PACCAR INC
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
PCAR$101.98-2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0000950170-24-052081
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0000950170-24-088553
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 165 current paragraphs.
41 unchanged; 78 reworded; 29 added; 7 removed; 0 previous and 17 current paragraphs rearranged.
Tables are not compared: 18 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
Second Quarter Financial Highlights:
Current report
Worldwide net sales and revenues were $8.77 billion in 2024 compared to $8.88 billion in 2023, primarily due to lower truck revenues, partially offset by higher parts and financial services revenues.
Current report
Parts sales were $1.66 billion in 2024 compared to $1.60 billion in 2023, primarily due to higher sales in all markets.
Current report
Net income was $1.12 billion ($2.13 per diluted share) in 2024 compared to $1.22 billion ($2.33 per diluted share) in 2023.
Current report
Capital investments were $219.6 million in 2024 compared to $179.1 million in 2023.
Current report
First Six Months Financial Highlights:
Current report
Truck revenues were $13.12 billion in 2024, comparable to $13.24 billion in 2023.
Current report
Parts sales were $3.34 billion in 2024 compared to $3.22 billion in 2023, primarily due to higher sales in all markets.
Current report
Financial Services revenues were $1.02 billion in 2024 compared to $863.0 million in 2023, primarily due to higher interest income driven by portfolio growth and higher portfolio yields.
Current report
Capital investments were $383.9 million in 2024 compared to $312.0 million in 2023.
Current report
Average truck sales prices were comparable and increased $45.9 million.
Current report
Average truck costs were comparable and increased $48.6 million, primarily reflecting higher raw material and labor costs, partially offset by lower warranty costs.
Current report
Factory overhead and other indirect costs increased $50.1 million, primarily due to higher labor costs partially offset by lower factory supplies and utilities costs.
Current report
Truck gross margin was 15.3% in the first six months of 2024 compared to 16.1% in the same period of 2023 due to the factors noted above.
Current report
As a percentage of sales, Truck SG&A was .9% for both second quarter and first six months of 2024, compared to .9% and 1.0% in the second quarter and first six months of 2023, respectively.
Current report
The Company’s worldwide parts net sales and revenues for the second quarter increased to $1.66 billion in 2024 from $1.60 billion in 2023. For the first six months, worldwide parts net sales and revenues increased to $3.34 billion in 2024 from $3.22 billion in 2023. The increase in both periods was primarily due to higher sales in all markets.
Current report
Average aftermarket parts sales prices increased sales by $44.4 million, primarily due to normal price realization in Europe, partially offset by competitive pressure in the U.S.
Current report
Warehouse and other indirect costs increased $2.8 million, primarily due to higher salaries and related expenses.
Current report
The currency translation effect on sales and cost of sales reflects a decline in the value of the euro relative to the U.S dollar.
Current report
Warehouse and other indirect costs increased $6.3 million, primarily due to higher salaries and related expenses.
Current report
The currency translation effect on sales and cost of sales primarily reflects a fluctuation in the value of the euro relative to the U.S. dollar.
Current report
Parts gross margins in the first six months of 2024 decreased to 31.4% from 31.9% in the first six months of 2023 due to the factors noted above.
Current report
As a percentage of sales, Parts SG&A was 3.8% and 3.7% in the second quarter and first six months of 2024, respectively, compared to 3.7% and 3.6% in the second quarter and first six months of 2023.
Current report
New loan and lease volume was $1.92 billion in the second quarter of 2024 compared to $1.93 billion in the second quarter of 2023, reflecting lower loan and lease volume in Europe, mostly offset by higher volume in all other markets. For the first half of 2024, new loan and lease volume was $3.44 billion compared to $3.34 billion in 2023, mainly due to higher equipment on operating lease volume from a higher amount financed per truck, primarily in the U.S.
