PACCAR INC [PCAR] Filings

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended September 30, 2023

OR

 

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from to

 

Commission File No. 001-14817

 

PACCAR Inc

(Exact name of registrant as specified in its charter)

 

Delaware	91-0351110
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
777 - 106th Ave. N.E., Bellevue, WA	98004
(Address of principal executive offices)	(Zip Code)

(425) 468-7400

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common stock, $1 par value	PCAR	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

 

Large accelerated filer	☒			Accelerated filer	☐
Non-accelerated filer	☐			Smaller reporting company	☐
				Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, $1 par value — 523,075,842 shares as of October 30, 2023

 

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PACCAR Inc – Form 10-Q

INDEX

 

			Page
PART I.		FINANCIAL INFORMATION:
ITEM 1.		FINANCIAL STATEMENTS:
		Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)	3
		Consolidated Balance Sheets – September 30, 2023 (Unaudited) and December 31, 2022	4
		Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2023 and 2022 (Unaudited)	6
		Consolidated Statements of Stockholders’ Equity – Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)	7
		Notes to Consolidated Financial Statements (Unaudited)	8
ITEM 2.		MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	33
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	50
ITEM 4.		CONTROLS AND PROCEDURES	50
PART II.		OTHER INFORMATION:
ITEM 1.		LEGAL PROCEEDINGS	51
ITEM 1A.		RISK FACTORS	51
ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES	51
ITEM 3.		DEFAULTS UPON SENIOR SECURITIES	51
ITEM 4.		MINE SAFETY DISCLOSURES	51
ITEM 5.		OTHER INFORMATION	51
ITEM 6.		EXHIBITS	52
INDEX TO EXHIBITS			52
SIGNATURE			55

 

 

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Consolidated Statements of Comprehensive Income (Unaudited)

(Millions, Except Per Share Amounts)

 

		Three Months Ended								Nine Months Ended
		September 30								September 30
		2023				2022				2023				2022
TRUCK, PARTS AND OTHER:
Net sales and revenues		$	8,232.3			$	6,687.0			$	24,723.7			$	19,579.6
Cost of sales and revenues			6,626.7				5,689.3				19,971.5				16,785.8
Research and development			103.5				82.9				302.0				241.3
Selling, general and administrative			143.6				137.7				448.3				430.6
Interest and other (income) expense, net			(16.3	)			(35.0	)			544.8				(89.4	)
			6,857.5				5,874.9				21,266.6				17,368.3
Truck, Parts and Other Income Before Income Taxes			1,374.8				812.1				3,457.1				2,211.3
FINANCIAL SERVICES:
Interest and fees			269.8				160.4				716.5				443.6
Operating lease, rental and other revenues			194.3				211.5				610.6				667.0
Revenues			464.1				371.9				1,327.1				1,110.6
Interest and other borrowing expenses			138.5				55.8				347.8				142.0
Depreciation and other expenses			146.9				137.4				427.0				426.3
Selling, general and administrative			38.7				33.3				110.9				100.9
Provision for losses on receivables			6.2				(.8	)			14.1				3.8
			330.3				225.7				899.8				673.0
Financial Services Income Before Income Taxes			133.8				146.2				427.3				437.6
Investment income			80.8				21.4				192.5				24.3
Total Income Before Income Taxes			1,589.4				979.7				4,076.9				2,673.2
Income taxes			360.9				210.3				893.4				582.9
Net Income		$	1,228.5			$	769.4			$	3,183.5			$	2,090.3
Net Income Per Share
Basic		$	2.35			$	1.47			$	6.08			$	4.00
Diluted		$	2.34			$	1.47			$	6.07			$	3.99
Weighted Average Number of Common Shares Outstanding
Basic			524.1				522.7				523.8				522.5
Diluted			525.3				523.3				524.8				523.3
Comprehensive Income		$	1,068.7			$	488.0			$	3,199.3			$	1,618.3

 

See Notes to Consolidated Financial Statements.

