Press Release: PACCAR

Press Release: PACCAR
Date of Release: Oct 30, 2001
Confirms at AA (low) and R-1 (middle)

Kam Hon, Bob Weir / 416-593-5577 ext.2243, ext.2236 / e-mail:
khon@dbrs.com

PACCAR Inc
Rating	Trend	Rating Action	Debt Rated	
AA (low)	Stable	Confirmed	Corporate Rating	
PACCAR of Canada Ltd.
Rating	Trend	Rating Action	Debt Rated	
R-1 (middle)	Stable	Confirmed	Commercial Paper	
PACCAR Financial Services Ltd.
Rating	Trend	Rating Action	Debt Rated	
R-1 (middle)	Stable	Confirmed	Commercial Paper	

DBRS is confirming the above ratings all with Stable trends. The
commercial paper rating of PACCAR of Canada Ltd. and PACCAR Financial
Services Ltd. is based on the parent, PACCAR Inc. ("PACCAR" or "the
Company"). The corporate rating of PACCAR is confirmed with a Stable
trend. The confirmation reflects the Company's strong market position,
competitive cost structure and strong financial position.
Lower freight tonnage due to a slowing economy, higher operating costs
and high used truck inventory all contributed to depress demand and
pricing in 2001. Although the Company responded by curtailing production
and stepping up cost reduction efforts, operating income still reported
a substantial decline and return on equity (on a rolling 12 month basis)
dropped to 10.8% from an average of over 20% for the last five years.
Despite the sharp drop, PACCAR's results were still ahead of its major
competitors. Although the Company has a strong competitive position,
which is further strengthened by ongoing benefits from cost reduction
efforts, PACCAR's profitability is not expected to show meaningful
improvement until the truck market recovers. The Company continues to
have a very strong balance sheet and remains virtually debt free (cash
and marketable securities exceeds non-finance debt). With no major
capital project planned in the near future or in the absence of any
acquisitions, the Company is expected to continue to generate
substantial free cash flow. The balance sheet should stay strong.
Dominion Bond Rating Service Limited (DBRS) will publish a full report
shortly that will provide additional analytical detail on this rating
action. If you are interested in receiving this report, please contact
us at: info@dbrs.com.

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