.5			.2
Charge-offs								(9.7	)		(1.3	)		(11.0	)							(2.5	)		(.1	)		(2.6	)
Recoveries								4.1			.2			4.3								1.9						1.9
Currency translation and other								(1.7	)		(.1	)		(1.8	)							1.0			.9			1.9
Balance at September 30	$	2.4		$	7.7		$	108.2		$	3.4		$	121.7
Balance at March 31																$	3.7	$	5.2		$	106.0		$	3.4		$	118.3

The Company's customers are principally concentrated in the transportation industry in North America, Europe, Australia and Brasil. 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.~~collateral dependent. At-risk accounts are ~~accounts that are impaired,~~collateral dependent, including ~~TDRs,~~ accounts over 90 days past due and other accounts on non-accrual status.

The tables below summarize the amortized cost basis of the Company’s finance receivables within each credit quality indicator by year of origination and portfolio class and current period gross charge-offs of the Company’s finance receivables by year of origination and portfolio class.

	REVOLVING																REVOLVING
At September 30, 2022	LOANS		2022		2021		2020		2019		2018		PRIOR		TOTAL
At March 31, 2023																	LOANS		2023		2022		2021		2020		2019		PRIOR		TOTAL
Amortized cost:
Dealer:
Wholesale:
Performing	$	2,304.8													$	2,304.8	$	3,244.4													$	3,244.4
Watch		3.0														3.0		7.5														7.5
	$	2,307.8													$	2,307.8	$	3,251.9													$	3,251.9
Retail:
Performing	$	197.0	$	374.2	$	371.3	$	239.7	$	263.3	$	133.1	$	140.3	$	1,718.9	$	164.7	$	145.3	$	588.7	$	328.6	$	208.4	$	221.7	$	208.1	$	1,865.5
At-risk														.8		.8														.5		.5
	$	197.0	$	374.2	$	371.3	$	239.7	$	263.3	$	133.1	$	141.1	$	1,719.7	$	164.7	$	145.3	$	588.7	$	328.6	$	208.4	$	221.7	$	208.6	$	1,866.0
Total dealer	$	2,504.8	$	374.2	$	371.3	$	239.7	$	263.3	$	133.1	$	141.1	$	4,027.5	$	3,416.6	$	145.3	$	588.7	$	328.6	$	208.4	$	221.7	$	208.6	$	5,117.9

Customer retail:
Fleet:
Performing			$	2,468.8	$	2,121.2	$	1,404.3	$	702.3	$	264.2	$	135.4	$	7,096.2			$	938.3	$	3,397.9	$	1,827.2	$	1,180.9	$	527.2	$	204.6	$	8,076.1
Watch				2.4		6.1		4.5		4.1		2.5		.6		20.2				.3		2.9		3.6		2.3		.9		1.2		11.2
At-risk				6.4		16.5		13.0		19.7		7.1		1.2		63.9						18.4		19.1		11.2		9.3		3.3		61.3
			$	2,477.6	$	2,143.8	$	1,421.8	$	726.1	$	273.8	$	137.2	$	7,180.3			$	938.6	$	3,419.2	$	1,849.9	$	1,194.4	$	537.4	$	209.1	$	8,148.6
Owner/operator:
Performing			$	386.3	$	451.4	$	273.3	$	135.7	$	56.0	$	13.6	$	1,316.3			$	119.7	$	422.1	$	366.5	$	207.2	$	94.8	$	31.9	$	1,242.2
Watch				.9		.6		.8		.4		.2				2.9				.2		2.4		1.3		.7		.2		.2		5.0
At-risk				.1		.6		.9		1.1		.8		.1		3.6				.1		.8		.8		1.3		.5		.5		4.0
			$	387.3	$	452.6	$	275.0	$	137.2	$	57.0	$	13.7	$	1,322.8			$	120.0	$	425.3	$	368.6	$	209.2	$	95.5	$	32.6	$	1,251.2
Total customer retail			$	2,864.9	$	2,596.4	$	1,696.8	$	863.3	$	330.8	$	150.9	$	8,503.1			$	1,058.6	$	3,844.5	$	2,218.5	$	1,403.6	$	632.9	$	241.7	$	9,399.8

Total	$	2,504.8	$	3,239.1	$	2,967.7	$	1,936.5	$	1,126.6	$	463.9	$	292.0	$	12,530.6	$	3,416.6	$	1,203.9	$	4,433.2	$	2,547.1	$	1,612.0	$	854.6	$	450.3	$	14,517.7

	REVOLVING																REVOLVING
At December 31, 2021	LOANS		2021		2020		2019		2018		2017		PRIOR		TOTAL
At December 31, 2022																	LOANS		2022		2021		2020		2019		2018		PRIOR		TOTAL
Amortized cost:
Dealer:
Wholesale:
Performing	$	1,859.7													$	1,859.7	$	2,766.0													$	2,766.0
Watch		6.1														6.1		6.1														6.1
	$	1,865.8													$	1,865.8	$	2,772.1													$	2,772.1
Retail:
Performing	$	201.9	$	434.4	$	315.4	$	311.7	$	176.0	$	118.2	$	96.9	$	1,654.5	$	206.2	$	609.7	$	348.6	$	223.1	$	241.7	$	120.8	$	121.1	$	1,871.2
Watch				7.0		3.6		9.1		4.6		1.1				25.4
At-risk														1.1		1.1														.7		.7
	$	201.9	$	441.4	$	319.0	$	320.8	$	180.6	$	119.3	$	98.0	$	1,681.0	$	206.2	$	609.7	$	348.6	$	223.1	$	241.7	$	120.8	$	121.8	$	1,871.9
Total dealer	$	2,067.7	$	441.4	$	319.0	$	320.8	$	180.6	$	119.3	$	98.0	$	3,546.8	$	2,978.3	$	609.7	$	348.6	$	223.1	$	241.7	$	120.8	$	121.8	$	4,644.0

Customer retail:
Fleet:
Performing			$	2,851.7	$	1,913.3	$	1,227.0	$	608.4	$	220.4	$	66.5	$	6,887.3			$	3,558.0	$	1,981.9	$	1,306.5	$	603.7	$	203.4	$	65.6	$	7,719.1
Watch				2.6		6.5		4.3		5.3		.6		.2		19.5				7.5		7.3		1.8		3.4		2.4		.5		22.9
At-risk				6.0		8.5		26.0		10.6		3.3		.4		54.8				6.7		17.7		18.8		17.2		5.9		.5		66.8
			$	2,860.3	$	1,928.3	$	1,257.3	$	624.3	$	224.3	$	67.1	$	6,961.6			$	3,572.2	$	2,006.9	$	1,327.1	$	624.3	$	211.7	$	66.6	$	7,808.8
Owner/operator:
Performing			$	611.9	$	389.9	$	228.1	$	116.0	$	38.6	$	10.1	$	1,394.6			$	478.2	$	425.9	$	251.2	$	120.9	$	45.3	$	6.0	$	1,327.5
Watch				.7		.5		.7		.4		.1				2.4				1.8		.9		.4		.3				.1		3.5
At-risk				.2		1.3		1.5		2.0		.5		.2		5.7				.4		.8		1.1		.8		.7				3.8
			$	612.8	$	391.7	$	230.3	$	118.4	$	39.2	$	10.3	$	1,402.7			$	480.4	$	427.6	$	252.7	$	122.0	$	46.0	$	6.1	$	1,334.8
Total customer retail			$	3,473.1	$	2,320.0	$	1,487.6	$	742.7	$	263.5	$	77.4	$	8,364.3			$	4,052.6	$	2,434.5	$	1,579.8	$	746.3	$	257.7	$	72.7	$	9,143.6

Total	$	2,067.7	$	3,914.5	$	2,639.0	$	1,808.4	$	923.3	$	382.8	$	175.4	$	11,911.1	$	2,978.3	$	4,662.3	$	2,783.1	$	1,802.9	$	988.0	$	378.5	$	194.5	$	13,787.6

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						DEALER				CUSTOMER RETAIL
							OWNER/										OWNER/
At September 30, 2022	WHOLESALE		RETAIL		FLEET		OPERATOR		TOTAL
At March 31, 2023											WHOLESALE		RETAIL		FLEET		OPERATOR		TOTAL
Current and up to 30 days past due	$	2,307.3	$	1,719.7	$	7,142.0	$	1,317.6	$	12,486.6	$	3,251.8	$	1,866.0	$	8,100.2	$	1,245.2	$	14,463.2
31 – 60 days past due		.5				8.8		2.2		11.5		.1				14.8		3.3		18.2
Greater than 60 days past due						29.5		3.0		32.5						33.6		2.7		36.3
	$	2,307.8	$	1,719.7	$	7,180.3	$	1,322.8	$	12,530.6	$	3,251.9	$	1,866.0	$	8,148.6	$	1,251.2	$	14,517.7

	DEALER				CUSTOMER RETAIL						DEALER				CUSTOMER RETAIL
							OWNER/										OWNER/
At December 31, 2021	WHOLESALE		RETAIL		FLEET		OPERATOR		TOTAL
At December 31, 2022											WHOLESALE		RETAIL		FLEET		OPERATOR		TOTAL
Current and up to 30 days past due	$	1,865.4	$	1,681.0	$	6,939.7	$	1,396.4	$	11,882.5	$	2,772.1	$	1,871.9	$	7,768.5	$	1,329.1	$	13,741.6
31 – 60 days past due		.4				9.3		1.8		11.5						14.7		3.1		17.8
Greater than 60 days past due						12.6		4.5		17.1						25.6		2.6		28.2
	$	1,865.8	$	1,681.0	$	6,961.6	$	1,402.7	$	11,911.1	$	2,772.1	$	1,871.9	$	7,808.8	$	1,334.8	$	13,787.6

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

	DEALER			CUSTOMER RETAIL						DEALER			CUSTOMER RETAIL
						OWNER/									OWNER/
At September 30, 2022	WHOLESALE	RETAIL		FLEET		OPERATOR		TOTAL
At March 31, 2023										WHOLESALE	RETAIL		FLEET		OPERATOR		TOTAL
Amortized cost basis with a specific reserve				$	36.5	$	3.4	$	39.9				$	34.1	$	3.5	$	37.6
Amortized cost basis with no specific reserve		$	.8		8.3				9.1		$	.5		22.7		.4		23.6
Total		$	.8	$	44.8	$	3.4	$	49.0		$	.5	$	56.8	$	3.9	$	61.2

	DEALER			CUSTOMER RETAIL						DEALER			CUSTOMER RETAIL
						OWNER/									OWNER/
At December 31, 2021	WHOLESALE	RETAIL		FLEET		OPERATOR		TOTAL
At December 31, 2022										WHOLESALE	RETAIL		FLEET		OPERATOR		TOTAL
Amortized cost basis with a specific reserve				$	40.3	$	5.7	$	46.0				$	33.9	$	3.6	$	37.5
Amortized cost basis with no specific reserve		$	1.1		4.7				5.8		$	.7		16.2				16.9
Total		$	1.1	$	45.0	$	5.7	$	51.8		$	.7	$	50.1	$	3.6	$	54.4

Interest income recognized on a cash basis for finance receivables that are on non-accrual status was as follows:

The Company adopted ASU 2022-02 on January 1, 2023. The amortized cost basis of finance receivables modified for fleet and owner/operator customers experiencing financial difficulty was $6.0 and nil, respectively, at March 31, 2023. Total modifications with customers experiencing financial difficulty represented .2% of the total retail portfolio on an annualized basis. The modifications provided term extensions and granted customers additional time to pay, primarily in Brasil. The financial effects of the term extensions added a weighted-average of 21 months to the life of the modified contracts and the effect on the allowance for credit losses from such modifications was not significant at March 31, 2023.

All of the finance receivables modified with customers experiencing financial difficulty are current. There were no finance receivables modified with customers experiencing financial difficulty on or after January 1, 2023 that had a payment default in the three months ended March 31, 2023.