Current report
In the second quarter of 2024, PFS revenues increased to $509.8 million from $439.8 million in 2023. In the first six months of 2024, PFS revenues increased to $1.02 billion from $863.0 million in 2023. The increase in both periods was primarily driven by portfolio growth, mainly in the U.S., and higher portfolio yields.
Current report
The currency translation effects reflect a decrease in the value of U.S. dollar to foreign currencies, primarily the Brazilian real.
Current report
Average debt balances increased $2.28 billion (excluding foreign exchange effects), increasing interest and other borrowing expenses by $52.6 million in the first six months of 2024, reflecting higher funding requirements for the portfolio from growth in loans, finance leases and dealer wholesale receivables.
Current report
Higher portfolio yields (7.3% in 2024 compared to 6.4% in 2023) increased interest and fees by $60.9 million. The higher portfolio yields were primarily due to higher market rates in all markets.
Current report
Financial Services SG&A for the second quarter of 2024 increased to $40.8 million from $37.0 million in the second quarter of 2023. For the first six months, Financial Services SG&A increased to $79.8 million in 2024 from $72.2 million in 2023. The increase in both periods was primarily due to higher salaries and related expenses, higher professional fees and strong foreign currency translation effects, primarily the Mexican peso.
Removed paragraphs (7)
Previous report
First Quarter Financial Highlights:
Previous report
Parts sales were $1.68 billion in 2024 compared to $1.62 billion in 2023, primarily due to higher sales in Europe and the U.S. and Canada.
Previous report
Capital investments were $164.3 million in 2024 compared to $132.9 million in 2023.
Previous report
The Company’s worldwide parts net sales and revenues increased to $1.68 billion in 2024 from $1.62 billion in 2023 reflecting higher sales in all major markets.
Previous report
Warehouse and other indirect costs increased $3.5 million primarily due to higher salaries and related expenses.
Previous report
New loan and lease unit volume was $1.52 billion in the first quarter of 2024 compared to $1.43 billion in the first quarter of 2023. The increase in new loan and finance lease volume reflected a higher amount financed per truck in all markets and higher retail sales of PACCAR trucks in North America and Brasil, partially offset by lower retail sales in Europe. The decrease in equipment on operating leases new business volume reflected lower market demand in Europe, partially offset by a higher amount financed per truck
Previous report
In the first quarter of 2024, PFS revenues increased to $509.3 million from $423.2 million in 2023. The increase was primarily due to higher interest income driven by higher portfolio yields. The effects of currency translation increased PFS revenues by $9.9 million for the first quarter of 2024, primarily due to a stronger Mexican peso and euro relative to the U.S. dollar.
Reworded paragraphs (78)
Previous wording
Truck revenues were $6.54 billion in 2024 compared to $6.41 billion in 2023, reflecting higher revenue in the U.S. and Canada.
Current wording
Truck revenues were $6.58 billion in 2024 compared to $6.83 billion in 2023, reflecting lower revenue in Europe.
Previous wording
Financial Services revenues were $509.3 million in 2024 compared to $423.2 million in 2023, primarily due to portfolio growth and higher portfolio yields.
Current wording
Financial Services revenues were $509.8 million in 2024 compared to $439.8 million in 2023, primarily due to higher interest income driven by portfolio growth and higher portfolio yields.
Previous wording
Research and development (R&D) expenses were $105.5 million in 2024 compared to $97.2 million in 2023.
Current wording
Research and development (R&D) expenses were $117.1 million in 2024 compared to $101.3 million in 2023.
Previous wording
Worldwide net sales and revenues were $8.74 billion in 2024 compared to $8.47 billion in 2023, due to higher truck, parts and financial services revenues.
Current wording
Worldwide net sales and revenues were $17.52 billion in 2024 compared to $17.35 billion in 2023, primarily due to higher parts and financial services revenues.
