PACCAR Profits Surge 24 Percent; Best Quarter in Company's 100-Year History; PACCAR Announces Stock Repurchase

"PACCAR's geographic diversification, disciplined businesspractices and innovative product breadth have been key success factorsin the company's outstanding financial performance," added Pigott."Over the past 10 years, PACCAR has invested over $1.5 billion to fundcapital projects which have enhanced the company's technologyleadership, resulting in the highest product quality and customersatisfaction in the industry. In addition, completion of 4,600 SixSigma projects has contributed to the company's record manufacturingefficiency."

For the third quarter of 2005, PACCAR's net profit surged 24percent to a record $304.8 million ($1.78 per diluted share) comparedto the $246.7 million ($1.41 per diluted share) earned in the thirdquarter of 2004. Third quarter net sales and financial servicesrevenues were $3.54 billion, 21 percent higher than the $2.92 billionreported for the comparable period in 2004. The company's thirdquarter 2005 results marked the 15th consecutive quarter in which thecompany achieved higher net income than the same period in the prioryear.

For the first nine months of 2005, PACCAR reported record netincome of $820.3 million ($4.73 per diluted share), a 23 percentincrease compared to $665.4 million ($3.78 per diluted share) in 2004.Net sales and financial services revenues for the first nine monthsincreased 27 percent to a record $10.42 billion compared to $8.21billion last year. For the nine months, the company earned anindustry-leading after-tax return on beginning equity (ROE) of 29.6percent. Included in PACCAR's net income for the first nine months of2005 is a one-time charge of $64 million ($.37 per diluted share) forincome taxes associated with the repatriation of $1.5 billion of cashfrom its subsidiaries outside the United States.

Board Authorizes Additional Five Million Share Repurchase Program

The PACCAR Board of Directors today approved the repurchase of upto five million shares of its outstanding common stock. PACCAR hasrecently completed the acquisition of five million shares under aprevious authorization dating from December 2004. "PACCAR's profit andcash flow performance have been outstanding," said Mike Tembreull,vice chairman. "The repurchase programs reflect the Board's confidencein PACCAR's successful global business strategy and excellentlong-term growth." Based on total dividends, including regular andspecial during the last 12 months, PACCAR's dividend yield is 4.4percent. The company's stock has outperformed the Standard & Poor's500 Index for the previous three-, five- and ten-year time periods.

PACCAR has achieved a compound annual growth rate (CAGR) inearnings for the last ten years of 16 percent compared to the S&P500's growth rate of 7 percent. Over the same period, PACCAR hasearned an average annual ROE of 21.4 percent. "PACCAR has positioneditself as a leading provider of capital goods, financial services andlogistics technology to a growing customer base," added Tembreull.

Humanitarian Aid

"In 2005, there have been a number of natural disasters around theglobe," said Jim Cardillo, senior vice president. "PACCAR and itsemployees have contributed more than $2 million, in cash, to theAmerican Red Cross for the Asian tsunami and Hurricane Katrina reliefefforts. In addition, Kenworth and Peterbilt each donated a new Class8 truck to the city of New Orleans to aid them in their extensiverebuilding program."

Financial Highlights - Third Quarter

Highlights of PACCAR's financial results during the third quarterinclude:

-- Consolidated sales and revenues of $3.54 billion.

-- Record after-tax profit of $304.8 million.

-- Record after-tax return on revenues of 8.6 percent.

-- SG&A expense ratio at a record low level of 3.1 percent of sales.

During the third quarter, gross margins increased to 15.0 percentcompared to 14.3 percent for the same quarter in 2004. The increasewas due primarily to improved margins realized on the sale of Kenworthand Peterbilt trucks in North America as customers recognize thesuperior quality, reliability and life-cycle cost advantage of PACCARproducts.

Financial Highlights - First Nine Months

For the first nine months of 2005, financial highlights include:

-- Record consolidated sales and revenues of $10.42 billion.

-- Record after-tax profit of $820.3 million.

-- An industry-leading after-tax return on shareholder's equity of 29.6 percent.

-- Capital expenditures of $201.8 million.

-- Investment of $343.5 million for the repurchase of 5 million common shares.

-- Stockholder's equity exceeding $4 billion.

PACCAR Winch, one of the largest winch manufacturers in the world,had higher sales and earnings compared to the third quarter and firstnine months of last year.

Global Truck Market Update

Industry truck sales in Western Europe above 15 tonnes areexpected to be a record 255,000 units this year, a 7 percent increasefrom 2004 results. Preliminary estimates for Western Europe industrytruck sales above 15 tonnes in 2006 are 245,000-265,000. "DAF hasincreased market share due to its high-quality vehicles, comprehensiveaftermarket programs and an expanding independent dealer network,"said Aad Goudriaan, DAF Trucks president. "DAF's year-to-dateheavy-duty market share is 13.6 percent -- significantly higher thanits record level of 12.8 percent in 2004. DAF's long-term goal is toachieve over 20 percent market share, which is comparable to PACCAR'sClass 8 results in North America."