Troubled Debt ~~Restructurings~~Restructuring Disclosures Prior to Adoption of ASU 2022-02

Prior to the adoption of ASU 2022-02, when considering whether to modify customer accounts for credit reasons, the Company evaluated the creditworthiness of the customers and modified those accounts that the Company considered likely to perform under the modified terms. When the Company modified a loan or finance lease for credit reasons and granted a concession, the modification was classified as a troubled debt restructuring (TDR). The Company did not typically grant credit modifications for customers that did not meet minimum underwriting standards since the Company normally repossesses the financed equipment in those circumstances. When such modifications did occur, they were considered TDRs.

The balance of TDRs was ~~$34.2~~$31.1 and ~~$41.6~~$38.3 at ~~September 30,~~December 31, 2022 and ~~December~~March 31, ~~2021,~~2022, respectively. At modification date, the pre-modification and post-modification amortized cost basis balances for finance receivables modified during the period by portfolio class ~~are~~were as follows:

	Three Months Ended				Nine Months Ended
	September 30, 2021				September 30, 2021
Three Months Ended March 31,									2022
	AMORTIZED COST BASIS				AMORTIZED COST BASIS				AMORTIZED COST BASIS
	PRE- MODIFICATION		POST- MODIFICATION		PRE- MODIFICATION		POST- MODIFICATION		PRE- MODIFICATION		POST- MODIFICATION
Fleet	$	1.0	$	1.0	$	5.8	$	5.7	$	.6	$	.6
Owner/operator						1.0		1.0
	$	1.0	$	1.0	$	6.8	$	6.7	$	.6	$	.6

The effect on the allowance for credit losses from such modifications ~~was~~were not significant at ~~September 30, 2022 and 2021.~~

~~TDRs modified during the previous twelve months that subsequently defaulted (i.e., became more than 30 days past due) in the nine months ended September 30, 2022 and 2021 were $.8 and~~ ~~nil, respectively.~~March 31, 2022.

~~There were no finance receivables~~TDRs modified ~~as TDRs~~ during the previous twelve months, prior to the adoption of ASC 2022-02, that subsequently defaulted ~~and were charged off~~(i.e., became more than 30 days past due) in the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 were niland ~~2021,~~$.8, respectively.

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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 was ~~$6.1~~$13.0 and ~~$4.7,~~$9.2, respectively. Proceeds from the sales of repossessed assets were ~~$16.1~~$4.6 and ~~$33.9~~$7.8 for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. These amounts are included in Proceeds from asset disposals in the Condensed 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 Comprehensive Income.

Product support liabilities include estimated future payments related to product warranties and deferred revenues on optional extended warranties and R~~&M.~~&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.

WARRANTY RESERVES	2022			2021			2023			2022
Balance at January 1	$	344.3		$	389.7		$	437.7		$	344.3
Cost accruals		269.4			218.9			163.8			73.6
Payments		(302.9	)		(309.7	)		(134.3	)		(88.2	)
Change in estimates for pre-existing warranties		80.6			43.4			53.1			23.1
Currency translation and other		(23.2	)		(5.0	)		3.3			(3.0	)
Balance at September 30	$	368.2		$	337.3
Balance at March 31							$	523.6		$	349.8

DEFERRED REVENUES ON EXTENDED WARRANTIES AND R&M CONTRACTS		2022			2021			2023			2022
Balance at January 1	$	775.2		$	795.8		$	904.9		$	775.2
Deferred revenues		439.7			350.7			208.6			146.1
Revenues recognized		(352.7	)		(363.8	)		(119.3	)		(119.3	)
Currency translation		(56.7	)		(15.5	)		7.0			(9.1	)
Balance at September 30	$	805.5		$	767.2
Balance at March 31							$	1,001.2		$	792.9

The Company expects to recognize a~~pproximately $70.7~~approximately $225.9 of the remaining deferred revenue on extended warranties and R&M contracts in ~~2022, $245.3 in~~ 2023, ~~$232.4~~$296.5 in 2024, ~~$142.0~~$258.7 in 2025, ~~$78.1~~$144.9 in 2026, $53.2 in 2027 and ~~$37.0 thereafter~~.

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2022			2021			2022			2021
Three Months Ended March 31,													2023			2022
Net income	$	769.4		$	380.5		$	2,090.3		$	1,346.8		$	733.9		$	600.5
Other comprehensive income (loss) (OCI):
Unrealized gains on derivative contracts		24.3			8.2			61.4			29.4
Unrealized (losses) gains on derivative contracts														(29.5	)		36.1
Tax effect		(6.3	)		(1.6	)		(17.2	)		(7.6	)		6.3			(9.7	)
		18.0			6.6			44.2			21.8			(23.2	)		26.4
Unrealized losses on marketable debt securities		(22.7	)		(3.4	)		(67.2	)		(12.2	)
Unrealized gains (losses) on marketable debt securities														14.0			(34.1	)
Tax effect		5.5			.7			16.6			2.9			(3.5	)		8.5
		(17.2	)		(2.7	)		(50.6	)		(9.3	)		10.5			(25.6	)
Pension plans		20.2			22.7			50.4			49.0			1.0			10.3
Tax effect		(5.1	)		(5.4	)		(12.6	)		(11.6	)		(.1	)		(2.4	)
		15.1			17.3			37.8			37.4			.9			7.9
Foreign currency translation losses		(297.3	)		(136.8	)		(503.4	)		(144.8	)
Net other comprehensive loss		(281.4	)		(115.6	)		(472.0	)		(94.9	)
Foreign currency translation gains														92.0			34.7
Net other comprehensive income														80.2			43.4
Comprehensive income	$	488.0		$	264.9		$	1,618.3		$	1,251.9		$	814.1		$	643.9

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:

Three Months Ended September 30, 2021	DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at July 1, 2021	$	(14.0	)	$	8.0		$	(558.0	)	$	(465.6	)	$	(1,029.6	)
																DERIVATIVE CONTRACTS			MARKETABLE DEBT SECURITIES			PENSION PLANS			FOREIGN CURRENCY TRANSLATION			TOTAL
Balance at January 1, 2022																$	(13.5	)	$	(1.1	)	$	(269.8	)	$	(636.7	)	$	(921.1	)
Recorded into AOCI		35.3			(2.5	)		6.1			(136.8	)		(97.9	)		18.1			(25.5	)		3.5			34.7			30.8
Reclassified out of AOCI		(28.7	)		(.2	)		11.2						(17.7	)		8.3			(.1	)		4.4						12.6
Net other comprehensive income (loss)		6.6			(2.7	)		17.3			(136.8	)		(115.6	)		26.4			(25.6	)		7.9			34.7			43.4
Balance at September 30, 2021	$	(7.4	)	$	5.3		$	(540.7	)	$	(602.4	)	$	(1,145.2	)
Balance at March 31, 2022																$	12.9		$	(26.7	)	$	(261.9	)	$	(602.0	)	$	(877.7	)

Stock-based compensation expense was ~~$2.6~~$13.5 and ~~$15.1~~$8.2 for the three months ended March 31, 2023 and ~~nine months ended September 30,~~ 2022, ~~respectively and $2.6 and $12.0 for the three months and nine months ended September 30, 2021,~~ respectively.

During the first ~~nine~~three months of ~~2022,~~2023, the Company issued ~~437,947~~638,871 common shares under deferred and stock compensation arrangements.

During the first ~~nine~~three months of ~~2022,~~2023, the Company acquired no treasury shares under the Company’s common stock repurchase plans. The Company acquired ~~21,853~~43,316 shares under the Company’s Long-Term Incentive Plan. Stock repurchases of $390.0 million remain authorized under the current $500.0 million program approved by the PACCAR Board of Directors on December 4, 2018.

The effective tax rate for the ~~third~~first quarter of 2023 was 20.1% compared to 22.2% for the first quarter of 2022, was 21.5% compared to 21.9% for the third quarter of 2021. The effective tax rate for the first nine months of 2022 was 21.8% compared to 22.4% for the same period of 2021. The lower effective tax rate in the third quarter and first nine months of 2022 was primarily due to ~~the change in~~a higher mix of income generated in jurisdictions with lower tax rates in ~~2022~~2023 as compared to ~~2021.~~2022.

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. The accounting policies of the reportable segments are the same as those applied in the consolidated financial statements as described in Note A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

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.

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.~~RVG, is performed by the Financial Services segment. 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.

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.

	Three Months Ended						Nine Months Ended
	September 30						September 30
		2022			2021			2022			2021
Three Months Ended March 31,														2023			2022
Net sales and revenues:
Truck	$	5,389.8		$	3,583.2		$	15,724.8		$	12,277.6		$	6,578.7		$	4,835.5
Less intersegment		(191.6	)		(130.6	)		(493.1	)		(439.8	)		(164.9	)		(138.4	)
External customers		5,198.2			3,452.6			15,231.7			11,837.8			6,413.8			4,697.1
Parts		1,487.3			1,275.2			4,343.2			3,677.8			1,641.1			1,405.3
Less intersegment		(15.8	)		(15.0	)		(48.1	)		(45.6	)		(18.1	)		(16.4	)
External customers		1,471.5			1,260.2			4,295.1			3,632.2			1,623.0			1,388.9
Other		17.3			24.9			52.8			68.8			13.3			20.4
		6,687.0			4,737.7			19,579.6			15,538.8			8,050.1			6,106.4
Financial Services		371.9			409.1			1,110.6			1,297.4			423.2			366.2
	$	7,058.9		$	5,146.8		$	20,690.2		$	16,836.2		$	8,473.3		$	6,472.6
Income before income taxes:
Truck	$	430.5		$	80.4		$	1,129.3		$	606.9		$	894.3		$	276.7
Parts		373.6			282.1			1,067.1			800.5			438.6			340.2
Other		8.0			3.0			14.9			13.9
Other*														(611.7	)		10.0
		812.1			365.5			2,211.3			1,421.3			721.2			626.9
Financial Services		146.2			120.1			437.6			303.0			148.8			147.0
Investment (loss) income		21.4			1.6			24.3			11.5
Investment income (loss)														49.0			(2.5	)
	$	979.7		$	487.2		$	2,673.2		$	1,735.8		$	919.0		$	771.4
Depreciation and amortization:
Truck	$	86.3		$	63.5		$	235.6		$	204.2		$	99.8		$	71.6
Parts		3.5			2.8			10.0			8.6			3.7			3.2
Other		6.0			5.3			17.9			16.0			6.3			5.7
		95.8			71.6			263.5			228.8			109.8			80.5
Financial Services		107.2			138.3			322.1			463.5			111.3			105.2
	$	203.0		$	209.9		$	585.6		$	692.3		$	221.1		$	185.7

* In 2023, Other includes a $600.0 million non-recurring charge related to civil litigation in Europe (EC-related claims) which is discussed in Note M.

As part of its risk management strategy, the Company enters into derivative contracts to hedge against the risks of interest rates, foreign currency rates and commodity prices. 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 ~~hedging~~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, commodity as well as 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 ~~$238.0~~$67.5 at ~~September 30, 2022.~~March 31, 2023.

The Company assesses hedges at inception and on an ongoing basis to determine ~~that~~ the designated derivatives are highly effective in offsetting changes in fair values or cash flow of the hedged items. 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 Condensed Consolidated Statements of Cash Flows.

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 ~~September 30, 2022,~~March 31, 2023, the notional amount of the Company’s interest-rate contracts was ~~$2,710.0.~~$2,972.1. Notional maturities for all interest-rate contracts are ~~$184.5~~$534.0 for the remainder of ~~2022, $631.4 for~~ 2023, ~~$572.1~~$586.4 for 2024, ~~$912.1~~$933.5 for 2025, ~~$244.0~~$569.6 for 2026, ~~$155.1~~$204.7 for 2027, $106.9 for 2028 and ~~$10.8~~$37.0 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 ~~September 30, 2022,~~March 31, 2023, the notional amount of the outstanding foreign-exchange contracts was ~~$2,142.2.~~$2,280.9. Foreign-exchange contracts typically mature within ~~two years.~~one year.