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Consolidated Balance Sheets (Millions)

 

		September 30				December 31
		2023				2022 *
		(Unaudited)
ASSETS
TRUCK, PARTS AND OTHER:
Current Assets
Cash and cash equivalents		$	5,696.9			$	4,544.7
Trade and other receivables, net (allowance for losses: 2023 - $.8, 2022 - $.6)			2,303.6				1,919.8
Marketable securities			1,743.1				1,614.2
Inventories, net			2,622.4				2,198.8
Other current assets			710.5				682.0
Total Truck, Parts and Other Current Assets			13,076.5				10,959.5
Equipment on operating leases, net			146.7				190.8
Property, plant and equipment, net			3,613.7				3,468.4
Other noncurrent assets, net			1,642.3				1,477.2
Total Truck, Parts and Other Assets			18,479.2				16,095.9
FINANCIAL SERVICES:
Cash and cash equivalents			209.4				146.2
Finance and other receivables, net (allowance for losses: 2023 - $124.8, 2022 - $121.1)			16,260.4				13,791.9
Equipment on operating leases, net			2,189.4				2,612.5
Other assets			901.1				629.0
Total Financial Services Assets			19,560.3				17,179.6
		$	38,039.5			$	33,275.5

 

* The December 31, 2022 consolidated balance sheet has been derived from audited financial statements.

 

See Notes to Consolidated Financial Statements.

 

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Consolidated Balance Sheets (Millions)

 

		September 30				December 31
		2023				2022 *
		(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
TRUCK, PARTS AND OTHER:
Current Liabilities
Accounts payable, accrued expenses and other		$	5,237.9			$	4,511.7
Dividend payable							974.6
Total Truck, Parts and Other Current Liabilities			5,237.9				5,486.3
Residual value guarantees and deferred revenues			162.4				209.2
Other liabilities			1,971.0				1,490.1
Total Truck, Parts and Other Liabilities			7,371.3				7,185.6
FINANCIAL SERVICES:
Accounts payable, accrued expenses and other			1,074.1				826.8
Commercial paper and bank loans			5,019.2				3,604.9
Term notes			7,906.4				7,866.7
Deferred taxes and other liabilities			645.4				624.4
Total Financial Services Liabilities			14,645.1				12,922.8
STOCKHOLDERS' EQUITY:
Preferred stock, no par value - authorized 1.0 million shares, none issued
Common stock, $1 par value - authorized 1.2 billion shares,    issued 523.1 and 522.0 million shares			523.1				522.0
Additional paid-in capital			258.3				196.1
Treasury stock, at cost - .04 million and nil shares			(3.1	)
Retained earnings			16,182.4				13,402.4
Accumulated other comprehensive loss			(937.6	)			(953.4	)
Total Stockholders' Equity			16,023.1				13,167.1
		$	38,039.5			$	33,275.5

 

* The December 31, 2022 consolidated balance sheet has been derived from audited financial statements.

See Notes to Consolidated Financial Statements.

 

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Condensed Consolidated Statements of Cash Flows (Unaudited)

(Millions)

 

		Nine Months Ended
		September 30
		2023				2022
OPERATING ACTIVITIES:
Net Income		$	3,183.5			$	2,090.3
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization:
Property, plant and equipment			308.2				239.7
Equipment on operating leases and other			370.2				345.9
Provision for losses on financial services receivables			14.1				3.8
Other, net			(115.1	)			(187.2	)
Pension contributions			(17.1	)			(34.3	)
Change in operating assets and liabilities:
Trade and other receivables			(518.1	)			(561.5	)
Wholesale receivables on new trucks			(1,006.8	)			(577.8	)
Inventories			(450.0	)			(523.5	)
Accounts payable and accrued expenses			882.1				937.0
Income taxes, warranty and other			352.3				45.8
Net Cash Provided by Operating Activities			3,003.3				1,778.2
INVESTING ACTIVITIES:
Originations of retail loans and finance leases			(4,557.4	)			(3,559.5	)
Collections on retail loans and finance leases			3,210.6				2,932.3
Net increase in wholesale receivables on used equipment			(15.2	)			(15.2	)
Purchases of marketable debt securities			(796.7	)			(723.8	)
Proceeds from sales and maturities of marketable debt securities			660.2				591.5
Payments for property, plant and equipment			(497.2	)			(393.7	)
Acquisitions of equipment for operating leases			(401.9	)			(688.1	)
Proceeds from asset disposals			449.0				511.3
Other, net			17.5				26.7
Net Cash Used in Investing Activities			(1,931.1	)			(1,318.5	)
FINANCING ACTIVITIES:
Payments of cash dividends			(1,377.3	)			(875.9	)
Purchases of treasury stock			(3.1	)			(2.0	)
Proceeds from stock compensation transactions			43.1				21.7
Net increase in commercial paper, short-term bank loans and other			1,316.9				227.3
Proceeds from term debt			2,398.2				2,302.7
Payments on term debt			(2,218.3	)			(2,092.7	)
Net Cash Provided by (Used in) Financing Activities			159.5				(418.9	)
Effect of exchange rate changes on cash and cash equivalents			(16.3	)			(145.6	)
Net Increase (Decrease) in Cash and Cash Equivalents