PACCAR Inc.

Good morning, and welcome to PACAR's first quarter 2024 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 any objection, they should disconnect at this time. I'd now like to introduce Mr. Ken Hastings, PACAR'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, 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 Bryce Poposky, Vice President and Controller. As with prior conference calls, we'll 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 considerations 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.

Hey, good morning. Harry, Bryce, Ken, and I will update you on our excellent first quarter results and business highlights. I'd like to begin by thanking PACCAR's outstanding employees. who do a great job providing our customers with the highest quality trucks and transportation solutions in the industry. PACCAR achieved excellent revenues and net income in the first quarter due to the strong performance of its truck, aftermarket parts, and financial services businesses. PACCAR achieved revenues of $8.74 billion and net income of $1.2 billion. This is comparable to adjusted net income of $1.18 billion in the first quarter of last year. Truck parts and other gross margins were 19% in the first quarter. PACCAR's margin is benefiting from investments in new truck models, good global performance, and PACCAR parts continued growth. PACCAR parts achieved record quarterly pre-tax income of $456 million, 6% higher than the $439 million earned in the first quarter of 2023. 2024 quarterly parts revenues increased to $1.68 billion, and we are pleased with the continued growth at Packard Parts after a record-setting 2023. Packard Financial had a good quarter, achieving pre-tax income of $114 million. These results are comparable to the fourth quarter of 2023. Looking at the U.S. economy, GDP is estimated to grow 2.4% this year, with a resilient labor market and healthy consumer spending. The vocational sector, where Peterbilt and Kenworth are the market leaders, remains strong with continued infrastructure investments. The less than truckload market is also performing well, while being offset by a softer truckload segment. Kenworth and Peterbilt's share in the first quarter was 30.3%, up from 27% in the same period last year. Overall, we estimate this year's U.S. and Canadian Class VIII market to be in a range of 250,000 to 290,000 trucks. In the medium-duty markets, the new best-in-class Kenworth and Piedmont models increase their combined first-quarter share to 17%. We expect this year's medium-duty market to be around 100,000 units. In Europe, economies and the truck market are softer this year. DOF's premium new trucks provide customers with the latest technology and best operating efficiency. We project the 2024 European above 16-ton market to be in a range of 260,000 to 300,000 trucks. The South American above 16-ton truck market is expected to be in the range of 105,000 to 115,000 vehicles this year. In Brazil, DOF achieved a record 10.7% share in the first quarter, compared to 8.6% in the same period last year. DOF trucks are highly desired by customers in South America, and the region is an important part of PACCAR's growth and success. In the third quarter of last year, PACCAR announced a commercial vehicle battery joint venture, and construction of the 21 gigawatt hour factory, located in Mississippi, is expected to begin this quarter. PACCAR anticipates investing six to 900 million over the next several years in this factory to create cost-efficient commercial vehicle batteries. PACCAR's industry-leading trucks, expanding parts business, best-in-class financial services, and advanced technology strategy position the company well for an excellent future. Harry Skippers will now provide an update on truck deliveries, PACCAR parts, PACCAR financial services, and other business highlights. Harry?