PACCAR Inc.

Good morning and welcome to PACCAR's third 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. Good morning. We'd like to welcome those listening by phone and those on the webcast. My name is Ken Hastings, PACR'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 of PACCAR.com. I would now like to introduce Preston Fite. Good morning.

Harry Skippers, Michael Barkley, and I will update you on our third quarter financial results and other business highlights. Well, I truly appreciate all of PACCAR's outstanding employees who delivered record third quarter results in the highest quality trucks and transportation solutions to our customers around the world. PACCAR's third quarter net income more than doubled to $769 million and revenues increased 37% to $7.06 billion. PACCAR parts pre-tax profits were a record $374 million, 32% higher than the same period last year. Parts third quarter revenues increased to a record $1.47 billion. Truck parts and other gross margins expanded to 14.9% in the third quarter, compared to 14.4% in the second quarter. Strong business operating conditions and Packer's increased mix of premium new truck models and excellent aftermarket parts business contributed to the higher gross margins. Packer Financial had a year-over-year pre-tax income increase of 22%, to $146 million, reflecting a high-quality portfolio and robust used truck results. We estimate this year's U.S. and Canadian Class 8 market to be in a range of 265,000 to 285,000 trucks, and next year to be in a range of 260,000 to 300,000. Overall, the strong truck market is expected to continue as a result of the solid freight volumes, high customer truck utilization, and the increased fleet age. Customers are replacing their trucks with the new Peterbilt and Kenworth models that enhance their operational efficiencies, achieve industry-leading fuel economy, and attract and retain the best drivers. Kenworth and Peterbilt now have a backlog that extends into the second quarter of 2023. In Europe, this year's truck industry registrations in the above 16-ton segment are estimated to be in a range of 275,000 to 295,000 vehicles. Like in the U.S., freight demand and customer utilization remains high. The 2023 market is expected to be in the range of 260,000 to 300,000 trucks. DOF's year-to-date market share has increased to 17.4% compared to 15.8% a year ago. This growth reflects the exceptional performance of DOF's industry-leading and award-winning new XF and XG trucks that began production at the end of last year. DOF recently introduced a new XD distribution and vocational truck product line. The new DOF XD models earned the 2023 International Truck of the Year award at this year's truck show in Germany. The new XD lineup begins production this quarter. The complete new range of DOF trucks offers customers in Europe the only trucks that utilize the new masses and dimensions regulations and are differentiated from the competition due to their more aerodynamic design, superior safety features, and spaciousness for the driver. These trucks provide our customers the most fuel-efficient, driver-friendly premium trucks in the European market. The South American above-16 ton market is projected to be in a range of 125,000 to 135,000 trucks this year, and in a similar range next year. In Brazil, DOPS above 16 ton market share through September was a record 6.9% compared to 5.6% last year. The outstanding PACCAR team and dealers around the world are performing well and delivering excellence to our customers. Thank you. Harry Skippers will now provide an update on PACCAR parts, PACCAR financial services, and other business highlights. Harry?