PACCAR Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>PACCAR Inc. filed its Q1 2024 10-Q, detailing financial activities and segment performance.</b>

AI Summary

PACCAR INC (PCAR) filed a Quarterly Report (10-Q) with the SEC on May 2, 2024. PACCAR Inc. filed a 10-Q report for the period ending March 31, 2024. The filing includes data related to financial assets, liabilities, and hedging instruments. Specific segments mentioned include Truck Parts and Other, and Financial Services. The report references accounting standards updates, including ASU 2022-02. Key dates and periods covered range from 2023-01-01 to 2024-03-31.

Why It Matters

For investors and stakeholders tracking PACCAR INC, this filing contains several important signals. This filing provides a detailed look at PACCAR's financial health and operational segments for the first quarter of 2024, crucial for investors assessing performance and future outlook. The inclusion of specific financial instruments and accounting standard references offers insights into risk management strategies and compliance with current financial regulations.

Risk Assessment

Risk Level: medium — PACCAR INC shows moderate risk based on this filing. The filing contains extensive financial data and references to various financial instruments and accounting standards, indicating a complex financial structure that requires careful analysis to fully assess risks.

Analyst Insight

Investors should review the detailed financial statements and risk factor disclosures within the 10-Q to understand PACCAR's current financial position and operational performance.

Revenue Breakdown

Key Numbers

• 2024-03-31 — Period End Date (Current period for the 10-Q filing)
• 2023-12-31 — Previous Year End Date (Reference date for comparative data)
• 2023-03-31 — Prior Year Quarter End Date (Reference date for comparative data)
• 2023-01-01 — Start of Comparative Period (Beginning of periods for financial data comparison)

Key Players & Entities

• PACCAR INC (company) — Filer name
• 0000075362 (company) — Central Index Key
• 2024-03-31 (date) — Period of report
• 2024-05-02 (date) — Filed as of date
• DE (jurisdiction) — State of incorporation
• Bellevue, WA (location) — Business address city and state
• 1934 Act (regulation) — SEC Act
• ASU 2022-02 (regulation) — Accounting Standards Update

FAQ

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q.
• 2024-05-02: Filing Date — Date the 10-Q was officially filed with the SEC.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC). (Provides a snapshot of the company's financial performance and position during the quarter.)

ForeignExchangeContractMember

A financial contract used to manage risks associated with fluctuations in foreign currency exchange rates. (Indicates PACCAR's use of hedging strategies to mitigate currency risks.)

Key Financial Figures

• $1 — nge on Which Registered Common stock, $1 par value PCAR The Nasdaq Stock Mar

Filing Documents

• pcar-20240331.htm (10-Q) — 3851KB
• pcar-ex10_d.htm (EX-10.D) — 59KB
• pcar-ex31_a.htm (EX-31.A) — 18KB
• pcar-ex31_b.htm (EX-31.B) — 18KB
• pcar-ex32.htm (EX-32) — 24KB
• 0000950170-24-052081.txt (&nbsp;) — 17601KB
• pcar-20240331.xsd (EX-101.SCH) — 1557KB
• pcar-20240331_htm.xml (XML) — 4908KB

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS: Consolidated Statements of Comprehensive Income – Three Months Ended March 31, 2024 and 2023 (Unaudited) 3 Consolidated Balance Sheets – March 31, 2024 (Unaudited) and December 31, 2023 4 Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2024 and 2023 (Unaudited) 6 Consolidated Statements of Stockholders' Equity – Three Months Ended March 31, 2024 and 2023 (Unaudited) 7

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 8 ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 31 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 44 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 44 PART II. OTHER INFORMATION: ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 45 ITEM 1A.

RISK FACTORS

RISK FACTORS 45 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES 45 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 45 ITEM 4. MINE SAFETY DISCLOSURES 45 ITEM 5. OTHER INFORMATION 45 ITEM 6. EXHIBITS 46 INDEX TO EXHIBITS 46 SIGNATURE 48 - 2 -