Commodity Contracts: The Company enters into commodity forward contracts to hedge the prices of certain commodities used in the production of trucks. The objective is to reduce the fluctuation in earnings and cash flows associated with adverse movement in commodity prices. At ~~September 30, 2022,~~March 31, 2023, the notional amount of the outstanding commodity contracts was ~~$40.7.~~$50.3. Commodity 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:

	September 30, 2022						December 31, 2021						March 31, 2023						December 31, 2022
	ASSETS			LIABILITIES			ASSETS			LIABILITIES			ASSETS			LIABILITIES			ASSETS			LIABILITIES
Derivatives designated under hedge accounting:
Interest-rate contracts:
Financial Services:
Other assets	$	131.1					$	30.8					$	40.5					$	58.0
Deferred taxes and other liabilities				$	62.6					$	54.4					$	97.0					$	82.6
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets		101.0						25.3						21.1						57.3
Accounts payable, accrued expenses and other					5.2						15.8						24.3						9.5
Financial Services:
Other current assets		3.9						2.5												1.6
Deferred taxes and other liabilities					3.9						.1						9.4						5.1
Commodity contracts:
Truck, Parts and Other:
Other current assets														4.5						1.5
Accounts payable, accrued expenses and other					11.2						16.9						3.6						.6
	$	236.0		$	82.9		$	58.6		$	87.2		$	66.1		$	134.3		$	118.4		$	97.8
Derivatives not designated as hedging instruments:
Foreign-exchange contracts:
Truck, Parts and Other:
Other current assets	$	1.8					$	1.0					$	1.0					$	1.0
Accounts payable, accrued expenses and other				$	1.1					$	1.1					$	.5					$	.1
Financial Services:
Other assets		.2						.1						.4
Deferred taxes and other liabilities					.2						.2						.2						.1
Commodity contracts:
Truck, Parts and Other:
Accounts payable, accrued expenses and other																							.2
	$	2.0		$	1.3		$	1.1		$	1.3		$	1.4		$	.7		$	1.0		$	.4
Gross amounts recognized in Balance Sheets	$	238.0		$	84.2		$	59.7		$	88.5		$	67.5		$	135.0		$	119.4		$	98.2
Less amounts not offset in financial instruments:
Truck, Parts and Other:
Foreign-exchange contracts	$	(3.5	)	$	(3.5	)	$	(2.7	)	$	(2.7	)	$	(2.2	)	$	(2.2	)	$	(.1	)	$	(.1	)
Commodity contracts														(2.1	)		(2.1	)		(.5	)		(.5	)
Financial Services:
Foreign-exchange contracts								(.2	)		(.2	)								(1.8	)		(1.8	)
Interest-rate contracts		(17.7	)		(17.7	)		(12.8	)		(12.8	)		(23.8	)		(23.8	)		(21.5	)		(21.5	)
Pro forma net amount	$	216.8		$	63.0		$	44.0		$	72.8		$	39.4		$	106.9		$	95.5		$	74.3

The following table presents the amount of loss (gain) from derivative financial instruments recorded in the Consolidated Statements of Comprehensive Income:

	Three Months Ended						Nine Months Ended
	September 30, 2022						September 30, 2022
Three Months Ended March 31,													2023					2022
	INTEREST-			FOREIGN-			INTEREST-			FOREIGN-			INTEREST-		FOREIGN-			INTEREST-			FOREIGN-
	RATE			EXCHANGE			RATE			EXCHANGE			RATE		EXCHANGE			RATE			EXCHANGE
Truck, Parts and Other:
Net sales and revenues
Cash flow hedges				$	2.0					$	17.1				$	.2					$	6.9
Cost of sales and revenues
Cash flow hedges					(6.2	)					(3.5	)										3.7
Derivatives not designated as hedging instruments					.4						.3					(2.0	)					(.5	)
Interest and other (income), net
Cash flow hedges					3.9						8.8					1.8						.3
Net investment hedges					(1.4	)					(4.2	)				(2.8	)					(1.3	)
Derivatives not designated as hedging instruments					(5.8	)					(4.5	)				1.9						1.9
				$	(7.1	)				$	14.0				$	(.9	)				$	11.0
Financial Services:
Interest and other borrowing expenses
Cash flow hedges	$	(56.2	)	$	(3.0	)	$	(99.3	)	$	(7.6	)	$	27.4	$	2.4		$	(6.6	)
Fair value hedges		(.2	)					(.1	)					1.6					(.1	)
Derivatives not designated as hedging instruments					2.9						3.1					(.3	)				$	.1
	$	(56.4	)	$	(.1	)	$	(99.4	)	$	(4.5	)	$	29.0	$	2.1		$	(6.7	)	$	.1
Total	$	(56.4	)	$	(7.2	)	$	(99.4	)	$	9.5		$	29.0	$	1.2		$	(6.7	)	$	11.1

Three Months Ended
Nine Months Ended

September 30, 2021
September 30, 2021

INTEREST-

FOREIGN-

INTEREST-

FOREIGN-

RATE

EXCHANGE

RATE

EXCHANGE

Truck, Parts and Other:

Net sales and revenues

Cash flow hedges

$
1.3

$
14.9

Cost of sales and revenues

Cash flow hedges

(3.5
)

2.5

Derivatives not designated as hedging instruments

17.8

8.8

Interest and other (income), net

Cash flow hedges

(.5
)

(.2
)
Net investment hedges

(.7
)

(2.4
)
Derivatives not designated as hedging instruments

(.6
)

1.0

$
13.8

$
24.6

Financial Services:

Interest and other borrowing expenses

Cash flow hedges

$
(35.4
)

$
(45.9
)

Fair value hedges

.1

Derivatives not designated as hedging instruments

$
(.3
)

$
(.7
)

$
(35.4
)

$
(.3
)

$
(45.8
)

$
(.7
)
Total

$
(35.4
)

$
13.5

$
(45.8
)

$
23.9

~~Utilization of commodity hedging was initiated in Q3 2021.~~ The loss from commodity contracts recorded in Cost of sales and revenue was ~~$7.0~~$2.2 and ~~$17.4~~$4.9 for the three months ended March 31, 2023 and ~~nine months ended September 30, 2022.~~

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:

	September 30		December 31		March 31		December 31
	2022		2021		2023		2022
Financial Services
Term notes:
Carrying amount of the hedged liabilities	$	329.3	$	472.0	$	180.5	$	319.8
Cumulative basis adjustment included in the carrying amount		28.6		8.7		12.9		27.7

The above table excludes the cumulative basis adjustments on discontinued hedge relationships of ~~$7.0~~$18.0 and ~~$(.1)~~$7.1 as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

Substantially all of the Company’s interest-rate contracts and some foreign-exchange contracts and all commodity 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 Company elected to exclude the forward premium component (excluded component) on some foreign-exchange cash flow hedges and amortize the excluded component over the life of the derivative instruments. The amortization of the excluded component is recognized in Interest and other (income), net in Truck, Parts and Other segment and Interest and other borrowing expenses in Financial Services segment in the Consolidated Statements of Comprehensive Income. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows is ~~5.8~~9.7 years.

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

	Three Months Ended								Nine Months Ended
	September 30, 2022								September 30, 2022
Three Months Ended March 31,																	2023						2022
	INTEREST-		FOREIGN-						INTEREST-		FOREIGN-						INTEREST-			FOREIGN-			INTEREST-		FOREIGN-
	RATE		EXCHANGE			COMMODITY			RATE		EXCHANGE			COMMODITY			RATE			EXCHANGE			RATE		EXCHANGE
Gain (loss) recognized in OCI:
Truck, Parts and Other			$	35.4		$	(7.9	)			$	35.5		$	(15.7	)				$	(20.1	)			$	(28.4	)
Financial Services	$	49.4		(.1	)				$	109.1		(.4	)				$	(42.3	)		(1.0	)	$	19.9		(.5	)
	$	49.4	$	35.3		$	(7.9	)	$	109.1	$	35.1		$	(15.7	)	$	(42.3	)	$	(21.1	)	$	19.9	$	(28.9	)


	Three Months Ended								Nine Months Ended
	September 30, 2021								September 30, 2021
	INTEREST-		FOREIGN-						INTEREST-		FOREIGN-
	RATE		EXCHANGE			COMMODITY			RATE		EXCHANGE			COMMODITY
Gain (loss) recognized in OCI:
Truck, Parts and Other			$	2.3		$	(9.8	)			$	(6.7	)	$	(9.8	)
Financial Services	$	43.4		.6					$	67.1		(2.3	)
	$	43.4	$	2.9		$	(9.8	)	$	67.1	$	(9.0	)	$	(9.8	)

The pre-tax effects of loss commodity hedges recognized in other comprehensive income (loss) (OCI) for Truck, Parts and Other was $3.9 and $35.9 as of March 31, 2023 and 2022, respectively.

The amount of loss recorded in AOCI at ~~September 30, 2022~~March 31, 2023 that is estimated to be reclassified into earnings in the following 12 months if interest rates and exchange rates remain unchanged is approximately ~~$25.1,~~$4.6, 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~~gain reclassified out of AOCI into net income based on the probability that the original forecasted transactions would not occur was ~~nil~~$.2 and $.1 for the three months ended March 31, 2023 and ~~nine months ended September 30,~~ 2022, ~~respectively and~~ ~~nil~~ ~~for both the three and nine months ended September 30, 2021.~~ respectively.

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 ~~September 30, 2022,~~March 31, 2023, the notional amount of the outstanding net investment hedges was ~~$347.0.~~$443.6. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, the pre-tax gain recognized in OCI for the net investment hedges were ~~$22.8~~$.4 and ~~$58.8,~~$18.2, respectively.

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.

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.

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

Marketable Debt 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.

Marketable Equity Securities: The Company’s equity securities are traded on active exchanges and are classified as Level 1.

Derivative Financial Instruments: The Company’s derivative contracts consist of interest-rate swaps, cross currency swaps, foreign currency exchange and commodity 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, forward rates and commodity prices and are categorized as Level 2.

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

At September 30, 2022	LEVEL 1		LEVEL 2		TOTAL
At March 31, 2023							LEVEL 1		LEVEL 2		TOTAL
Assets:
Marketable debt securities
U.S. tax-exempt securities			$	442.9	$	442.9			$	413.3	$	413.3
U.S. taxable municipal / non-U.S. provincial bonds				176.1		176.1				199.4		199.4
U.S. corporate securities				235.5		235.5				272.8		272.8
U.S. government and agency securities	$	109.0				109.0	$	132.8				132.8
Non-U.S. corporate securities				408.3		408.3				434.9		434.9
Non-U.S. government securities				70.1		70.1				81.8		81.8
Other debt securities				99.8		99.8				102.5		102.5
Total marketable debt securities	$	109.0	$	1,432.7	$	1,541.7	$	132.8	$	1,504.7	$	1,637.5
Marketable equity securities	$	2.5			$	2.5	$	1.4			$	1.4
Total marketable securities	$	111.5	$	1,432.7	$	1,544.2	$	134.2	$	1,504.7	$	1,638.9
Derivatives
Cross currency swaps			$	119.1	$	119.1			$	35.0	$	35.0
Interest-rate swaps				12.0		12.0				5.5		5.5
Foreign-exchange contracts				106.9		106.9				22.5		22.5
Commodity contracts										4.5		4.5
Total derivative assets			$	238.0	$	238.0			$	67.5	$	67.5
Liabilities:
Derivatives
Cross currency swaps			$	34.1	$	34.1			$	78.8	$	78.8
Interest-rate swaps				28.5		28.5				18.2		18.2
Foreign-exchange contracts				10.4		10.4				34.4		34.4
Commodity contracts				11.2		11.2				3.6		3.6
Total derivative liabilities			$	84.2	$	84.2			$	135.0	$	135.0

At December 31, 2021	LEVEL 1		LEVEL 2		TOTAL
At December 31, 2022							LEVEL 1		LEVEL 2		TOTAL
Assets:
Marketable debt securities
U.S. tax-exempt securities			$	432.5	$	432.5			$	445.1	$	445.1
U.S. taxable municipal / non-U.S. provincial bonds				191.6		191.6				180.8		180.8
U.S. corporate securities				207.4		207.4				251.0		251.0
U.S. government and agency securities	$	96.4				96.4	$	115.0				115.0
Non-U.S. corporate securities				442.8		442.8				450.0		450.0
Non-U.S. government securities				75.0		75.0				76.4		76.4
Other debt securities				100.0		100.0				94.7		94.7
Total marketable debt securities	$	96.4	$	1,449.3	$	1,545.7	$	115.0	$	1,498.0	$	1,613.0
Marketable equity securities	$	13.7			$	13.7	$	1.2			$	1.2
Total marketable securities	$	110.1	$	1,449.3	$	1,559.4	$	116.2	$	1,498.0	$	1,614.2
Derivatives
Cross currency swaps			$	18.2	$	18.2			$	49.1	$	49.1
Interest-rate swaps				12.6		12.6				8.9		8.9
Foreign-exchange contracts				28.9		28.9				59.9		59.9
Commodity contracts										1.5		1.5
Total derivative assets			$	59.7	$	59.7			$	119.4	$	119.4
Liabilities:
Derivatives
Cross currency swaps			$	33.1	$	33.1			$	52.0	$	52.0
Interest-rate swaps				21.3		21.3				30.6		30.6
Foreign-exchange contracts				17.2		17.2				14.8		14.8
Commodity contracts				16.9		16.9				.8		.8
Total derivative liabilities			$	88.5	$	88.5			$	98.2	$	98.2

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.