Previous wording
Net income was $1.20 billion ($2.27 per diluted share) in 2024 compared to $733.9 million ($1.40 per diluted share) in 2023. In 2023, adjusted net income (non-GAAP), excluding a $446.4 million after-tax non-recurring charge related to civil litigation in Europe was $1.18 billion ($2.25 per diluted share). See Reconciliation of GAAP to Non-GAAP Financial Measures on page 42.
Current wording
Net income was $2.32 billion ($4.40 per diluted share) in 2024 compared to $1.96 billion ($3.73 per diluted share) in 2023. In 2023, adjusted net income (non-GAAP), excluding a $446.4 million after-tax non-recurring charge related to civil litigation in Europe was $2.40 billion ($4.58 per diluted share). See Reconciliation of GAAP to Non-GAAP Financial Measures on page 49.
Previous wording
PACCAR is constructing a new, 240,000 square-foot PACCAR Parts Distribution Center (PDC) in Massbach, Germany, to be opened in 2024. The new PDC in Germany will enhance parts delivery to dealers and customers in Europe.
Current wording
PACCAR opened a new 80,000 square-foot PACCAR Parts Distribution Center (PDC) in Bogota, Colombia in the second quarter 2024 to enhance parts delivery in South America. PACCAR is constructing a new, 240,000 square-foot PDC in Massbach, Germany to be opened in 2024. The new PDC in Germany will enhance parts delivery to dealers and customers in Europe.
Previous wording
PACCAR’s advanced battery cell manufacturing joint venture is expected to begin construction of its 21-gigawatt hour (GWh) factory in Marshall County, Mississippi, in the second quarter of 2024, and start production in 2027. PACCAR anticipates investing $600-$900 million in the joint venture over the next several years.
Current wording
In the second quarter, PACCAR, Cummins, Daimler Truck and EVE Energy completed the formation of their U.S. battery manufacturing joint venture, Amplify Cell Technologies, and began construction of its 21-gigawatt hour (GWh) battery factory in Marshall County, Mississippi. The factory is expected to start production in 2027. PACCAR anticipates investing $600-$900 million in the joint venture over the next several years. During the three months ended June 30, 2024, PACCAR contributed $51.7 million to the joint venture.
Previous wording
The PACCAR Financial Services (PFS) group of companies has operations covering four continents and 26 countries. The global breadth of PFS and its rigorous credit application process support a portfolio of loans and leases with total assets of $21.15 billion. PFS issued $950.0 million in medium-term notes during the first three months of 2024 to support new business volume and repay maturing debt.
Current wording
The PACCAR Financial Services (PFS) group of companies has operations covering four continents and 26 countries. The global breadth of PFS and its rigorous credit application process support a portfolio of loans and leases with total assets of $21.33 billion.
Previous wording
Truck industry heavy-duty retail sales in the U.S. and Canada in 2024 are expected to be 250,000 to 290,000 units compared to 297,000 in 2023. In Europe, 2024 truck industry registrations for over 16-tonne vehicles are expected to be 260,000 to 300,000 units compared to 343,300 in 2023. In South America, heavy-duty truck industry registrations in 2024 are projected to be 105,000 to 115,000 as compared to 105,000 in 2023.
Current wording
Truck industry heavy-duty retail sales in the U.S. and Canada in 2024 are expected to be 240,000 to 280,000 units compared to 297,000 in 2023. In Europe, 2024 truck industry registrations for over 16-tonne vehicles are expected to be 260,000 to 300,000 units compared to 343,300 in 2023. In South America, heavy-duty truck industry registrations in 2024 are projected to be 105,000 to 115,000 as compared to 105,000 in 2023.
Previous wording
In 2024, PACCAR Parts sales are expected to increase 4-8% compared to 2023 reflecting stable demand.
Current wording
In 2024, PACCAR Parts sales are expected to increase 3-5% compared to 2023, reflecting stable demand.
Previous wording
In 2024, average earning assets are expected to increase 3-5% compared to 2023. If freight transportation conditions decline due to a weaker economy, then past due accounts, truck repossessions and credit losses would likely increase from the current levels and new business volume would likely decline.
