PACCAR Inc.

Good morning and welcome to PACCAR's third quarter 2021 earnings conference call. All lines will be in a listen-only mode until the question and answer session. Today's call is being recorded, and if anyone has an objection, they should disconnect at this time. I would now like to introduce Mr. Ken Hastings, PACCAR's Director of Investor Relations. Mr. Hastings, please go ahead.

Good morning. We would like to welcome those listening by phone and those on the webcast. My name is Ken Hastings. Packard's Director of Investor Relations. And joining me this morning are Preston Fite, Chief Executive Officer, Terry Skippers, President and Chief Financial Officer, and Michael Barkley, Senior Vice President and Controller. As with prior conference calls, we ask that any members of the media on the line participate in a listen-only mode. Certain information presented today will be forward-looking and involve risks and uncertainties. including general economic and competitive conditions that may affect expected results. For additional information, please see our SEC filings and the investor relations page of PACCAR.com. I would now like to introduce Preston Feith.

Good morning. Thank you all for joining the call. Harry Skippers, Michael Barkley, and I will update you on our good third quarter results and business highlights. I appreciate our outstanding employees around the world who are managing through the supply-based constraints to deliver the highest quality trucks, parts, and financial services solutions to our customers. And I'd also like to thank Packard's dealers and suppliers for their contributions and support during these dynamic times. Packard's good quarterly revenues and net income in the third quarter reflect sales and profit records at Packard Parts and Packard Financial Services. The economies and freight markets continue to be robust in all of Packard's geographic markets. Packard's having a tremendous year of new product introductions and demand for the new Kenworth, Peterbilt, and Dock trucks is excellent. Packard's third quarter sales and financial services revenues were $5.2 billion, and third quarter net income was $378 million. Packard Parts achieved record quarterly revenues of $1.26 billion, and record pre-tax profits of $281 million. Packard Financial achieved record pre-tax income of $120 million. The record-setting, parts, and financial services results illustrate the strength of Packard's businesses. With the strong order backlogs, growth in the truck divisions will accelerate as the supply of semiconductors improves. We estimate Class VIII industry retail sales in the U.S. and Canada to be in a range of 230,000 to 250,000 trucks this year. Peterbilt and Kenworth have achieved 29.6% market share through September. Although build is still expected to be limited by semiconductor supply in the fourth quarter, the good news is that we're starting to see improvements in the supply chain. We forecast the 2022 U.S. and Canadian Class A truck market to be in the range of 250,000 to 290,000 vehicles. In Europe, this year's truck industry registrations in the above 16-ton market are estimated to be in a range of 260,000 to 280,000 vehicles. The off-year-to-date market share is 15.8%. The 2022 market is expected to be in the range of 260,000 to 300,000 trucks. The South American above 16-ton market is projected to be in a range of 120,000 to 130,000 trucks this year. South Brazil's above 16 ton market share through September was 5.6%. The South American above 16 ton truck market is estimated to be in a range of 130,000 to 140,000 trucks next year. The new Kenworth T680 and Peterbilt 579 trucks that began production in the third quarter are being well received by our customers. These trucks feature new styling, configurable digital instrumentation, advanced aerodynamics, distinctive LED forward lighting, and they provide up to 7% greater fuel efficiency. The new Kenworth and Peterbilt medium-duty trucks that also began production in the third quarter provide features that customers appreciate, such as a wider cab with three-person seating, lower cab heights for easier entry and exit, and new digital instrumentation. The exciting new DOT XF XG and XG Plus lineup feature luxurious interiors and beautiful exteriors that provide 10% greater fuel efficiency. The new DAF offers unsurpassed performance and value. DAF is the first truck manufacturer in the industry to have taken full advantage of Europe's new regulations governing truck design. And the new DAF trucks began production earlier this month. All of these new trucks position pack are very well for the future. Packard leads the industry with seven battery electric vehicle models now available. Kenworth, Peterbilt, and Doth have orders for several 100 zero emissions vehicles and have 90 trucks operating with customers. These include Kenworth T680 fuel cell trucks, Peterbilt battery electric model 579s, and Doth medium-duty battery electric trucks. Packard's advanced its autonomous truck program. by working with his partners, Aurora and FedEx, to launch a commercial pilot of autonomous vehicles into line haul operations. The Packard trucks are operating autonomously with a backup driver for safety as they haul freight on a 500-mile route between Dallas and Houston. Packard has launched an advanced global connected truck platform. Customers will benefit from the system's enhanced truck data security, advanced over-the-air software updates, elimination of the need for third-party hardware modules, and an open platform that supports existing fleet management systems. PACCAR's new proprietary connect system increases customer value, increases PACCAR's recurring revenue, and is part of PACCAR's digital transformation. We're pleased to share that PACCAR was recently recognized as a 2021 top company for women to work for in transportation by the Women in Trucking Association. We were honored for our excellent working environment and company culture that supports gender diversity. PACCAR is committed to hiring and promoting the most talented people in the world, and we know that the best people represent the diversity present in the global community. PACCAR continues to be an environmental leader. PACCAR is working with the Science-Based Targets Initiative and is committed to 2030 carbon reduction goals. PACCAR earned a CDP climate change score of A-, placing PACCAR in the top 15% of over 9,500 companies that publish reports to the CDP. 100% of PACCAR's manufacturing locations globally have environmental management programs certified under ISO 14001. Harry Skippers will now provide an update on PACCAR parts, PACCAR financial services, and other business highlights. Thank you. Harry, over to you.