– FINANCI AL INFORMATION

PART I – FINANCI AL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Consolidated Statements of Com prehensive Income (Unaudited) (Millions, Except Per Share Amounts) Three Months Ended March 31 2024 2023 TRUCK, PARTS AND OTHER: Net sales and revenues $ 8,235.0 $ 8,050.1 Cost of sales and revenues 6,673.8 6,493.1 Research and development 105.5 97.2 Selling, general and administrative 147.6 159.8 Interest and other (income) expenses, net ( 27.0 ) 578.8 6,899.9 7,328.9 Truck, Parts and Other Income Before Income Taxes 1,335.1 721.2 FINANCIAL SERVICES: Interest and fees 303.4 208.0 Operating lease, rental and other revenues 205.9 215.2 Revenues 509.3 423.2 Interest and other borrowing expenses 160.0 93.8 Depreciation and other expenses 180.3 142.3 Selling, general and administrative 39.0 35.2 Provision for losses on receivables 16.1 3.1 395.4 274.4 Financial Services Income Before Income Taxes 113.9 148.8 Investment income 85.5 49.0 Total Income Before Income Taxes 1,534.5 919.0 Income taxes 339.2 185.1 Net Income $ 1,195.3 $ 733.9 Net Income Per Share Basic $ 2.28 $ 1.40 Diluted $ 2.27 $ 1.40 Weighted Average Number of Common Shares Outstanding Basic 524.9 523.5 Diluted 526.3 524.4 Comprehensive Income $ 1,089.0 $ 814.1 See Notes to Consolidated Financial Statements. - 3 - Consolidated Balance Sheets (Millions) March 31 December 31 2024 2023 * (Unaudited) ASSETS TRUCK, PARTS AND OTHER: Current Assets Cash and cash equivalents $ 5,895.8 $ 6,836.7 Trade and other receivables, net (allowance for losses: 2024 - $ .9 , 2023 - $ .9 ) 2,410.9 2,198.1 Marketable securities 1,831.4 1,822.6 Inventories, net 2,742.6 2,576.7 Other current assets 622.4 680.6 Total Truck, Parts and Other Current Assets 13,503.1 14,114.7 Equipment on operating leases, net 112.7 127.6

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) (Millions, Except Share Amounts) NOTE A - Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. For further information, refer to the consolidated financial statements and footnotes included in PACCAR Inc's (PACCAR or the Company) Annual Report on Form 10K for the year ended December 31, 2023. Earnings per Share : Basic earnings per common share are computed by dividing earnings by the weighted average number of common shares outstanding, plus the effect of any participating securities. Diluted earnings per common share are computed assuming that all potentially dilutive securities are converted into common shares under the treasury stock method. The dilutive and antidilutive options are shown separately in the table below: Three Months Ended March 31, 2024 2023 Additional shares 1,439,200 958,300 Antidilutive options 671,000 889,000 New Accounting Pronouncements: In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . The amendments in this ASU improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for annual periods beginning after

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) (Millions, Except Share Amounts) The following table disaggregates Truck, Parts and Other revenues by major sources: Three Months Ended March 31, 2024 2023 Truck Truck sales $ 6,304.7 $ 6,206.0 Revenues from extended warranties, operating leases and other 236.3 207.8 6,541.0 6,413.8 Parts Parts sales 1,625.6 1,574.2 Revenues from dealer services and other 50.3 48.8 1,675.9 1,623.0 Winch sales and other 18.1 13.3 Truck, Parts and Other sales and revenues $ 8,235.0 $ 8,050.1 The Company recognizes truck and parts sales as revenues when control of the products is transferred to customers which generally occurs upon shipment, except for certain truck sales which are subject to a residual value guarantee (RVG) by the Company. The standard payment term for trucks and aftermarket parts is typically within 30 days, but the Company may grant extended payment terms on selected receivables. The Company recognizes revenue for the invoice amount adjusted for estimated sales incentives and returns. Sales incentives and returns are estimated based on historical experience and are adjusted to current period revenue when the most likely amount of consideration the Company expects to receive changes or becomes fixed. Truck and parts sales include a standard product warranty which is included in cost of sales. The Company has elected to treat delivery services as a fulfillment activity with revenues recognized when the customer obtains control of the product. Delivery revenue is included in revenues and the related costs are included in cost of sales. The Company is not disclosing truck order backlog, as a significant majority of the backlog has a duration of less than one year. Truck sales with RVGs that allow customers the option to return their truck are accounted for as a sale when the customer does not have an economic incentive to return the truck to the C