Current wording
In 2024, average earning assets are expected to increase 5-8% compared to 2023. If freight transportation conditions decline due to a weaker economy, then past due accounts, truck repossessions and credit losses would likely increase from the current levels and new business volume would likely decline.
Previous wording
Capital investments in 2024 are expected to be $700 to $750 million and R&D is expected to be $460 to $500 million. The Company is increasing its investment in new powertrains, advanced manufacturing capabilities and capacity, and aftermarket distribution capabilities and capacity.
Current wording
Capital investments in 2024 are expected to be $725 to $775 million and R&D is expected to be $460 to $480 million. The Company is increasing its investment in new powertrains, advanced manufacturing capabilities and capacity, and aftermarket distribution capabilities and capacity.
Previous wording
The Company’s results of operations for the three months ended March 31, 2024 and 2023 are presented below.
Current wording
The Company’s results of operations for the three and six months ended June 30, 2024 and 2023 are presented below.
Previous wording
In 2023, Other includes a $600.0 million non-recurring charge related to civil litigation in Europe (EC-related claims).
Current wording
In 2023, Other includes a $600.0 million non-recurring charge related to civil litigation in Europe (EC-related claims) in the first quarter 2023.
Previous wording
The Company’s Truck segment accounted for 75% of revenues in the first quarter of 2024 compared to 76% in the first quarter of 2023.
Current wording
The Company’s Truck segment accounted for 75% of revenues in the second quarter and first six months of 2024, compared to 77% and 76% in the second quarter and first six months of 2023, respectively.
Previous wording
Worldwide new truck deliveries decreased in the first quarter of 2024 compared to the same period of 2023, primarily due to lower deliveries in Europe, mostly offset by higher deliveries in the U.S. and Canada.
Current wording
Worldwide new truck deliveries decreased in the second quarter and first six months of 2024 compared to the same period of 2023, primarily due to lower deliveries in Europe, partially offset by higher deliveries in the U.S. and Canada.
Previous wording
Market share data discussed below is provided by third-party sources and is measured by either retail sales or registrations for the Company’s dealer network as a percentage of total registrations or retail sales depending on the geographic market. In the U.S. and Canada, market share is based on retail sales. In Europe, market share is based primarily on registrations.
Current wording
Market share data discussed below is provided by third-party sources and is measured by either retail sales or registrations for the Company’s dealer network as a percentage of total retail sales or registrations depending on the geographic market. In the U.S. and Canada, market share is based on retail sales. In Europe, market share is based primarily on registrations.
Previous wording
In the first three months of 2024, industry retail sales in the heavy-duty market in the U.S. and Canada were 62,300 units compared to 72,000 units in the same period of 2023. The Company’s heavy-duty truck retail market share was 30.3% in the first three months of 2024 compared to 27.0% in the first three months of 2023. The medium-duty market was 25,200 units in the first three months of 2024 compared to 25,900 units in the same period of 2023. The Company’s medium-duty market share was 17.0% in the first three months of 2024 compared to 11.2% in the first three months of 2023.
Current wording
In the first six months of 2024, industry retail sales in the heavy-duty market in the U.S. and Canada were 127,600 units compared to 151,000 units in the same period of 2023. The Company’s heavy-duty truck retail market share was 31.5% in the first six months of 2024 compared to 27.7% in the first six months of 2023. The medium-duty market was 52,300 units in the first six months of 2024 compared to 52,400 units in the same period of 2023. The Company’s medium-duty market share was 17.3% in the first six months of 2024 compared to 12.8% in the first six months of 2023.
Previous wording
The over 16‑tonne truck market in Europe in the first three months of 2024 was 84,600 units compared to 90,100 units in the first three months of 2023. DAF over 16‑tonne market share was 13.4% in the first three months of 2024 compared to 16.1% in the same period of 2023. The 6 to 16‑tonne market in the first three months of 2024 was 12,100 units compared to 11,400 units in the same period of 2023. DAF market share in the 6 to 16-tonne market in the first three months of 2024 was 9.2% compared to 9.1% in the same period of 2023.
