PACCAR Soars to Record Revenues and Profits; Company Increases Regular Quarterly Dividend

"PACCAR (Nasdaq:PCAR) achieved record revenues and netincome for the first quarter of 2006," said Mark C. Pigott, chairmanand chief executive officer. "PACCAR's diversified businessesworldwide contributed to the stellar results this quarter. PACCARParts, PACCAR Financial Services, Information Technology and TruckManufacturing made strong contributions to the record net income.PACCAR's sales in North America, Europe and export markets areperforming well due to the company's industry-leading quality productsand services. PACCAR's focus on designing innovative products,utilizing advanced technology and delivering superior customer supporthas defined the company for over 100 years."

PACCAR earned $342.0 million ($2.02 per diluted share) for thefirst quarter 2006, an increase of 25 percent compared to the $274.0million ($1.56 per diluted share) earned in the first quarter of 2005.First quarter net sales and financial services revenues were $3.85billion versus $3.33 billion for the first quarter of last year. Thecompany's after-tax return on consolidated revenues (ROR) was a record8.9 percent in the first quarter of 2006 compared to 8.2 percent inthe first quarter of 2005. "The outstanding return on revenuescontinues to demonstrate that PACCAR is one of the leading industrialand financial services companies worldwide," said Mike Tembreull, vicechairman.

Quarterly Dividend Increased 20 Percent

The PACCAR Board of Directors approved an increase to the regularquarterly dividend from $.25 (twenty-five cents) per share to $.30(thirty cents) per share, effective with the dividend payment of June5, 2006, for shareholders of record May 18, 2006. PACCAR has raisedits regular quarterly dividend nine times in the last ten years, anincrease of 435 percent over the decade. PACCAR has paid a quarterlydividend every year since 1941.

Global Technology Leader

In a White House ceremony on February 13, 2006 President George W.Bush presented PACCAR with the National Medal of Technology, thenation's highest award for innovation. PACCAR earned the award for itsdecades of industry leadership in developing aerodynamic, lightweightcommercial vehicles which have dramatically reduced fuel consumption,increased the productivity of freight transportation and contributedto the strength of the nation's economy.

"PACCAR's technology leadership is a result of the innovation andcreativity of our 22,000 employees," said Pigott. "Innovation is oneof the company's defining characteristics and enables PACCAR to be aleader in every field in which it competes." PACCAR recently announceda number of exciting new initiatives which will continue to enhancethe exceptional value delivered to its customers:

-- PACCAR Hybrid Power will be installed in selected vehicles by 2008 and the company has established a goal of 30 percent fuel efficiency improvement for specific customer applications over the next seven years.

-- PACCAR's industry leading GPS Navigation system was introduced as standard on most models and will include touch screen menu control and programmable MP-3 capability.

-- DAF Trucks in Europe began production of its new XF105 flagship model powered by the new, fuel-efficient PACCAR MX 12.9-liter engine.

-- An electronic sales and finance office was added to PACCAR's Electronic Dealerships, where the company showcases advanced technology to support its 1,800 independent dealer locations. Over 11,000 dealers, customers, suppliers and employees have toured the Technology Centers.

-- Kenworth Truck Company unveiled its new model T660 with enhanced aerodynamics, superior forward lighting and increased driver comfort.

Financial Highlights - First Quarter 2006

PACCAR reported these key financial highlights for the firstquarter of 2006:

-- Record quarterly revenues of $3.85 billion.

-- Record quarterly net income of $342.0 million.

-- Excellent financial services pretax profits of $54.8 million.

-- An annualized return on beginning equity (ROE) of 35.1 percent.

-- Manufacturing SG&A expense to sales reached a record low 3.0 percent.

-- Shareholder's equity increased to over $4 billion.

PACCAR's global operating divisions sell into 100 countries andthe company's products have earned a reputation for durability andexcellent life-cycle costs. PACCAR's revenues from outside the UnitedStates during the first quarter were 49 percent of total revenues.

Revenues at PACCAR Parts, the company's aftermarket partsdivision, continued to increase in the first quarter as more dealersand customers use the company's proprietary inventory managementsoftware systems. PACCAR's aftermarket parts revenues were $1.7billion in 2005 and the compound annual growth rate (CAGR) in partssales has been nearly 14 percent over the past decade.

