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 six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. 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, 2025.

Equity Method Investment: In 2024, PACCAR and three partners completed the formation of a U.S.-based battery manufacturing joint venture, Amplify Cell Technologies, with PACCAR owning a 30 percent interest. The joint venture meets the definition of a variable interest entity since the equity-at-risk is not currently sufficient to support the future operations of the joint venture. All significant decisions require majority or super-majority approval of the board. As a result, PACCAR is not the primary beneficiary and the Company uses the equity method to account for the investment. Under the equity method, the original investments in the joint venture are recorded at cost and subsequently adjusted by the Company's share of equity in income or losses. The investment is included in Truck, Parts and Other "Other noncurrent assets, net" on the Company’s Consolidated Balance Sheets. PACCAR's share of the loss is included in Truck, Parts and Other "Interest and other (income) expenses, net" on the Company's Consolidated Statements of Income.

As of June 30, 2026, the Company has contributed $412.5 to the joint venture. PACCAR did not make contributions to the joint venture in the six months ended June 30, 2026 compared to $44.7 in the same period of 2025 and the maximum required contribution is $830.0. The Company's equity method investment, net of operating losses, was $367.6 and $379.4 at June 30, 2026 and December 31, 2025, respectively.

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.

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


	Three Months Ended				Six Months Ended
	June 30				June 30
	2026		2025		2026		2025
Additional shares		614,000		754,800		686,600		896,800
Antidilutive options		1,139,600		1,280,500		1,175,600		1,319,700

New Accounting Pronouncements: In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this ASU expand the disclosures in the notes to the financial statements about specific cost and expense categories presented on the face of the income statement. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented. The Company is currently evaluating the impact of this update on the related notes to the financial statements.

In May 2026, FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818). The amendments in this ASU establish guidance for the accounting and disclosure of environmental credits and environmental credit obligations. This ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods. The amendments in this ASU require that a business entity apply the guidance on a retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual period of adoption. The Company is currently evaluating the impact of this update on the consolidated financial statements.

The Company adopted the following standards on January 1, 2026, which had no impact on the Company's consolidated financial statements.


STANDARD		DESCRIPTION
2025-05		Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
2025-09		Derivatives and Hedging (Topic 815): Hedge Accounting Improvements

The FASB also issued the following standards, which are not expected to have a material impact on the Company's consolidated financial statements.


STANDARD	DESCRIPTION	EFFECTIVE DATE
2025-06*	Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software	January 1, 2028
2025-10*	Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities	January 1, 2029

* The Company will adopt on the effective date.