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:

	September 30, 2022				December 31, 2021				March 31, 2023				December 31, 2022
	CARRYING		FAIR		CARRYING		FAIR		CARRYING		FAIR		CARRYING		FAIR
	AMOUNT		VALUE		AMOUNT		VALUE		AMOUNT		VALUE		AMOUNT		VALUE
Assets:
Financial Services fixed rate loans	$	6,399.8	$	6,115.0	$	6,011.7	$	6,018.2	$	6,980.8	$	6,760.3	$	6,859.1	$	6,582.0
Liabilities:
Financial Services fixed rate debt		7,046.1		6,681.2		6,905.7		6,935.1		8,265.7		8,107.3		8,070.5		7,715.9

The Company has several defined benefit pension plans, which cover a majority of its employees. The following information details the components of net pension (income) expense for the Company’s defined benefit plans:

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2022			2021			2022			2021
Three Months Ended March 31,													2023			2022
Service cost	$	37.7		$	37.6		$	113.5		$	113.0		$	25.0		$	32.5
Interest on projected benefit obligation		21.0			16.7			63.9			50.0			31.1			19.1
Expected return on assets		(53.2	)		(51.1	)		(162.0	)		(153.4	)		(57.5	)		(48.7	)
Amortization of prior service costs		.2			.2			.5			.6			.3			.1
Recognized actuarial loss		7.1			14.7			21.7			44.2			.7			5.6
Net pension expense	$	12.8		$	18.1		$	37.6		$	54.4
Net pension (income) expense													$	(.4	)	$	8.6

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

~~During the~~The Company contributed $5.8 and $6.7 for three months ended March 31, 2023 and ~~nine months ended September 30,~~ 2022, ~~the Company contributed $21.1 and $34.3 to its pension plans, respectively, and $6.3 and $19.2 for the three and nine months ended September 30, 2021,~~ respectively.

On July 19, 2016, the European Commission (EC) concluded its investigation of all major European truck manufacturers and reached a settlement with DAF Trucks N.V., DAF Trucks Deutschland GmbH and PACCAR Inc (collectively “the Company”). Following the settlement, certain EC-related claims and lawsuits have been filed in various ~~European~~ jurisdictions primarily in Europe against all major European truck manufacturers including the Company and certain subsidiaries. These claims and lawsuits include a number of collective proceedings, including a class action in the United Kingdom, alleging EC-related claims and seeking ~~alleged~~monetary damages. In certain jurisdictions, the limitations period has not yet expired and additional claimants may bring EC-related claims and lawsuits against the Company or its subsidiaries.

The legal proceedings are ~~continuing to move~~moving through the court ~~systems in the various jurisdictions with~~systems. In 2023, several European courts issued judgements; some ~~larger cases awaiting judgment in 2022~~have been favorable while others have been unfavorable and ~~others scheduled for trial in upcoming years. While the~~are being appealed. The Company believes it has meritorious defenses to ~~all EC-related claims~~the legal claims. During the first quarter of 2023, the Company settled with several claimants. Based on these settlements and ~~lawsuits,~~judgements, the ~~final disposition~~Company recorded in the first quarter 2023, a non-recurring pre-tax charge of ~~all such claims and lawsuits will likely take a significant period of time to resolve and~~$600.0 million ($446.4 million after-tax) for the ~~final outcomes are highly uncertain.~~estimable total cost. The ~~Company cannot at this time reasonably~~ estimate ~~a range of loss, if any, that~~ may ~~result. Adverse final decisions involving significant numbers of DAF truck sales~~be adjusted as the legal process continues, which could have a material impact on the Company’s ~~results of operations and cash flows.~~financial results.

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.

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, Australia and South America. The Company’s Other business includes the manufacturing and marketing of industrial winches.

~~The new DAF XD truck was named~~ ~~International Truck of the Year 2023~~ at the IAA truck show in Hannover, Germany in the third quarter. The DAF XD truck represents a new generation of distribution and vocational vehicles. The DAF XD shares many features and design elements with the new DAF XF, XG, and XG+ trucks, which were named ~~International Truck of the Year 2022. The new DAF XD sets an industry benchmark in vocational performance and driver comfort. The versatile DAF XD is available as a tractor or rigid truck with a high performance PACCAR engine.~~

The PACCAR Financial Services (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 ~~$15.92~~$17.91 billion. PFS issued ~~$2.23 billion~~$800.0 million in medium-term notes during the first ~~nine~~three months of ~~2022~~2023 to support new business volume and repay maturing debt.

In accordance with international sanctions, the Company has suspended truck and parts sales to Russia and Belarus. The Company has no factories in Russia and has managed export sales to Russia through independent dealers. In 2021, 2,500 trucks were sold into Russia and Belarus. The Company also sold parts in these markets through a third-party owned warehouse. The trucks were sold on a fully paid-up basis; accordingly, the Company does not have significant receivables exposure. Inventory balances are not significant. The conflict has affected energy supplies in Europe. If the availability of energy in Europe is severely constrained, truck delivery volumes could be impacted. The Company continues to monitor the situation closely. The conflict has not yet had a significant impact on the results of operations or cash flows of the Company.

Truck industry heavy-duty retail sales in the U.S. and Canada in ~~2022~~2023 are expected to be ~~265,000~~280,000 to ~~285,000~~320,000 units compared to ~~250,000~~283,500 in ~~2021~~2022.~~Estimates for the U.S. and Canada truck industry retail sales in 2023 are in the range of 260,000 to 300,000 units.~~ In Europe, ~~2022~~2023 truck industry registrations for over 16-tonne vehicles are expected to be ~~275,000~~280,000 to ~~295,000~~320,000 units compared to ~~278,000~~297,500 in ~~2021~~2022. ~~The European truck industry registrations in the above 16-tonne truck market in 2023 are projected to be in a range 260,000 to 300,000 units.~~ In South America, heavy-duty truck industry registrations in 2022 are projected to be ~~125,000~~115,000 to ~~135,000~~125,000 as compared to ~~127,000~~137,100 in ~~2021~~2022.~~Heavy-duty truck industry sales in South America in 2023 are projected to be in a range of 125,000 to 135,000 units.~~

The Company has been affected by an industry-wide undersupply of component parts and anticipates the shortages ~~will~~may continue to affect deliveries in ~~the fourth quarter of the year and into~~ 2023.

~~In 2022, PACCAR Parts sales are expected to increase 14-16% compared to 2021 levels reflecting strong freight demand.~~ In 2023, PACCAR Parts sales are expected to increase ~~5-8% from~~10-13% compared to 2022 ~~levels.~~levels reflecting strong freight demand.

Based on the truck market outlook, average earning assets in 2022 are expected to increase 1-3% including unfavorable foreign exchange impacts compared to 2021. Current high levels of freight tonnage, freight rates and fleet utilization are contributing to customers’ profitability and cash flow. In 2023, average earning assets are expected to increase ~~3-5%~~4-7% compared to 2022. 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 investments in ~~2022~~2023 are expected to be ~~$475~~$600 to ~~$500~~$650 million and R&D is expected to be ~~$330~~$380 to ~~$340 million. In 2023, capital investments are projected to be $525 to $575 million and R&D is expected to be $350 to $400~~$420 million. The Company is ~~investing~~increasing its investment in next generation clean diesel and ~~zero emissions~~electric powertrain technologies, autonomous driving systems, connected vehicle services, ~~and next-generation~~advanced manufacturing and distribution capabilities.

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

The Company’s results of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ are presented below.

	Three Months Ended						Nine Months Ended
	September 30						September 30
($ in millions, except per share amounts)	2022			2021			2022			2021
Three Months Ended March 31,													2023			2022
Net sales and revenues:
Truck	$	5,198.2		$	3,452.6		$	15,231.7		$	11,837.8		$	6,413.8		$	4,697.1
Parts		1,471.5			1,260.2			4,295.1			3,632.2			1,623.0			1,388.9
Other		17.3			24.9			52.8			68.8			13.3			20.4
Truck, Parts and Other		6,687.0			4,737.7			19,579.6			15,538.8			8,050.1			6,106.4
Financial Services		371.9			409.1			1,110.6			1,297.4			423.2			366.2
	$	7,058.9		$	5,146.8		$	20,690.2		$	16,836.2		$	8,473.3		$	6,472.6
Income before income taxes:
Truck	$	430.5		$	80.4		$	1,129.3		$	606.9		$	894.3		$	276.7
Parts		373.6			282.1			1,067.1			800.5			438.6			340.2
Other		8.0			3.0			14.9			13.9
Other*														(611.7	)		10.0
Truck, Parts and Other		812.1			365.5			2,211.3			1,421.3			721.2			626.9
Financial Services		146.2			120.1			437.6			303.0			148.8			147.0
Investment income		21.4			1.6			24.3			11.5			49.0			(2.5	)
Income taxes		(210.3	)		(106.7	)		(582.9	)		(389.0	)		(185.1	)		(170.9	)
Net income	$	769.4		$	380.5		$	2,090.3		$	1,346.8		$	733.9		$	600.5
Diluted earnings per share	$	2.21		$	1.09		$	5.99		$	3.87		$	1.40		$	1.15
After-tax return on revenues		10.9	%		7.4	%		10.1	%		8.0	%		8.7	%		9.3	%
After-tax adjusted return on revenues (non-GAAP)**														13.9	%

* In 2023, Other includes a $600.0 million non-recurring charge related to civil litigation in Europe (EC-related claims).

** See Reconciliation of GAAP to Non-GAAP Financial Measures for 2023 on page 40.

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 ~~and COVID-19 related factors~~ affecting the Company’s results of operations.

The Company’s Truck segment accounted for ~~74%~~76% of revenues in the ~~third~~first quarter ~~and first nine months~~ of ~~2022~~2023 compared to ~~67% and 70%~~73% in the ~~third~~first quarter ~~and first nine months~~ of ~~2021, respectively.~~2022.

	Three Months Ended					Nine Months Ended
	September 30					September 30
		2022	2021	% CHANGE			2022	2021	% CHANGE
Three Months Ended March 31,											2023	2022	% CHANGE
U.S. and Canada		24,400	17,200		42		69,500	62,800		11	26,000	20,700		26
Europe		13,300	9,700		37		44,800	35,200		27	17,400	16,100		8
Mexico, South America, Australia and other		6,700	5,900		14		20,000	17,100		17	7,700	6,200		24
Total units		44,400	32,800		35		134,300	115,100		17	51,100	43,000		19

The increase in new truck deliveries worldwide in the ~~third~~first quarter ~~and first nine months~~ of ~~2022~~2023 compared to the same period of ~~2021~~2022 was driven by higher ~~deliveries~~build rates and increased demand in all ~~markets~~major markets. . The industry-wide undersupply of component ~~products~~parts continues to impact deliveries.