To expand its already extensive product line, DAF recentlyintroduced the new XF105 model powered by the new 12.9 litre PACCAR MXengine, available in both Euro 4 and Euro 5 specifications. Productionof the DAF XF105 will commence in the first quarter of 2006 and setsthe standard for quality, efficiency, comfort and drivability.

In the U.S. and Canada, industry Class 8 retail sales for 2005 areexpected to be about 290,000 units, nearly 25 percent higher than ayear ago. For 2006, industry sales could be 290,000-310,000 units ascustomers continue to update their fleets and satisfy the needs of agrowing economy. "Healthy freight volumes, strong carrierprofitability and equipment replacement cycles are driving higherindustry sales," explained Tom Plimpton, president. "Kenworth andPeterbilt truck deliveries have increased in all customer segmentsincluding for-hire carriers, private fleets, vocational customers andleasing companies."

PACCAR continues to be recognized as the highest-qualitymanufacturer in the industry. Kenworth Truck Company earned three J.D.Power awards in 2005 by achieving the highest ranking in customersatisfaction among Class 8 truck owners in the Over the Road, Pickupand Delivery, and Dealer Service segments according to the recentlyreleased J.D. Power and Associates Heavy-Duty Truck CustomerSatisfaction Study(sm)(a). Additional information is available atJDPower.com.

2007 Engine Emission Outlook

PACCAR, in tandem with its major engine suppliers Cummins andCaterpillar, is actively testing engine and aftertreatment systems tomeet more stringent federal emissions regulations in effect January2007. "This is another step in the regular engine development cyclethat the industry addresses every few years," said Tom Plimpton."There will be cost increases due to the advanced engineeringsolutions, but that cost is typically passed along the logisticschain. General economic growth should normalize industry sales duringthe 2005-2007 ordering cycle."

PACCAR Technology

InformationWeek magazine recently announced that PACCAR is the #1technology integrator in the automotive industry and one of thetechnology leaders in all industries. InformationWeek reviews thestrategies, investments and practices of companies in 21 differentindustries. "PACCAR collaborates with innovative companies such asDell and Microsoft during the development of new IT products," notedJanice Skredsvig, vice president and CIO. "PACCAR's technologyinvestments have accelerated product development cycles, increasedmanufacturing efficiencies, enhanced product quality and streamlinedaftermarket customer support." Additional details about therecognition are available at InformationWeek.com.

Information technology is applied in all facets of PACCAR'sbusiness to generate the highest quality processes and products in theindustry. As an example, the company's production facility at Leyland,U.K. designed and implemented sophisticated robots for paintingvehicle chassis on a moving line -- a first for the automotiveindustry. "This advanced technology improves quality, acceleratesvehicle throughput and reduces material usage," said George West,PACCAR vice president, manufacturing. "PACCAR's innovative approach tointegrating technology into the vehicle assembly process led AssemblyMagazine to name PACCAR as one of the Top 50 global manufacturers andto recognize the Kenworth Renton facility as the first recipient oftheir Plant of the Year award." Article details can be reviewed atAssemblyMag.com.

PACCAR Financial Services Results

PACCAR Financial Services has a portfolio of 137,000 trucks andtrailers, with total assets of more than $7.9 billion. Included inthis segment is PACCAR Leasing, a major full-service truck leasingcompany in North America, with a fleet of over 21,500 vehicles.

Pretax income of $47.2 million increased 7 percent from $44.1million in the third quarter of 2004. Third quarter revenues rose to$195.6 million compared to $143.1 million in the same quarter of 2004.For the nine-month period, revenues increased to $549.5 million from$403.5 million during the same period a year ago and pretax incomejumped by 17 percent to a record $144.4 million compared to $122.9million in 2004.

"PACCAR Financial Services profitably supports the sale of PACCARvehicles in 15 countries with an extensive array of finance, lease andinsurance products," said Ken Gangl, senior vice president. "A growingasset base and strong finance margins have contributed to outstandingprofitability. Higher levels of loan and lease applications areefficiently processed using automated credit scoring technology."

"PACCAR Financial Europe (PFE) assets have grown to $1.75 billionas DAF dealers and its customers have made PFE the leading Europeancommercial vehicle finance company focusing on DAF's premiumequipment," added Gangl. The PacLease network has grown to 215locations to support a record number of Peterbilt and Kenworth trucksoperating in North America.

PACCAR is a global technology leader in the design, manufactureand customer support of high-quality light-, medium- and heavy-dutytrucks under the Kenworth, Peterbilt and DAF nameplates. It alsoprovides financial services and information technology and distributestruck parts related to its principal business.