Current wording
The over 16‑tonne truck market in Europe in the first six months of 2024 was 174,800 units compared to 176,000 units in the first six months of 2023. DAF over 16‑tonne market share was 13.7% in the first six months of 2024 compared to 16.1% in the same period of 2023. The 6 to 16‑tonne market in the first six months of 2024 was 27,700 units compared to 23,300 units in the same period of 2023. DAF market share in the 6 to 16-tonne market in the first six months of 2024 was 8.4% compared to 9.1% in the same period of 2023.
Previous wording
The over 16-tonne truck market in Brasil in the first three months of 2024 was 21,000 units compared to 21,500 units in the same period of 2023. DAF Brasil market share for the first three months of 2024 was 10.7% compared to 8.6% in the same period in 2023.
Current wording
The over 16-tonne truck market in Brasil in the first six months of 2024 was 44,600 units compared to 39,100 units in the same period of 2023. DAF Brasil market share for the first six months of 2024 was 10.3% compared to 9.2% in the same period in 2023.
Previous wording
The Company’s worldwide truck net sales and revenues in the first quarter increased to $6.54 billion in 2024 from $6.41 billion in 2023 from improved price realization, primarily in the U.S. and Canada, partially offset by lower truck unit deliveries, primarily in Europe.
Current wording
The Company’s worldwide truck net sales and revenues in the second quarter decreased to $6.58 billion in 2024 from $6.83 billion in 2023, primarily due to lower truck unit deliveries in Europe. Revenues for the first six months were comparable to the same period in 2023, as lower truck unit deliveries in Europe were mostly offset by higher truck deliveries and average sales prices in the U.S. and Canada.
Previous wording
Truck segment income before taxes and pretax return on revenues was comparable to the same period in 2023, as lower truck unit deliveries in Europe were mostly offset by higher truck deliveries in the U.S. and Canada.
Current wording
In the second quarter and first six months of 2024, Truck segment income before taxes and pretax return on revenues decreased primarily due to lower truck unit deliveries in Europe, partially offset by higher truck unit deliveries in the U.S. and Canada.
Previous wording
Factory overhead and other indirect costs increased $19.7 million, primarily due to higher labor costs partially offset by lower utilities and premium freight.
Current wording
Factory overhead and other indirect costs increased $30.4 million, primarily due to higher labor costs partially offset by lower factory supplies and utilities costs.
Previous wording
Extended warranties, operating leases and other increased revenues by $25.8 million primarily due to higher volume of extended warranty and R&M contracts. The increase in extended warranty, operating leases and other cost of $39.0 million reflects higher costs from extended warranty, R&M contracts, and lower used truck results in Europe.
Current wording
Extended warranties, operating leases and other increased revenues by $16.4 million primarily due to higher volume of extended warranty and R&M contracts. The increase in extended warranty, operating leases and other cost of $28.5 million reflects higher costs from extended warranty, R&M contracts, and lower used truck results, primarily in Europe.
Previous wording
The currency translation effect on sales and cost of sales primarily reflects an increase in the value of the euro and Brazilian real and the Canadian dollar relative to the U.S. dollar, partially offset by a decrease in the value of Australian dollar relative to the U.S. dollar.
Current wording
The currency translation effect on sales and cost of sales primarily reflects a decline in the value of the Brazilian real, euro and Canadian dollar relative to the U.S. dollar.
Previous wording
Truck gross margin was 15.6% in the first quarter of 2024 compared to 16.2% in the same period of 2023 due to the factors noted above.
Current wording
Truck gross margin was 15.0% in the second quarter of 2024 compared to 16.0% in the same period of 2023 due to the factors noted above.
Previous wording
Truck sales volume decreased revenues by $100.5 million and costs by $102.7 million, primarily reflecting lower truck deliveries in Europe, mostly offset by higher truck deliveries in the U.S. and Canada.