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 the first ~~nine~~three months of ~~2022,~~2023, industry retail sales in the heavy-duty market in the U.S. and Canada were ~~201,000~~72,000 units compared to ~~185,000~~56,100 units in the same period of ~~2021.~~2022. The Company’s heavy-duty truck retail market share was ~~29.4%~~27.0% in the first ~~nine~~three months of ~~2022~~2023 compared to ~~29.6%~~28.8% in the first ~~nine~~three months of ~~2021.~~2022. The medium-duty market was ~~64,200~~25,900 units in the first ~~nine~~three months of ~~2022~~2023 compared to ~~62,200~~20,800 units in the same period of ~~2021.~~2022. The Company’s medium-duty market share was ~~10.0%~~11.2% in the first ~~nine~~three months of ~~2022~~2023 compared to ~~20.6%~~9.7% in the first ~~nine~~three months of ~~2021.~~2022.

The over 16‑tonne truck market in Europe in the first ~~nine~~three months of ~~2022~~2023 was ~~218,000~~90,200 units compared to ~~207,000~~74,600 units in the first ~~nine~~three months of ~~2021.~~2022. DAF over 16‑tonne market share was a ~~17.4%~~16.1% in the first ~~nine~~three months of ~~2022~~2023 compared to ~~15.8%~~17.1% in the same period of ~~2021.~~2022. The 6 to 16‑tonne market in the first ~~nine~~three months of ~~2022~~2023 was ~~28,700~~11,400 units compared to ~~31,700~~9,300 units in the same period of ~~2021.~~2022. DAF market share in the 6 to 16-tonne market in the first ~~nine~~three months of ~~2022~~2023 was ~~10.1%~~9.2% compared to ~~10.2%~~9.7% in the same period of ~~2021.~~2022.

	Three Months Ended								Nine Months Ended
	September 30								September 30
($ in millions)		2022			2021		% CHANGE			2022			2021		% CHANGE
Three Months Ended March 31,																		2023			2022		% CHANGE
Truck net sales and revenues:
U.S. and Canada	$	3,200.8		$	1,996.1			60	$	8,948.4		$	7,094.3			26	$	3,694.0		$	2,590.6			43
Europe		1,239.0			829.5			49		4,080.0			2,948.6			38		1,803.5			1,450.9			24
Mexico, South America, Australia and other		758.4			627.0			21		2,203.3			1,794.9			23		916.3			655.6			40
	$	5,198.2		$	3,452.6			51	$	15,231.7		$	11,837.8			29	$	6,413.8		$	4,697.1			37
Truck income before income taxes	$	430.5		$	80.4			435	$	1,129.3		$	606.9			86	$	894.3		$	276.7			223
Pre-tax return on revenues		8.3	%		2.3	%				7.4	%		5.1	%				13.9	%		5.9	%

The Company’s worldwide truck net sales and revenues in the ~~third~~first quarter increased to ~~$5.20~~$6.41 billion in ~~2022~~2023 from ~~$3.45~~$4.70 billion in ~~2021. Revenues for the first nine months increased to $15.23 billion in 2022 from $11.84 billion in 2021.~~2022. The increase ~~in both periods~~ was primarily due to higher truck unit deliveries and improved price realization in all markets, partially offset by unfavorable currency translation ~~effects.~~effects, primarily the euro.

~~In the third quarter and first nine months of 2022,~~ Truck segment income before taxes and pretax return on revenues increased compared to the same periods in ~~2021~~2022 reflecting higher truck unit deliveries and improved margins.

The major factors for the Truck segment changes in net sales and revenues, cost of sales and revenues and gross margin between the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ are as follows:

	NET			COST OF						NET			COST OF
	SALES AND			SALES AND			GROSS			SALES AND			SALES AND			GROSS
($ in millions)	REVENUES			REVENUES			MARGIN			REVENUES			REVENUES			MARGIN
Three Months Ended September 30, 2021	$	3,452.6		$	3,253.7		$	198.9
Three Months Ended March 31, 2022										$	4,697.1		$	4,296.1		$	401.0
Increase (decrease)
Truck sales volume		1,444.9			1,204.3			240.6			1,047.3			834.7			212.6
Average truck sales prices		515.5						515.5			812.8						812.8
Average per truck material, labor and other direct costs					349.0			(349.0	)					269.0			(269.0	)
Factory overhead and other indirect costs					36.2			(36.2	)					58.7			(58.7	)
Extended warranties, operating leases and other		37.7			41.0			(3.3	)		(.8	)		40.3			(41.1	)
Currency translation		(252.5	)		(238.0	)		(14.5	)		(142.6	)		(126.7	)		(15.9	)
Total increase		1,745.6			1,392.5			353.1			1,716.7			1,076.0			640.7
Three Months Ended September 30, 2022	$	5,198.2		$	4,646.2		$	552.0
Three Months Ended March 31, 2023										$	6,413.8		$	5,372.1		$	1,041.7

~~The major factors for the Truck segment changes in net sales and revenues, cost of sales and revenues and gross margin between the nine months ended September 30,~~ 2022 ~~and 2021 are as follows:~~

Truck SG&A expense decreased in the ~~third~~first quarter of ~~2022~~2023 to ~~$60.7~~$72.4 million from ~~$66.4~~$73.4 million in ~~2021.~~2022. The decrease was primarily due to lower sales and marketing costs and currency translation effects, partially offset by ~~increased~~higher salaries and related expenses and higher travel costs. For the first nine months of 2022, Truck SG&A increased to $201.6 million from $191.4 million in 2021, primarily due to higher professional expenses, higher salaries and related expenses and travel costs, partially offset by currency translation effects.

As a percentage of sales, Truck SG&A decreased to ~~1.2% and 1.3%~~1.1% in the ~~third~~first quarter ~~and first nine months of 2022, respectively,~~ compared to ~~1.9% and~~ 1.6% in the ~~third quarter and first nine months~~same period of ~~2021.~~

The Company’s Parts segment accounted for ~~21%~~19% of revenues in the ~~third~~first quarter ~~and first nine months~~ of ~~2022~~2023 compared to ~~24% and 22%~~21% in the ~~third quarter and first nine months~~same period of ~~2021, respectively.~~2022

	Three Months Ended									Nine Months Ended
	September 30									September 30
($ in millions)		2022			2021		% CHANGE				2022			2021		% CHANGE
Three Months Ended March 31,																				2023			2022		% CHANGE
Parts net sales and revenues:
U.S. and Canada	$	1,065.2		$	850.9			25		$	3,071.5		$	2,427.4			27		$	1,132.1		$	975.7			16
Europe		263.3			287.3			(8	)		832.5			861.5			(3	)		344.3			296.1			16
Mexico, South America, Australia and other		143.0			122.0			17			391.1			343.3			14			146.6			117.1			25
	$	1,471.5		$	1,260.2			17		$	4,295.1		$	3,632.2			18		$	1,623.0		$	1,388.9			17
Parts income before income taxes	$	373.6		$	282.1			32		$	1,067.1		$	800.5			33		$	438.6		$	340.2			29
Pre-tax return on revenues		25.4	%		22.4	%					24.8	%		22.0	%					27.0	%		24.5	%

The Company’s worldwide parts net sales and revenues for the ~~third~~first quarter increased to ~~$1.47~~$1.62 billion in ~~2022~~2023 from ~~$1.26~~$1.39 billion in ~~2021. For the first nine months, worldwide parts net sales and revenues increased to $4.30 billion in~~ 2022, ~~from $3.63 billion in 2021. The increase in both periods was~~ primarily due to higher demand in all markets and higher price realization, partially offset by unfavorable currency translation effects.

~~For the third quarter and first nine months of 2022, the~~ The increase in Parts segment income before income taxes and pre-tax return on revenues was primarily due to higher sales volume and higher margins, partially offset by unfavorable currency translation effects.

The major factors for the changes in Parts segment net sales and revenues, cost of sales and revenues and gross margin between the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ are as follows:

	NET			COST OF						NET			COST OF
	SALES AND			SALES AND			GROSS			SALES AND			SALES AND			GROSS
($ in millions)	REVENUES			REVENUES			MARGIN			REVENUES			REVENUES			MARGIN
Three Months Ended September 30, 2021	$	1,260.2		$	901.7		$	358.5
Three Months Ended March 31, 2022										$	1,388.9		$	970.3		$	418.6
Increase (decrease)
Aftermarket parts volume		104.9			73.4			31.5			52.8			29.8			23.0
Average aftermarket parts sales prices		159.9						159.9			209.5						209.5
Average aftermarket parts direct costs					67.4			(67.4	)					100.8			(100.8	)
Warehouse and other indirect costs					12.9			(12.9	)					14.4			(14.4	)
Currency translation		(53.5	)		(31.9	)		(21.6	)		(28.2	)		(14.3	)		(13.9	)
Total increase		211.3			121.8			89.5			234.1			130.7			103.4
Three Months Ended September 30, 2022	$	1,471.5		$	1,023.5		$	448.0
Three Months Ended March 31, 2023										$	1,623.0		$	1,101.0		$	522.0

~~The major factors for the changes in Parts segment net sales and revenues, cost of sales and revenues and gross margin between the nine months ended September 30, 2022 and 2021 are as follows:~~

Parts SG&A expense ~~decreased~~increased in the ~~third~~first quarter of ~~2022~~2023 to ~~$52.9~~ $58.1million from ~~$53.4~~$54.9 million in 2021. The decrease was primarily due to lower sales and marketing costs and currency translation effects largely offset by higher salaries and related expenses. For the first nine months, Parts SG&A increased to $162.4 million in 2022, ~~from $158.1 million in 2021~~ primarily due to higher salaries and related expenses, partially offset by lower sales and marketing costs and currency translation effects.

As a percentage of sales, Parts SG&A was 3.6% ~~and 3.8%~~ in the ~~third~~first quarter ~~and first nine months~~ of ~~2022, respectively,~~2023 compared to ~~4.2% and 4.4%~~4.0% in the ~~third~~first quarter ~~and first nine months~~ of ~~2021.~~

The Company’s Financial Services segment accounted for 5% of revenues in the ~~third~~first quarter ~~and first nine months~~ of ~~2022~~2023, compared to 8%6% in the ~~third~~first quarter ~~and first nine months~~ of ~~2021.~~2022.

