Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2024

EBP 002

EBP, Investment, Fair Value and NAV [Line Items]

Fair Value of Financial Instruments

4. Fair Value of Financial Instruments

Fair value represents the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. The hierarchy of fair value measurement is described below.

Level 1 – Valuations are based on quoted prices that the Plan has the ability to obtain in actively traded markets for identical assets. 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. The Plan had no financial instruments requiring Level 2 valuation.

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 Plan had no financial instruments requiring Level 3 valuation.

The following methods and assumptions are used to measure fair value for assets subject to recurring fair value measurements:

The fair value of a money market fund, mutual funds, and PACCAR Inc common stock is based on quoted prices in active markets. These are categorized as Level 1.

The fair value of commingled trust funds is determined using the market approach and is based on the unadjusted net asset value (NAV) per unit as determined by the sponsor of the fund based on the fair values of underlying investments. These assets are collective investment trusts, and substantially all of these investments have no redemption restrictions or unfunded commitments. Securities measured at NAV per unit as a practical expedient are not classified in the fair value hierarchy.

The Plan’s assets subject to recurring fair value measurements at December 31, 2024 are as follows:

	Fair Value
	Hierarchy		Measured at
	Level 1		NAV		Total
Financial instruments, at fair value:
U.S. money market fund	$	563,134			$	563,134
Commingled trust funds:
U.S.			$	806,333,673		806,333,673
International				32,997,272		32,997,272
U.S. mutual funds:
Equity		62,723,278				62,723,278
Fixed income		30,068,706				30,068,706
Asset allocation		528,892,484				528,892,484
PACCAR Inc common stock		1,331,364,750				1,331,364,750
	$	1,953,612,352	$	839,330,945	$	2,792,943,297

4. Fair Value of Financial Instruments (continued)

The Plan’s assets subject to recurring fair value measurements at December 31, 2023 are as follows:

	Fair Value
	Hierarchy		Measured at
	Level 1		NAV		Total
Financial instruments, at fair value:
U.S. money market fund	$	281,479			$	281,479
Commingled trust funds:
U.S.			$	688,802,430		688,802,430
International				29,851,313		29,851,313
U.S. mutual funds:
Equity		57,773,487				57,773,487
Fixed income		30,087,543				30,087,543
Asset allocation		478,111,061				478,111,061
PACCAR Inc common stock		1,279,431,089				1,279,431,089
	$	1,845,684,659	$	718,653,743	$	2,564,338,402