PACCAR will hold a conference call with securities analysts todiscuss third quarter earnings on October 25, 2005, at 9:00 a.m.Pacific time. Interested parties may listen to the call by selecting"Live Webcast" at PACCAR's homepage. The Webcast will be available ona recorded basis through November 1, 2005.

PACCAR shares are traded on the Nasdaq Stock Market, symbol PCAR,and its homepage can be found at www.paccar.com.

This release contains "forward-looking statements" within themeaning of the Private Securities Litigation Reform Act. Thesestatements are based on management's current expectations and aresubject to uncertainty and changes in circumstances. Actual resultsmay differ materially from those included in these statements due to avariety of factors. More information about these factors is containedin PACCAR's filings with the Securities and Exchange Commission.

(a) J.D. Power and Associates 2005 Heavy Duty Truck Study(sm).Study based on 2,429 responses from principal maintainers ofheavy-duty trucks.
PACCAR Inc
SUMMARY INCOME STATEMENTS
(in millions except per share amounts)

Three Months Ended Nine Months Ended
September 30 September 30
------------------------------------
2005 2004 2005 2004
-------- --------- -------- --------
Truck and Other:
Net sales and revenues $3,345.4 $2,774.7 $9,872.9 $7,802.4
Cost of sales and revenues 2,842.5 2,378.9 8,408.6 6,677.6
Selling, general and
administrative 102.8 94.8 315.8 285.4
Interest and other, net 6.0 .8 9.0 7.2
--------------------------------- -------- --------- -------- --------
Truck and Other Income Before
Income Taxes 394.1 300.2 1,139.5 832.2

Financial Services:
Revenues 195.6 143.1 549.5 403.5

Interest and other 112.4 74.1 311.2 210.5
Selling, general and
administrative 21.5 20.3 63.0 59.1
Provision for losses on
receivables 14.5 4.6 30.9 11.0
--------------------------------- -------- --------- -------- --------
Financial Services Income Before
Income Taxes 47.2 44.1 144.4 122.9

Investment income 13.7 16.1 39.9 46.5
--------------------------------- -------- --------- -------- --------
Total Income Before Income Taxes 455.0 360.4 1,323.8 1,001.6

Income taxes (A) 150.2 113.7 503.5 336.2
--------------------------------- -------- --------- -------- --------
Net Income $ 304.8 $ 246.7 $ 820.3 $ 665.4
================================= ======== ========= ======== ========

Net Income Per Share:
Basic $ 1.79 $ 1.42 $ 4.76 $ 3.81
================================= ======== ========= ======== ========
Diluted $ 1.78 $ 1.41 $ 4.73 $ 3.78
================================= ======== ========= ======== ========
Weighted Average Shares
Outstanding:
Basic 170.6 173.9 172.5 174.7
================================= ======== ========= ======== ========
Diluted 171.7 175.0 173.6 175.9
================================= ======== ========= ======== ========
Dividends declared per share $ .21 $ .20 $ .62 $ .55
================================= ======== ========= ======== ========

(a) Income taxes for the nine months ended September 30, 2005 includes
a $64.0 provision for repatriation of foreign earnings. Income
taxes for the three and nine months ended September 30, 2004
includes a $9.5 benefit related to higher expected utilization of
net operating loss carryforwards in the United Kingdom.



PACCAR Inc
SUMMARY BALANCE SHEETS
(in millions of dollars)
September December
30 31
2005 2004
----------- ---------
ASSETS

Truck and Other:
Cash and marketable debt securities $ 1,708.9 $ 2,184.1
Trade and other receivables, net 775.0 538.7
Inventories 586.5 495.6
Property, plant and equipment, net 1,093.3 1,037.8
Equipment on lease, taxes and other 968.5 991.7
Financial Services Assets 7,911.3 6,980.1
------------------------------------------------ ----------- ---------
$13,043.5 $12,228.0
================================================ =========== =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Truck and Other:
Accounts payable, deferred revenues and other $ 2,797.0 $ 2,693.5
Dividend payable 347.8
Term debt 28.8 36.2
Financial Services Liabilities 6,189.7 5,388.1
STOCKHOLDERS' EQUITY 4,028.0 3,762.4
------------------------------------------------ ----------- ---------
$13,043.5 $12,228.0
================================================ =========== =========
Common Shares Outstanding 169.3 173.9
------------------------------------------------ ----------- ---------

GEOGRAPHIC REVENUE DATA

Three Months Ended Nine Months Ended
September 30 September 30
----------------------------------------------------------------------
2005 2004 2005 2004
-------------------------------- -------- --------- --------- --------
United States $1,856.0 $1,510.5 $ 5,327.9 $3,979.5
Europe 917.9 809.1 3,016.2 2,628.9
Other 767.1 598.2 2,078.3 1,597.5
-------------------------------- -------- --------- --------- --------
$3,541.0 $2,917.8 $10,422.4 $8,205.9
================================ ======== ========= ========= ========