	Three Months Ended							Nine Months Ended
	September 30							September 30
($ in millions)		2022		2021	% CHANGE				2022		2021	% CHANGE
Three Months Ended March 31,																2023		2022	% CHANGE
New loan and lease volume:
U.S. and Canada	$	758.0	$	834.6		(9	)	$	2,412.0	$	2,533.6		(5	)	$	645.7	$	836.8		(23	)
Europe		345.7		278.4		24			1,043.7		945.9		10			393.8		350.2		12
Mexico, Australia and other		333.4		252.5		32			964.4		717.9		34
Mexico, Australia, Brasil and other																392.7		297.2		32
	$	1,437.1	$	1,365.5		5		$	4,420.1	$	4,197.4		5		$	1,432.2	$	1,484.2		(4	)
New loan and lease volume by product:
Loans and finance leases	$	1,190.8	$	1,128.1		6		$	3,639.4	$	3,460.9		5		$	1,241.1	$	1,243.9
Equipment on operating lease		246.3		237.4		4			780.7		736.5		6			191.1		240.3		(20	)
	$	1,437.1	$	1,365.5		5		$	4,420.1	$	4,197.4		5		$	1,432.2	$	1,484.2		(4	)
New loan and lease unit volume:
Loans and finance leases		10,000		9,040		11			29,730		28,890		3			9,480		9,600		(1	)
Equipment on operating lease		2,800		2,680		4			8,760		8,040		9			2,190		2,880		(24	)
		12,800		11,720		9			38,490		36,930		4			11,670		12,480		(6	)
Average earning assets:
U.S. and Canada	$	8,608.7	$	8,634.6				$	8,622.6	$	8,726.9		(1	)	$	8,906.2	$	8,511.0		5
Europe		3,628.2		3,707.8		(2	)		3,773.0		3,821.8		(1	)		4,379.8		3,826.5		14
Mexico, Australia and other		2,579.6		2,120.7		22			2,475.0		2,077.2		19
Mexico, Australia, Brasil and other																3,075.3		2,326.7		32
	$	14,816.5	$	14,463.1		2		$	14,870.6	$	14,625.9		2		$	16,361.3	$	14,664.2		12
Average earning assets by product:
Loans and finance leases	$	10,228.8	$	10,041.6		2		$	10,194.7	$	9,950.8		2		$	11,021.9	$	10,073.8		9
Dealer wholesale financing		1,870.7		1,343.0		39			1,855.9		1,521.9		22			2,644.4		1,671.7		58
Equipment on lease and other		2,717.0		3,078.5		(12	)		2,820.0		3,153.2		(11	)		2,695.0		2,918.7		(8	)
	$	14,816.5	$	14,463.1		2		$	14,870.6	$	14,625.9		2		$	16,361.3	$	14,664.2		12
Revenues:
U.S. and Canada	$	170.5	$	183.7		(7	)	$	507.4	$	591.2		(14	)	$	184.0	$	168.6		9
Europe		118.1		161.7		(27	)		372.5		519.8		(28	)		138.0		129.5		7
Mexico, Australia and other		83.3		63.7		31			230.7		186.4		24
Mexico, Australia, Brasil and other																101.2		68.1		49
	$	371.9	$	409.1		(9	)	$	1,110.6	$	1,297.4		(14	)	$	423.2	$	366.2		16
Revenue by product:
Revenues by product:
Loans and finance leases	$	135.2	$	122.1		11		$	382.4	$	362.3		6		$	161.6	$	118.4		36
Dealer wholesale financing		25.2		9.4		168			61.2		31.5		94			46.4		13.9		234
Equipment on lease and other		211.5		277.6		(24	)		667.0		903.6		(26	)		215.2		233.9		(8	)
	$	371.9	$	409.1		(9	)	$	1,110.6	$	1,297.4		(14	)	$	423.2	$	366.2		16
Income before income taxes	$	146.2	$	120.1		22		$	437.6	$	303.0		44		$	148.8	$	147.0		1

~~For the third quarter, new loan and lease volume increased to $1,437.1 million in~~ ~~2022~~ ~~from $1,365.5 million in 2021. For the first nine months of 2022, new~~New loan and lease unit volume ~~increased to $4,420.1 million from $4,197.4~~was $1,432.2 million in ~~2021. The volume increase for both periods reflects higher new loan and lease volume~~the first quarter of 2023 compared to $1,484.2 million in ~~Brasil, Europe and Mexico, partially offset by~~the first quarter of 2022, reflecting lower new loan and lease volume in the U.S. ~~and Canada. The effect of currency translation decreased~~, partially offset by higher new loan and lease volume ~~by $70.9 million~~in Mexico, Europe and ~~$151.6 million in the third quarter and first nine months of 2022, primarily due to the lower euro and Australian dollar relative to the U.S. dollar.~~

~~In the third quarter of~~ ~~2022~~,Brasil. PFS finance market share of new PACCAR truck sales was ~~24.4%~~22.7% compared to ~~26.7%~~28.3% in the ~~third~~first quarter of ~~2021. In the first nine months of~~ 2022, ~~PFS~~reflecting lower finance market share ~~of new PACCAR truck sales was 25.7% compared to~~ ~~26.5%~~ in the ~~first nine months of 2021.~~U.S., partially offset by higher finance market share in Mexico.

~~In the third quarter of~~ ~~2022, PFS revenues decreased to $371.9 million from $409.1 million in 2021. In the first nine months of~~ ~~2022~~, PFS revenues decreased to $1,110.6 million from $1,297.4 million in 2021. The decreases for both periods were primarily due to lower used truck sales in Europe and the U.S. The effects of currency translation decreased PFS revenues by $22.4 million and $48.4 million in the third quarter and first nine months of ~~2022, respectively, primarily due to a lower euro relative to the U.S. dollar.~~

In the first quarter of 2023, PFS revenues increased to $423.2 million from $366.2 million in 2022, reflecting higher interest income driven by higher portfolio yields and portfolio growth.

PFS income before income taxes increased to ~~$146.2~~$148.8 million in the ~~third~~first quarter of ~~2022~~2023 from ~~$120.1~~$147.0 million in the ~~third~~first quarter of ~~2021. In the first nine months of~~ 2022,~~, PFS income before income taxes increased~~to~~$437.6 million from $303.0 million in 2021. The increase in both periods was~~ primarily due to ~~improved used truck results and~~ higher finance ~~and lease~~ margins, ~~driven by portfolio growth,~~ partially offset by the translation of weaker foreign currencies. The effects of translating weaker foreign currencies to the U.S. dollar decreased PFS income before income taxes by $7.6 million and $16.0 million for the third quarter and first nine months of ~~2022, respectively, primarily due to a~~ lower ~~euro relative to the U.S. dollar.~~operating lease margins.

Included in Financial Services “Other assets” on the Company’s Consolidated Balance Sheets are used trucks held for sale, net of impairments, of ~~$133.9~~$165.5 million at ~~September 30, 2022~~March 31, 2023 and ~~$92.1~~$141.7 million at December 31, ~~2021.~~2022. These trucks are primarily units returned from matured operating leases in the ordinary course of business, and also include trucks acquired from repossessions or through acquisitions of used trucks in trades related to new truck sales and trucks returned from residual value guarantees (RVGs).

The Company recognized gains on used trucks, excluding repossessions, of ~~$34.8~~$27.8 million in the ~~third~~first quarter of ~~2022~~2023 compared to gains of ~~$15.8~~$35.2 million in the ~~third~~first quarter of ~~2021. Losses on multiple unit transactions for the third quarter of 2022 were $.1 compared to $.6 in 2021.~~2022. Used truck losses related to repossessions, which are recognized as credit losses, and used truck gains, which are recognized as credit recoveries, were not significant for either the ~~third~~first quarter of ~~2022~~2023 or ~~2021.~~

~~The Company recognized gains on used trucks, excluding repossessions, of $104.7 million in the first nine months of~~ ~~2022~~ ~~compared to $4.7 million of gains in the first nine months of 2021. Losses on multiple unit transactions included in the first nine months of~~ ~~2022~~ were $.2 million compared to $17.5 million in the first nine months of 2021. Used truck losses related to repossessions, which are recognized as credit losses, and used truck gains, which are recognized as credit recoveries, were not significant for the first nine months of ~~2022~~ ~~or 2021.~~2022.

The major factors for the changes in interest and fees, interest and other borrowing expenses and finance margin for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ are outlined below:


($ in millions)	INTEREST AND FEES			INTEREST AND OTHER BORROWING EXPENSES			FINANCE MARGIN			INTEREST AND FEES			INTEREST AND OTHER BORROWING EXPENSES			FINANCE MARGIN
Three Months Ended September 30, 2021	$	131.5		$	35.3		$	96.2
Three Months Ended March 31, 2022										$	132.3		$	39.8		$	92.5
Increase (decrease)
Average finance receivables		15.9						15.9			32.8						32.8
Average debt balances					3.7			(3.7	)					10.9			(10.9	)
Yields		18.6						18.6			44.8						44.8
Borrowing rates					18.2			(18.2	)					44.4			(44.4	)
Currency translation and other		(5.6	)		(1.4	)		(4.2	)		(1.9	)		(1.3	)		(.6	)
Total increase		28.9			20.5			8.4			75.7			54.0			21.7
Three Months Ended September 30, 2022	$	160.4		$	55.8		$	104.6
Three Months Ended March 31, 2023										$	208.0		$	93.8		$	114.2

~~The major factors for the changes in interest and fees, interest and other borrowing expenses and finance margin between the nine months ended September 30, 2022 and 2021 are outlined below:~~

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

	Three Months Ended				Nine Months Ended
	September 30				September 30
($ in millions)		2022		2021		2022		2021
Three Months Ended March 31,										2023		2022
Operating lease and rental revenues	$	197.3	$	214.3	$	610.4	$	649.7	$	200.8	$	208.6
Used truck sales		8.9		58.8		42.3		240.0		8.7		20.6
Insurance, franchise and other revenues		5.3		4.5		14.3		13.9		5.7		4.7
Operating lease, rental and other revenues	$	211.5	$	277.6	$	667.0	$	903.6	$	215.2	$	233.9

Depreciation of operating lease equipment	$	122.7	$	143.5	$	359.2	$	462.3	$	123.4	$	112.5
Vehicle operating expenses		4.6		19.4		24.0		76.6		9.1		10.4
Cost of used truck sales		9.3		56.1		41.2		237.3		8.9		19.7
Insurance, franchise and other expenses		.8		.8		1.9		2.8		.9		.9
Depreciation and other expenses	$	137.4	$	219.8	$	426.3	$	779.0	$	142.3	$	143.5

The major factors for the changes in operating lease, rental and other revenues, depreciation and other expenses and lease margin between the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ are outlined below:


($ in millions)	OPERATING LEASE, RENTAL AND OTHER REVENUES			DEPRECIATION AND OTHER EXPENSES			LEASE MARGIN			OPERATING LEASE, RENTAL AND OTHER REVENUES			DEPRECIATION AND OTHER EXPENSES			LEASE MARGIN
Three Months Ended September 30, 2021	$	277.6		$	219.8		$	57.8
Three Months Ended March 31, 2022										$	233.9		$	143.5		$	90.4
(Decrease) increase
Used truck sales		(48.5	)		(45.4	)		(3.1	)		(11.8	)		(10.6	)		(1.2	)
Results on returned lease assets					(22.2	)		22.2						17.9			(17.9	)
Average operating lease assets		(10.5	)		(8.4	)		(2.1	)		(20.2	)		(16.9	)		(3.3	)
Revenue and cost per asset		8.9			5.1			3.8			15.1			10.9			4.2
Currency translation and other		(16.0	)		(11.5	)		(4.5	)		(1.8	)		(2.5	)		.7
Total (decrease) increase		(66.1	)		(82.4	)		16.3
Three Months Ended September 30, 2022	$	211.5		$	137.4		$	74.1
Total decrease											(18.7	)		(1.2	)		(17.5	)
Three Months Ended March 31, 2023										$	215.2		$	142.3		$	72.9

The major factors for the changes in operating lease, rental and other revenues, depreciation and other expenses and lease margin between the nine months ended September 30, 2022 and 2021 are outlined below:

Financial Services SG&A ~~for the third quarter of 2022 decreased to $33.3 million from $33.9~~was $35.2 million in the ~~third~~first quarter of ~~2021 primarily due~~2023 compared to decreases in the value of foreign currencies relative to the U.S. dollar, partially offset by higher salaries and related expenses. For the first nine months, Financial Services SG&A increased to $100.9$35.7 million in ~~2022 from $97.3 million in 2021 primarily due to higher salaries and related expenses, partially offset by decreases in the value of foreign currencies relative to the U.S. dollar.~~2022. As an annualized percentage of average earnings assets, Financial Services SG&A was .9% in the ~~third~~first quarter of 2023 and 1.0% in the first ~~nine months~~quarter of ~~2022 and 2021.~~2022.