Current wording
Truck sales volume decreased revenues by $372.6 million and costs by $314.6 million, primarily reflecting lower truck deliveries in Europe, partially offset by higher truck deliveries in the U.S. and Canada.
Previous wording
Average truck sales prices increased by $177.8 million from modest price realization, primarily in the U.S. and Canada, and the positive effect of new truck models.
Current wording
Average truck sales prices increased by $223.7 million from modest price realization, primarily in the U.S., Canada and Australia, and the positive effect of new truck models.
Previous wording
Average cost per truck increased by $175.1 million, primarily reflecting higher raw material and labor costs.
Current wording
Average truck costs increased by $223.7 million, primarily reflecting higher raw material and labor costs, partially offset by lower warranty costs.
Previous wording
The currency translation effect on sales and cost of sales primarily reflects an increase in the value of the euro and Brazilian real relative to the U.S. dollar, partially offset by a decrease in the value of Australian dollar relative to the U.S. dollar.
Current wording
The currency translation effect on sales and cost of sales primarily reflects a decline in the value of the Australian dollar, Canadian dollar and the Brazilian real relative to the U.S. dollar.
Previous wording
Truck selling, general and administrative (SG&A) expense decreased in the first quarter of 2024 to $61.7 million from $72.4 million in 2023. The decrease was primarily due to lower sales and marketing expenses and professional expenses, partially offset by higher salaries. As a percentage of sales, Truck SG&A was .9% in the first quarter of 2024 compared to 1.1% in the first quarter of 2023.
Current wording
Truck selling, general and administrative (SG&A) expense decreased in the second quarter of 2024 to $59.7 million from $62.7 million in 2023, and for the first six months of 2024, Truck SG&A decreased to $121.4 million from $135.1 million in 2023. The decrease in both periods was primarily due to lower sales and marketing and professional expenses, partially offset by higher salaries and related expenses.
Previous wording
The Company’s Parts segment accounted for 19% of revenues in the first quarter of 2024 and 2023.
Current wording
The Company’s Parts segment accounted for 19% of revenues in the second quarter and first six months of 2024, compared to 18% and 19% in the second quarter and first six months of 2023, respectively.
Previous wording
Average aftermarket parts direct costs increased $22.7 million due to higher material costs, primarily in the U.S. and Europe.
Current wording
Average aftermarket parts direct costs increased $53.4 million due to higher material costs, primarily in the U.S. and Europe.
Previous wording
Parts gross margins in the first quarter of 2024 increased to 32.5% from 32.2% in the first quarter of 2023 due to the factors noted above.
Current wording
Parts gross margins in the second quarter of 2024 decreased to 30.3% from 31.6% in the second quarter of 2023 due to the factors noted above.
Previous wording
Aftermarket parts sales volume increased by $3.0 million and related cost of sales increased by $1.6 million primarily reflecting higher sales volume in Mexico and Brasil, partially offset by lower sales volume in the U.S. and Canada.
Current wording
Aftermarket parts sales volume increased by $29.1 million and related cost of sales increased by $15.4 million, primarily reflecting higher sales volume in Mexico and Brasil, partially offset by lower sales volume in the U.S. and Canada.
Previous wording
Average aftermarket parts sales prices increased sales by $43.4 million primarily due to moderate price realization in Europe and the U.S.
Current wording
Average aftermarket parts sales prices increased sales by $87.8 million, primarily due to price realization in Europe and the U.S.
Previous wording
Parts SG&A expense increased in the first quarter of 2024 to $61.3 million from $58.1 million in 2023. The increase was primarily due to higher salaries and related expenses, partially offset by lower sales and marketing costs. As a percentage of sales, Parts SG&A was 3.7% and 3.6% in the first quarter of 2024 and 2023, respectively.