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) (Millions, Except Share Amounts) Revenues from extended warranties, operating leases and other include optional extended warranty and repair and maintenance (R&M) service contracts which can be purchased for periods generally ranging up to five years . The Company defers revenue based on stand-alone observable selling prices when it receives payments in advance and generally recognizes the revenue on a straight-line basis over the warranty or R&M contract periods. See Note F, Product Support Liabilities, in the Notes to the Consolidated Financial Statements for further information. Also included are truck sales with an RVG accounted for as an operating lease. A liability is created for the residual value obligation with the remainder of the proceeds recorded as deferred revenue. The deferred revenue is recognized on a straight-line basis over the guarantee period, which typically ranges from three to five years . Deferred revenue related to trucks sold with an RVG was $ 19.1 at March 31, 2024. The Company expects to recognize approximately $ 11.4 of the remaining deferred revenue in 2024, $ 5.0 in 2025, $ 1.8 in 2026, $ .8 in 2027 and $ .1 in 2028. Total operating lease revenue from truck sales with RVGs was $ 9.8 and $ 12.8 for the three months ended March 31, 2024 and 2023 , respectively. The Company's total commitment to acquire trucks at a guaranteed value for contracts accounted for as a lease was $ 108.1 at March 31, 2024. Revenue from winch sales and other is primarily derived from the industrial winch business. Winch sales are recognized when the product is transferred to a customer, which generally occurs upon shipment. Also within this category are other revenues not attributable to a reportable segment. Financial Services The Company's Financial Services segment products include loans to customers collateralized by the vehicles being financed, finance leases for retail customers and dealers,

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) (Millions, Except Share Amounts) The following table summarizes Financial Services lease revenues by lease type: Three Months Ended March 31, 2024 2023 Finance lease revenues $ 82.6 $ 54.9 Operating lease revenues 174.9 196.8 Total lease revenues $ 257.5 $ 251.7 NOTE C - Investments in Marketable Securities Debt Securities The Company's investments in marketable debt securities are classified as available-for-sale. These investments are stated at fair value and may include an allowance for credit losses. Changes in the allowance for credit losses are recognized in the current period earnings and any unrealized gains or losses, net of tax, are included as a component of accumulated other comprehensive income (loss) (AOCI). The Company utilizes third-party pricing services for all of its marketable debt security valuations. The Company reviews the pricing methodology used by the thirdparty pricing services, including the manner employed to collect market information. On a quarterly basis, the Company also performs review and validation procedures on the pricing information received from the thirdparty providers. These procedures help ensure the fair value information used by the Company is determined in accordance with applicable accounting guidance. The Company evaluates its investment in marketable debt securities at the end of each reporting period to determine if a decline in fair value is the result of credit losses or unrealized losses. In assessing credit losses, the Company considers the collectability of principal and interest payments by monitoring changes to issuers' credit ratings, specific credit events associated with individual issuers as well as the credit ratings of any financial guarantor. The Company considers its intent for selling the security and whether it is more likely than not the Company will be able to hold the security until the recovery of

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) (Millions, Except Share Amounts) UNREALIZED UNREALIZED FAIR At December 31, 2023 COST GAINS LOSSES VALUE Marketable debt securities U.S. tax-exempt securities $ 312.5 $ 1.2 $ 3.0 $ 310.7 U.S. taxable municipal / non-U.S. provincial bonds 244.9 .8 5.6 240.1 U.S. corporate securities 357.1 1.4 5.2 353.3 U.S. government securities 159.2 .6 1.7 158.1 Non-U.S. corporate securities 529.4 2.3 7.5 524.2 Non-U.S. government securities 141.0 1.5 1.3 141.2 Other debt securities 92.8 .3 2.5 90.6 Marketable equity securities 10.0 5.6 4.4 Total marketable securities $ 1,846.9 $ 8.1 $ 32.4 $ 1,822.6 The cost of marketable debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Amortization, accretion, interest and dividend income and realized gains and losses are included in investment income. The cost of securities sold is based on the specific identification method. Gross realized gains were $ .6 and $ .5 and gross realized losses were $ 1.8 and $ 1.6 for the three months periods ended March 31, 2024 and 2023, respectively. Net unrealized (losses) gains on marketable equity securities were $( 1.6 ) and $ .2 for the three months periods ending March 31, 2024 and 2023, respectively. Marketable debt securities with continuous unrealized losses and their related fair values were as follows: March 31, 2024 December 31, 2023 LESS THAN TWELVE MONTHS LESS THAN TWELVE MONTHS TWELVE MONTHS OR GREATER TWELVE MONTHS OR GREATER Fair value $ 564.3 $ 672.1 $ 289.0 $ 798.5 Unrealized losses 3.7 21.0 1.6 25.2 The unrealized losses on marketable debt securities above were due to higher yields on certain securities. The Company did not identify any indicators of a credit