PACCAR Inc.

Good morning and welcome to Pat Carr's third quarter 2026 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, Pat Carr's Director of Investor Relations. Mr. Hastings, please go ahead. We are now experiencing some technical difficulties Please stand by while we pause the broadcast Just one moment Hello everyone and thank you for holding. Good morning and welcome to PACCAR's third quarter 2026 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.

Thank you, Joel, and good morning, everyone. My name is Ken Hastings, PACCAR's Director of Investor Relations. And joining me this morning are Preston Feight, Chief Executive Officer, Kevin Baney, President, and Brice Poplawski, Senior Vice President and Chief Financial Officer. 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 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 Feight.

Hey, thank you, Ken, and good morning, everyone. Kevin, Brice, Ken, and I will update you on Packard's excellent third quarter financial results and business highlights. I'd like to start by thanking our wonderful employees all around the world who did a fantastic job of providing our customers with the highest quality trucks and transportation solutions in the industry. Packard delivered excellent revenues of $7.94 billion and net income of $847.5 million in the third quarter. This is 19% revenue growth and 44% profit growth compared to the same period last year. Packard Parts had record quarterly revenues of $1.78 billion, and Packard Financial Services, $138 million in profit, was an increase of 9.4% compared to the same period last year. We estimate this year's U.S. and Canadian Class 8 markets to be in a range of 240,000 to 260,000 trucks and next year to grow and be in a range of 240,000 to 280,000. The U.S. and Canadian truck market is being driven by economic growth, continued investments in infrastructure, and the general freight market recovery. In Europe, we project this year's above-1610 market to be in a range of 300,000 to 320,000 units and in a similar range for 2027. This represents continued truck replacement in a region with steady economic growth. We estimate this year's South American above 16-ton truck market to be in the range of 100,000 to 105,000 vehicles and next year to be up slightly and in the range of 105,000 to 115,000 trucks. Packard's premium trucks are performing very well for customers throughout all of Latin America. Based on strong customer orders, PACCAR increased deliveries to 40,100 trucks in the third quarter. Delivery volume will increase in the fourth quarter as suppliers become more able to ramp up their production to meet continued strong customer demand. Fourth quarter deliveries are anticipated to increase and be in the range of 41,000 to 43,000. PACCAR's third quarter trucks, part and other gross margins were a strong 14.5%. Thank you, Preston.