Share Repurchase

During the first quarter of 2006, PACCAR repurchased 2.5 millionof its common shares ($175 million invested) under a five millionshare program announced on October 25, 2005. "The share repurchaseprograms reinforce the fact that PACCAR is an excellent long-terminvestment. The company's goal is that its market valuation ratios beequal to other premier global industrial companies," noted Tembreull.PACCAR has returned over $1.4 billion to shareholders throughdividends and share repurchases during the past 15 months.

Industrial Ranking Increases Significantly

In its April 17, 2006 edition, Fortune magazine ranked PACCAR asthe 157th largest company in the Fortune 500 based on revenue during2005, up from 188th place in 2004. PACCAR was one of the leadingcompanies for return on revenue of the 28 OEM companies included inthe motor vehicle and parts sector. Over the last ten years, PACCARhas ranked in the top 20 percent for average annual EPS growth and thetop 5 percent in total return to investors for all companies in theFortune 500.

Capital Investment Increases Companywide

"PACCAR is earning record income due to the benefits of ongoingcapital investments throughout the company," said Tom Plimpton,president. "In order to further enhance its industry leadership,PACCAR will increase capital and expense investment by constructingnew facilities, accelerating product development, and growingfinancial services and technology platforms. Examples of theseinvestments are a new engine test center in Europe, 20 percentincrease in Kenworth manufacturing capacity, new parts distributioncenters, new aerodynamic and hybrid vehicles, PACCAR Leasingexpansion, and new finance and manufacturing information systems. Thecost of these exciting projects will increase research and developmentexpenses, but will position the company for even stronger growth inthe future."

Strong Growth of Global Commercial Vehicle Markets

"The global commercial vehicle industry is a growth business whichcontinues to benefit from strong demand," stated Jim Cardillo, seniorvice president. "Freight activity is robust and trucking companyprofits are at record levels," added Cardillo. "U.S. and CanadianClass 8 industry truck retail sales are projected to be290,000-310,000 units during 2006, an increase of approximately 5percent over 2005 levels. The Class 6-7 industry truck market in theU.S. and Canada for 2006 is expected to increase slightly to100,000-110,000 units."

"Over the last several years, the Western European truck markethas increased faster than Euro-zone GDP due to a growing transportsector and an expanding European economic trading block," commentedAad Goudriaan, DAF Trucks president. "For 2006, Western Europeanindustry truck deliveries above 15 tonnes are forecast to be245,000-265,000 vehicles, approximately equal to last year. DAF Truckshas increased its market share in each of the past six years, with anabove 15 tonne market share at a record 13.7 percent in 2005. Theindustry 6-15 tonne truck market in 2006 should be approximately75,000-80,000 units."

Financial Services Achieves Excellent Quarterly Earnings

PACCAR's financial services segment is comprised of a portfolio ofover 145,000 trucks and trailers, with total assets in excess of $8.6billion. Included in this segment is PACCAR Leasing, a majorfull-service truck leasing company in North America, with a portfolioof more than 23,000 vehicles.

Quarterly pretax income of $54.8 million increased 16 percentversus $47.3 million earned in the first quarter of 2005 due to higherasset levels and margins and continued low credit losses. Firstquarter revenues of $212.5 million increased 24 percent compared to$171.4 million in the same quarter of 2005.

"PACCAR Financial Services (PFS) companies offer an extensiveproduct line-up including finance, lease and insurance products in 15countries located on three continents," noted Ken Gangl, senior vicepresident. "PACCAR delivers superior customer service by focusing ontransportation finance, leasing and insurance packages for buyers ofpremium DAF, Kenworth and Peterbilt products. The company's excellentAA- credit rating allows PACCAR's finance and leasing companies tooffer competitive financing for its customers."

"As a growing part of the PFS group of companies, PACCAR Leasing(PacLease) is generating excellent results as the primary leasingcompany in the markets which specify Kenworth and Peterbilt products,"added Bob Southern, PacLease president. "The PacLease network hasgrown to 247 franchised and company-owned locations in Canada, theUnited States and Mexico."

PACCAR is a $14 billion global technology leader in the design,manufacture and customer support of high-quality light-, medium- andheavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates. Italso provides financial services and information technology anddistributes truck parts related to its principal business.