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

	Three Months Ended					Nine Months Ended
	September 30, 2021					September 30, 2021					2023				2022
($ in millions)	PROVISION FOR LOSSES ON RECEIVABLES			NET CHARGE- OFFS		PROVISION FOR LOSSES ON RECEIVABLES			NET CHARGE- OFFS
($ in millions) Three Months Ended March 31,											PROVISION FOR LOSSES ON RECEIVABLES		NET CHARGE- OFFS		PROVISION FOR LOSSES ON RECEIVABLES			NET CHARGE- OFFS
U.S. and Canada	$	(.6	)	$	.9	$	(.2	)	$	1.5	$	.5	$	.8	$	(2.5	)	$	(.6	)
Europe		(.8	)		.2		(.6	)		1.3		.2		.2					.2
Mexico, Australia and other		1.4			1.1		4.0			3.9
Mexico, Australia, Brasil and other												2.4		.9		2.7			1.1
				$	2.2	$	3.2		$	6.7	$	3.1	$	1.9	$	.2		$	.7

The provision for losses on receivables ~~was $(.8)~~increased to $3.1 million in the ~~third~~first quarter of ~~2022 compared to nil in 2021, and in~~2023 from $.2 million for the ~~first nine months, the provision for losses on receivables was $3.8 million~~same period in 2022, compared to $3.2 million in 2021. The decrease in provision for losses in the third quarter of 2022 reflects improved portfolio performance in North America and Europe. The increase in provision for losses in the first nine months was mainlyprimarily driven by portfolio growth in all regions and ~~higher past due balances~~lower loss recoveries in ~~Brasil, partially offset by improved portfolio performance in North America and Europe.~~the U.S.

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 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 ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ are summarized below:

	2022					2021					2023					2022
($ in millions)	AMORTIZED COST BASIS		% OF TOTAL PORTFOLIO*			AMORTIZED COST BASIS		% OF TOTAL PORTFOLIO*			AMORTIZED COST BASIS		% OF TOTAL PORTFOLIO*			AMORTIZED COST BASIS		% OF TOTAL PORTFOLIO*
Commercial	$	158.3		2.1	%	$	161.4		2.1	%	$	45.5		1.6	%	$	72.1		2.8	%
Insignificant delay		60.8		.8	%		53.1		.7	%		26.7		.9	%		18.1		.7	%
Credit – no concession		46.3		.6	%		51.5		.7	%
Credit – TDR		9.7		.1	%		6.7		.1	%
Credit												12.3		.4	%		21.7		.8	%
	$	275.1		3.6	%	$	272.7		3.6	%	$	84.5		2.9	%	$	111.9		4.3	%

~~During~~Modification activity decreased to $84.5 million in the first ~~nine months~~quarter of ~~2022, total modification activity of $275.1~~2023 from $111.9 million ~~was comparable to $272.7 million for~~in the same period ~~last year.~~of 2022. The decrease in modifications for Commercial reasons primarily reflects lower volumes of refinancing. The increase in Insignificant delay reflects an increase in customers requesting payment relief for up to three months. The decrease in Credit reflects lower volumes of contract modifications and granting more time to pay, primarily in Brasil.

	September 30 2022			December 31 2021			September 30 2021			March 31 2023			December 31 2022			March 31 2022
Percentage of retail loan and lease accounts 30+ days past due:
U.S. and Canada		.1	%								.1	%		.1	%
Europe		.4	%		.4	%		.5	%		.3	%		.2	%		.6	%
Mexico, Australia and other		1.7	%		1.2	%		1.2	%
Mexico, Australia, Brasil and other											1.8	%		1.6	%		1.8	%
Worldwide		.4	%		.3	%		.3	%		.5	%		.4	%		.4	%

Accounts 30+ days past due was ~~.4%~~.5% at ~~September 30, 2022~~March 31, 2023 compared to ~~.3%~~.4% at December 31, ~~2021.~~2022 and .4% at March 31, 2022. 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 ~~$16.2~~$10.8 million of accounts worldwide during the ~~third~~first quarter of ~~2022~~2023, ~~$.4~~$8.9 million during the fourth quarter of ~~2021~~2022 and ~~$.2~~$9.4 million during the ~~third~~first quarter of ~~2021~~2022 that 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:

	September 30 2022			December 31 2021			September 30 2021			March 31 2023			December 31 2022			March 31 2022
Pro forma percentage of retail loan and lease accounts 30+ days past due:
U.S. and Canada		.1	%								.1	%		.1	%
Europe		.4	%		.4	%		.5	%		.3	%		.2	%		.6	%
Mexico, Australia and other		1.9	%		1.2	%		1.2	%
Mexico, Australia, Brasil and other											2.2	%		2.0	%		2.3	%
Worldwide		.5	%		.3	%		.3	%		.6	%		.5	%		.5	%

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 ~~September 30, 2022,~~March 31, 2023, December 31, ~~2021~~2022 and ~~September 30, 2021.~~March 31, 2022. The effect on the allowance for credit losses from such modifications was not significant at ~~September 30, 2022,~~March 31, 2023, December 31, ~~2021~~2022 and ~~September 30, 2021.~~March 31, 2022.

The Company’s annualized pre-tax return on average assets for Financial Services ~~increased to 3.6%~~was 3.4% in the ~~third~~first quarter of ~~2022~~2023 ~~from 3.1%~~compared to 3.8% in the same period of ~~2021, and in the first nine months, increased to 3.7% in~~ ~~2022~~ ~~from 2.6% in 2021. The increase in both periods was primarily driven by improved used truck results and higher finance and lease margins.~~2022.

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 both the ~~third~~first quarter ~~and first nine months~~ of ~~2022~~2023 and ~~2021.~~2022. Other SG&A increased to ~~$24.1 million for the third quarter of~~ ~~2022~~ ~~from $14.9 million for the third quarter of 2021 and increased to $66.6~~$29.3 million for the first ~~nine months~~quarter of ~~2022~~2023 from ~~$47.3~~$19.7 million for the first ~~nine months~~quarter of ~~2021. The increase in both periods was~~2022, primarily due to higher salaries and related ~~expenses.~~expenses, and higher professional fees.

For the ~~third~~first quarter, Other (loss) income before income taxes ~~increased~~was ($611.7) million compared to ~~$8.0 million from $3.0~~$10.0 million in ~~2021~~2022, primarily due to ~~lower professional fees and lower non-service components~~the EC-related charge which is discussed in Note M of ~~pension expenses, partially offset by higher salaries and related expenses. For~~ the first nine months, Other income before taxes increased to $14.9 million from $13.9 million in 2021 primarily due to lower non-service components of pension expenses, partially offset by higher salaries and related expenses.consolidated financial statements.

Investment income for the ~~third~~first quarter ~~increased to $21.4~~was $49.0 million in ~~2022~~2023 ~~from $1.6~~compared to investment loss of $2.5 million in ~~2021. For the first nine months,~~2022, primarily driven by higher yields on investment ~~income increased to $24.3 million in~~ ~~2022~~ ~~from $11.5 million in 2021. For the third quarter and first nine months of~~ ~~2022~~ ~~investment income from marketable debt securities was higher compared to the same periods in 2021~~ due to higher ~~average cash balances~~market interest rates in ~~North America and South America and~~all regions, as well as higher investment ~~yields in all regions.~~

The effective tax rate for the ~~third~~first quarter of ~~2022~~2023 was ~~21.5%~~20.1% compared to ~~21.9% for the third quarter of 2021. The effective tax rate~~22.2% for the first ~~nine months~~quarter of ~~2022~~ ~~was 21.8% compared to 22.4% for the first nine months of 2021.~~2022. The lower effective tax rate in the ~~third~~first quarter ~~and first nine months~~ of ~~2022~~2023 was primarily due to ~~the change in~~a higher mix of income generated in jurisdictions with lower tax rates in ~~2022~~2023 as compared to ~~2021~~.2022.

	Three Months Ended						Nine Months Ended
	September 30						September 30
($ in millions)		2022			2021			2022			2021
Three Months Ended March 31,														2023			2022
Domestic income before taxes	$	623.7		$	252.7		$	1,666.1		$	1,032.3		$	889.3		$	474.0
Foreign income before taxes		356.0			234.5			1,007.1			703.5			29.7			297.4
Total income before taxes	$	979.7		$	487.2		$	2,673.2		$	1,735.8		$	919.0		$	771.4
Domestic pre-tax return on revenues		15.3	%		9.1	%		14.6	%		11.4	%		19.4	%		14.1	%
Foreign pre-tax return on revenues		11.9	%		9.9	%		10.9	%		9.0	%		.8	%		9.6	%
Total pre-tax return on revenues		13.9	%		9.5	%		12.9	%		10.3	%		10.8	%		11.9	%

For the ~~third~~first quarter ~~and first nine months~~ of ~~2022~~2023, ~~both~~ domestic ~~and foreign~~ income before income taxes and pre-tax return on revenues increased primarily due to the improved results from Truck, Parts and Financial Services operations. In the first quarter of 2023, foreign income before income taxes and pre-tax return on revenues decreased due to the EC-related charge of $600.0 million, partially offset by improved results from Truck, Parts and Financial Services operations.

	September 30		December 31		March 31		December 31
($ in millions)		2022		2021		2023		2022
Cash and cash equivalents	$	3,323.5	$	3,428.3	$	4,410.1	$	4,690.9
Marketable securities		1,544.2		1,559.4		1,638.9		1,614.2
	$	4,867.7	$	4,987.7	$	6,049.0	$	6,305.1

The Company’s total cash and marketable securities at ~~September 30, 2022~~March 31, 2023 decreased ~~$120.0~~$256.1 million from the balances at December 31, ~~2021.~~2022. Total cash and marketable securities are primarily intended to provide liquidity while preserving capital.

($ in millions)
Nine Months Ended September 30,		2022		2021
Three Months Ended March 31,								2023		2022
Operating activities:
Net income	$	2,090.3		$	1,346.8		$	733.9		$	600.5
Net income items not affecting cash		402.2			455.6			165.7			45.2
Changes in operating assets and liabilities, net		(714.3	)		(652.2	)		(214.8	)		(186.4	)
Net cash provided by operating activities		1,778.2			1,150.2			684.8			459.3
Net cash used in investing activities		(1,318.5	)		(1,025.4	)		(292.7	)		(406.1	)
Net cash used in financing activities		(418.9	)		(1,389.9	)		(690.8	)		(156.4	)
Effect of exchange rate changes on cash and cash equivalents		(145.6	)		(46.7	)		17.9			(10.2	)
Net decrease in cash and cash equivalents		(104.8	)		(1,311.8	)		(280.8	)		(113.4	)
Cash and cash equivalents at beginning of period		3,428.3			3,539.6			4,690.9			3,428.3
Cash and cash equivalents at end of period	$	3,323.5		$	2,227.8		$	4,410.1		$	3,314.9

Operating activities: Cash provided by operations increased by ~~$628.0~~$225.5 million to ~~$1,778.2~~$684.8 million in the first ~~nine~~three months of ~~2022~~2023 from ~~$1,150.2~~$459.3 million in ~~2021.~~2022. Higher operating cash flows ~~reflect lower cash usage of $825.7 million for inventories,~~reflects higher net income of ~~$743.5~~$133.4 million and ~~lower cash outflow of $430.2 million for accounts payable and~~higher accrued expenses ~~as purchases of goods and services exceeded payments.~~including the EC-related charge. The higher operating cash flows were partially offset by ~~$1,165.5~~higher cash usage of $170.8 million infor inventories and higher cash usage of $123.8 million for wholesale receivables ~~in the Financial Services segment primarily due to increasing wholesale receivables, and lower cash receipts from trade and other receivables of $252.5 million.~~.

Investing activities: Cash used in investing activities ~~increased~~decreased by ~~$293.1~~$113.4 million to ~~$1,318.5~~$292.7 million in the first ~~nine~~three months of ~~2022~~2023 from ~~$1,025.4~~$406.1 million in ~~2021. Higher~~2022. Lower net cash used in investing activities reflects ~~higher net originations of loans and financing leases of $238.9 million and~~ lower ~~proceeds from asset disposals of $174.8 million. The higher net cash usage was partially offset by fewer~~ acquisitions of equipment for operating leases of ~~$102.4~~$77.1 million and lower net originations for retail loans and financing leases of $77.9 million. The lower net cash used in investing activities were partially offset by lower proceeds received from asset disposals of $16.7 million.

