PACCAR Inc.

Good morning and welcome to PACCAR's second quarter 2022 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, PACCAR's Director of Investor Relations, and joining me this morning are Preston Fite, Chief Executive Officer, Harry 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 at paccar.com. I would now like to introduce Preston Fite.

Good morning. Harry Skippers, Michael Barkley, and I will update you on our second quarter financial results and business highlights. I truly appreciate PACCAR's outstanding employees around the world who continue to deliver excellent results in the highest quality trucks and transportation solutions. PACCAR achieved record revenues and net income in the second quarter. PACCAR's revenues increased 23% to $7,160,000,000. Net income increased 45% to $720,000,000. PACCAR parts second quarter revenues increased by 18% to a record $1.43 billion. Parts pre-tax profits were a record $353 million, 32% higher than the same period last year. Truck parts and other gross margins expanded to 14.4% in the second quarter, compared to 13.5% in the second quarter of last year. Packard's increased vehicle production, new lineup of premium trucks, and strong aftermarket parts business drove the higher gross margins. Packard Financial had an excellent quarter, increasing year-over-year pre-tax income by 36% to $144 million due to its high-quality portfolio and strong used truck results. PACCAR is an industry leader in diesel and zero-emissions powertrains, autonomous trucks, and next-generation connected services. PACCAR's best-in-class new trucks, its new clean diesel and electric powertrain lineup, and its ongoing research and development programs provide our customers with the right products and technology to help them optimize their operations. The entire PACCAR team has done an excellent job of working with our suppliers to manage supply-based shortages, and we have been able to gradually increase daily truck production. In the US economy, unemployment remains low, GDP is estimated to grow, and industrial production is projected to expand. Based on this favorable operating environment, we estimate the U.S. and Canadian Class VIII market to be in the range of 260,000 to 290,000 trucks. The European and U.K. economies are also growing, with Eurozone unemployment at low levels. The 2022 European truck market is expected to be in the range of 270,000 to 300,000 trucks. Looking at PACCAR's operating environment, Our new generation of trucks in Europe and North America are providing our customers the benefit of owning the most desirable and most efficient trucks in the industry. Great tonnage remains at great levels. We're sold out for the year, and the first quarter is beginning to fill in nicely. With fleet age up and truck utilization high, we anticipate continued strong demand for Packard parts, trucks, and financial services. Thank you. Harry Skippers will now provide an update on Packard Parts, Packard Financial Services, and other business highlights. Harry?