PACCAR will hold a conference call with securities analysts todiscuss first quarter 2006 earnings on April 25, 2006, at 8:00 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 May 2, 2006. PACCAR shares are traded on theNasdaq Stock Market, symbol PCAR, and its homepage can be found atwww.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.
PACCAR Inc
SUMMARY INCOME STATEMENTS
(in millions(a))

Three Months Ended March 31 2006 2005
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Truck and Other:
Net sales and revenues $3,639.2 $3,154.6
Cost of sales and revenues 3,098.9 2,689.7
Selling, general and administrative 109.6 107.1
Interest and other, net .4 .8
----------------------------------------------------------------------
Truck and Other Income Before Income Taxes 430.3 357.0
Financial Services:
Revenues 212.5 171.4
Interest and other 127.9 96.3
Selling, general and administrative 23.2 21.5
Provision for losses on receivables 6.6 6.3
--------------------------------------------------- --------- --------
Financial Services Income Before Income Taxes 54.8 47.3
Investment Income 15.6 11.8
--------------------------------------------------- --------- --------
Total Income Before Income Taxes 500.7 416.1
Income Taxes (b) 158.7 142.1
--------------------------------------------------- --------- --------
Net Income $ 342.0 $ 274.0
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Net Income Per Share:
Basic $ 2.03 $ 1.57
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Diluted $ 2.02 $ 1.56
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Weighted Average Shares Outstanding:
Basic 168.2 174.0
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Diluted 169.1 175.1
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Dividends declared per share $ .25 $ .20
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(a) Except per share amounts.

(b) Income taxes for the three months ended March 31, 2006 were
reduced $6.0 for a tax settlement. Excluding this settlement, the
effective tax rate for the quarter was 32.9%.





PACCAR Inc
CONDENSED BALANCE SHEETS
(in millions)

March 31 December 31
2006 2005
----------------------------------------------------------------------
ASSETS
Truck and Other:
Cash and marketable debt securities $ 2,085.3 $ 2,215.8
Trade and other receivables, net 827.4 582.2
Inventories 502.5 495.5
Property, plant and equipment, net 1,162.1 1,143.0
Equipment on operating leases, taxes and other 944.7 923.0
Financial Services Assets 8,620.4 8,355.9
----------------------------------------------------------------------
$ 14,142.4 $ 13,715.4
======================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Truck and Other:
Accounts payable, deferred revenues and other $ 2,945.2 $ 2,589.3
Dividend payable 338.7
Term debt 28.9 28.8
Financial Services Liabilities 7,092.6 6,857.5
STOCKHOLDERS' EQUITY 4,075.7 3,901.1
----------------------------------------------------------------------
$ 14,142.4 $ 13,715.4
======================================================================
Common Shares Outstanding 166.7 168.9
----------------------------------------------------------------------
GEOGRAPHIC REVENUE DATA
Three Months Ended March 31 2006 2005
----------------------------------------------------------------------
United States $ 1,974.6 $ 1,641.6
Europe 1,115.2 1,038.5
Other 761.9 645.9
----------------------------------------------------------------------
$ 3,851.7 $ 3,326.0
======================================================================





PACCAR Inc
CONDENSED CASH FLOW STATEMENT
(in millions of dollars)

Three Months Ended March 31 2006 2005
----------------------------------------------------------------------
OPERATING ACTIVITIES:
Net income $ 342.0 $ 274.0
Depreciation and amortization:
Property, plant and equipment 37.0 33.0
Equipment on operating leases and other 63.2 58.5
Net change in wholesale receivables on new trucks (34.5) (138.5)
Net change in sales-type finance leases and dealer
direct loans on new trucks 13.9 16.4
All other operating activities 57.8 (59.3)
----------------------------------------------------------------------
Net Cash Provided by Operating Activities 479.4 184.1

INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (43.4) (56.9)
Acquisition of equipment for operating leases (118.0) (92.9)
Net change in financial services receivables (120.7) (162.4)
Net change in marketable securities (173.4) 153.2
All other investing activities 38.8 22.0
----------------------------------------------------------------------
Net Cash Used in Investing Activities (416.7) (137.0)

FINANCING ACTIVITIES:
Cash dividends paid (380.8) (382.6)
Purchase of treasury stock (185.8) (26.9)
Stock option transactions 14.3 13.9
Net change in financial services debt 167.2 207.6
----------------------------------------------------------------------
Net Cash Used in Financing Activities (385.1) (188.0)
Effect of exchange rate changes on cash 13.7 (44.4)
----------------------------------------------------------------------
Net Decrease in Cash and Cash Equivalents (308.7) (185.3)
Cash and cash equivalents at beginning of period 1,698.9 1,614.7
----------------------------------------------------------------------
Cash and cash equivalents at end of period $1,390.2 $1,429.4
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