Financing activities: Cash used in financing activities ~~decreased~~increased by ~~$971.0~~$534.4 to ~~$418.9~~$690.8 million in the first ~~nine~~three months of ~~2022~~2023 from ~~$1,389.9~~$156.4 in ~~2021.~~2022. In the first ~~nine~~three months of ~~2022, cash provided by net borrowing activities in 2022 was $437.3 million, $1,265.9 million higher than~~2023, the ~~cash used by net borrowing activities of $828.6 million in 2021. The Company~~company paid ~~$875.9~~$1,105.3 million in dividends in ~~2022~~2023 compared to ~~$589.9~~$639.4 million in ~~2021~~2022, due primarily to a higher extra dividend paid in January 2023. Cash provided from borrowing activities was $397.0 million, $71.2 lower than the cash provided by borrowing activities of $468.2 in 2022.

The Company has line of credit arrangements of ~~$3.66~~$3.84 billion, of which ~~$3.36~~$3.48 billion were unused at ~~September 30, 2022.~~March 31, 2023. Included in these arrangements are $3.00 billion of committed bank facilities, of which $1.00 billion expires in June 2023, $1.00 billion expires in June 2025 and $1.00 billion expires in June 2027. 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 ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

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 ~~September 30, 2022,~~March 31, 2023, the Company has repurchased $110.0 million of shares under this plan. There were no repurchases made under this plan during the ~~third~~first quarter of ~~2022.~~2023.

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 the first ~~nine~~three months of ~~2022~~2023 were $~~339.4~~127.9 million compared to ~~$336.5~~$110.5 million for the same period of ~~2021.~~2022. Over the past decade, the Company’s combined investments in worldwide capital projects and R&D totaled ~~$7.22~~$7.31 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.

In ~~2022,~~2023, total capital investments for PACCAR are expected to be ~~$475~~$600 to ~~$500~~$650 million and R&D is expected to be ~~$330~~$380 to ~~$340 million. In 2023, capital investments are projected to be $525 to $575 million and R&D is expected to be $350 to $400~~$420 million. The Company is increasing its investment in clean diesel and electric powertrain technologies, autonomous systems, connected vehicle services, next-generation manufacturing and parts distribution capabilities.

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 2021, 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 ~~September 30, 2022~~March 31, 2023 was ~~$5.70~~$6.35 billion. ~~In October 2022 PFC issued $300.0 million of medium-term notes under this registration.~~ The registration expires in November 2024 and does not limit the principal amount of debt securities that may be issued during that period.

As of ~~September 30, 2022,~~March 31, 2023, the Company’s European finance subsidiary, PACCAR Financial Europe, had ~~€1.62~~€1.42 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 has been renewed through the filing of a new listing which expires in July 2023. The Company intends to renew this medium-term note program.

In August 2021, PACCAR Financial Mexico registered a 10.00 billion Mexican peso program with the Comision Nacional Bancaria y de Valores to issue medium-term notes and commercial paper. The registration expires in August 2026 and limits the amount of commercial paper (up to one year) to 5.00 billion Mexican pesos. At ~~September 30, 2022, 9.07~~March 31, 2023, 8.80 billion Mexican pesos were available for issuance.

In August 2018, the Company’s Australian subsidiary, PACCAR Financial Pty. Ltd. ~~(PFPL)~~(PFPL Australia), established a medium-term note program. The program does not limit the principal amount of debt securities that may be issued under the program. The total amount of medium-term notes outstanding for PFPL Australia as of ~~September 30, 2022~~March 31, 2023 was 700.0 million Australian dollars.

In May 2021, the Company’s Canadian subsidiary, PACCAR Financial Ltd. (PFL Canada), established a medium-term note program. The program does not limit the principal amount of debt securities that may be issued under the program. The total amount of medium-term notes outstanding for PFL Canada as of ~~September 30, 2022~~March 31, 2023 was 150.0 million Canadian 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.

This Form 10-Q 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 a charge for EC-related claims. 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.

Adjustment for the EC-related claims relates to a pre-tax charge of $600.0 million ($446.4 million after-tax) for estimable total costs recorded in Interest and other expenses (income), net in the first quarter 2023.

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 a significant non-recurring charge that is not representative of underlying operating trends.

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

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 and components, including semiconductors; labor disruptions; shortages of commercial truck drivers; increased warranty costs; pandemics; climate-related risks; global conflicts; litigation, including ECEuropean Commission (EC) settlement-related claims; or legislative and governmental regulations. A more detailed description of these and other risks is included under the headings Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10‑K for the year ended December 31, ~~2021~~2022 and in Part II, Item 1, “Legal Proceedings” and Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q.

There were no material changes in the Company’s market risk during the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. For additional information, refer to Item 7A as presented in the ~~2021~~2022 Annual Report on Form 10‑K.

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 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.

There have been no changes in the Company’s internal controls over financial reporting that occurred during the fiscal quarter covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

For Items 3, 4 and 5, there was no reportable information for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

Refer to Note M – “Commitments and Contingencies” in the Notes to Consolidated Financial Statements (Part I, Item 1) for discussion on litigation matters, which is incorporated by reference herein.

For information regarding risk factors, refer to Part I, Item 1A as presented in the ~~2021~~2022 Annual Report on Form 10-K. There have been no material changes in the Company’s risk factors during the three months ended ~~September 30, 2022, except for the following:~~

In accordance with international sanctions, the Company has suspended truck and parts sales to Russia and Belarus. The conflict has affected energy supplies in Europe. If the availability of energy in Europe is severely constrained, truck delivery volumes could be impacted. The Company continues to monitor the situation closely. The conflict has not yet had a significant impact on the results of operations or cash flows of the Company. The potential impact on the Company’s business will depend on future developments, including the severity and duration of the conflict and its effect on European and global economic conditions.March 31, 2023.

For Items 2(a) and (b), there was no reportable information for the three months ended ~~September 30, 2022.~~March 31, 2023.

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 the Amended and Restated Certificate of Incorporation of PACCAR Inc

8-K

April 24, 2020

3(i)

001-14817

Certificate of Amendment of the Amended and Restated Certificate of Incorporation of PACCAR Inc

8-K

April 29, 2022

3(i)

001-14817

(ii)

Bylaws:

Seventh Amended and Restated Bylaws of PACCAR Inc

8-K

July 26, 2022

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)

Forms of Medium-Term Note, Series Q (PACCAR Financial Corp.)

S-3

November 1, 2021

4.3 and 4.4

333-260663

(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 Information Memorandum dated May 29, 2020

10-Q

August 3, 2020

4(h)

001-14817

(g)

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 Information Memorandum dated July 15, 2021

10-Q

August 2, 2021

4(g)

001-14817

(h)

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 Information Memorandum dated July 13, 2022

10-Q

August 2, 2022

4(h)

001-14817

(i)

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.

Pursuant to the requirements 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.

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)

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

		Page
PART I.	FINANCIAL INFORMATION:

ITEM 1.	FINANCIAL STATEMENTS:
	Consolidated Statements of Comprehensive Income – Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (Unaudited)	3
	Consolidated Balance Sheets – ~~September 30, 2022~~March 31, 2023 (Unaudited) and December 31, ~~2021 (Unaudited)~~2022	4
	Condensed Consolidated Statements of Cash Flows – ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (Unaudited)	6
	Consolidated Statements of Stockholders’ Equity – Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	8
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3429
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5041
ITEM 4.	CONTROLS AND PROCEDURES	5041

PART II.	OTHER INFORMATION:

ITEM 1.	LEGAL PROCEEDINGS	5142
ITEM 1A.	RISK FACTORS	5142
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	5142
ITEM 6.	EXHIBITS	5243

INDEX TO EXHIBITS		5243

SIGNATURE		5546

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2022		2021		2022		2021
Additional shares		463,000		519,900		485,600		678,000
Antidilutive options		1,091,300		580,400		1,100,300		583,600

Three Months Ended March 31,	2023		2022
Additional shares		958,300		851,100
Antidilutive options		889,000		1,638,200

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

Three Months Ended September 30, 2021	AS ORIGINALLY REPORTED		EFFECT OF CHANGE			AS ADJUSTED
Truck, Parts and Other
Cost of sales and revenues	$	4,180.1	$	(3.9	)	$	4,176.2
Income Taxes		105.6		1.1			106.7
Net Income		377.7		2.8			380.5

Nine Months Ended September 30, 2021	AS ORIGINALLY REPORTED		EFFECT OF CHANGE			AS ADJUSTED
Truck, Parts and Other
Cost of sales and revenues	$	13,533.5	$	(8.2	)	$	13,525.3
Income Taxes		386.9		2.1			389.0
Net Income		1,340.7		6.1			1,346.8

Three Months Ended September 30, 2022	AS REPORTED		PRO FORMA UNDER LIFO		EFFECT OF CHANGE
Truck, Parts and Other
Cost of sales and revenues	$	5,689.3	$	5,699.1	$	(9.8	)
Income Taxes		210.3		207.9		2.4
Net Income		769.4		762.0		7.4
Net Income Per Share
Basic	$	2.21	$	2.19	$	.02
Diluted	$	2.21	$	2.18	$	.03

Nine Months Ended September 30, 2022	AS REPORTED		PRO FORMA UNDER LIFO		EFFECT OF CHANGE
Truck, Parts and Other
Cost of sales and revenues	$	16,785.8	$	16,821.5	$	(35.7	)
Income Taxes		582.9		574.1		8.8
Net Income		2,090.3		2,063.4		26.9
Net Income Per Share
Basic	$	6.00	$	5.92	$	.08
Diluted	$	5.99	$	5.91	$	.08

~~STANDARD~~	~~DESCRIPTION~~
~~2021-05~~	~~Leases (Topic 842) - Lessors—Certain Leases with Variable Lease Payments~~
~~2021-10~~	~~Government Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance~~

		Three Months Ended
	LINE ITEM IN THE CONSOLIDATED STATEMENTS OF	September 30
AOCI COMPONENTS	COMPREHENSIVE INCOME		2022			2021
Unrealized losses (gains) on derivative contracts:
Truck, Parts and Other
Foreign-exchange contracts	Net sales and revenues	$	2.0		$	1.3
	Cost of sales and revenues		(6.2	)		(3.5	)
	Interest and other (income), net		3.9			(.5	)

Commodity contracts	Cost of sales and revenues		7.0
Financial Services
Foreign-exchange contracts	Interest and other borrowing expenses		(3.0	)
Interest-rate contracts	Interest and other borrowing expenses		(56.2	)		(35.4	)
	Pre-tax expense reduction		(52.5	)		(38.1	)
	Tax expense		14.3			9.4
	After-tax expense reduction		(38.2	)		(28.7	)
Unrealized gains on marketable debt securities:
Marketable debt securities	Investment income		(.4	)		(.3	)
	Tax expense		.1			.1
	After-tax income increase		(.3	)		(.2	)
Pension plans:
Truck, Parts and Other
Actuarial loss	Interest and other (income), net		7.1			14.7
Prior service costs	Interest and other (income), net		.2			.2
	Pre-tax expense increase		7.3			14.9
	Tax benefit		(1.7	)		(3.7	)
	After-tax expense increase		5.6			11.2
Total reclassifications out of AOCI		$	(32.9	)	$	(17.7	)


($ in millions)	OPERATING LEASE, RENTAL AND OTHER REVENUES			DEPRECIATION AND OTHER EXPENSES			LEASE MARGIN
Nine Months Ended September 30, 2021	$	903.6		$	779.0		$	124.6
(Decrease) increase
Used truck sales		(193.6	)		(192.0	)		(1.6	)
Results on returned lease assets					(119.4	)		119.4
Average operating lease assets		(26.6	)		(21.2	)		(5.4	)
Revenue and cost per asset		21.7			8.2			13.5
Currency translation and other		(38.1	)		(28.3	)		(9.8	)
Total (decrease) increase		(236.6	)		(352.7	)		116.1
Nine Months Ended September 30, 2022	$	667.0		$	426.3		$	240.7

			PACCAR Inc
			(Registrant)

Date	~~October 28, 2022~~May 2, 2023	By	/s/ M. T. Barkley
			M. T. Barkley
			Senior Vice President and Controller
			(Authorized Officer and Chief Accounting Officer)