Current wording
Parts SG&A expense increased in the second quarter of 2024 to $62.6 million from $59.1 million in 2023, and for the first six months, Parts SG&A increased to $123.9 million in 2024 from $117.2 million in 2023. The increase in both periods was primarily due to higher salaries and related expenses, partially offset by lower sales and marketing costs.
Previous wording
The Company’s Financial Services segment accounted for 6% and 5% of revenues in the first quarter of 2024 and 2023, respectively.
Current wording
The Company’s Financial Services segment accounted for 6% of revenues in the second quarter and first six months of 2024, compared to 5% in the second quarter and first six months of 2023, respectively.
Previous wording
-35 - in all major markets. PFS finance market share of new PACCAR truck sales was 21.4% in the first quarter of 2024 compared to 22.0% in the first quarter of 2023.
Current wording
In the second quarter of 2024, PFS finance market share of new PACCAR truck sales was 24.2% compared to 24.4% in the second quarter of 2023. In the first six months of 2024, PFS finance market share of new PACCAR truck sales was 22.8% compared to 23.2% in the first six months of 2023.
Previous wording
PFS income before income taxes decreased to $113.9 million from $148.8 million in 2023. The decrease was primarily due to lower operating lease margins, reflecting lower results on returned lease assets, partially offset by higher finance margins. The effects of currency translation increased PFS income before income taxes by $3.7 million for the first quarter of 2024, primarily due to a stronger Mexican peso relative to the U.S. dollar.
Current wording
PFS income before income taxes decreased to $111.2 million in the second quarter of 2024 from $144.7 million in the second quarter of 2023. In the first six months of 2024, PFS income before income taxes decreased to $225.1 million from $293.5 million in 2023. The decrease in both periods was primarily due to lower operating lease margins, reflecting lower results on returned lease assets, partially offset by higher finance margins from a higher asset portfolio.
Showing the first 40 of 78 pairs. Open the source sections for the rest.
Rearranged current paragraphs (17)
Current report — wording carried from elsewhere
Research and development (R&D) expenses were $222.6 million in 2024 compared to $198.5 million in 2023.
Current report — wording carried from elsewhere
PFS issued $1.71 billion in medium-term notes during the first six months of 2024 to support new business volume and repay maturing debt.
Current report — wording carried from elsewhere
Truck sales volume decreased revenues by $272.1 million and costs by $211.9 million, primarily reflecting lower truck deliveries in Europe, partially offset by higher truck deliveries in the U.S., Canada, South America and Mexico.
Current report — wording carried from elsewhere
The major factors for the Truck segment changes in net sales and revenues, cost of sales and revenues and gross margin between the six months ended June 30, 2024 and 2023 are as follows:
Current report — wording carried from elsewhere
Extended warranties, operating leases and other increased revenues by $42.2 million primarily due to higher volume of extended warranty, dealer support services and R&M contracts. The increase in extended warranty, operating leases and other cost of $67.5 million reflects higher costs from dealer support services, extended warranty, R&M contracts, and lower used truck results in Europe.
Current report — wording carried from elsewhere
Aftermarket parts sales volume increased by $26.1 million and related cost of sales increased by $13.8 million primarily reflecting higher sales volume in Mexico and Brasil and Australia, partially offset by lower sales volume in the U.S. and Canada.
Current report — wording carried from elsewhere
The major factors for the changes in Parts segment net sales and revenues, cost of sales and revenues and gross margin between the six months ended June 30, 2024 and 2023 are as follows:
Current report — wording carried from elsewhere
Average aftermarket parts direct costs increased $76.1 million due to higher material costs, primarily in the U.S. and Europe.
Current report — wording carried from elsewhere
The Company recognized losses on used trucks, excluding repossessions, of $24.5 million in the first six months of 2024, compared to gains of $46.9 million in the first six months of 2023, including losses on multiple unit transactions of $18.0 million in the first six months of 2024 compared to $1.0 million in the first six months of 2023. Used truck losses related to repossessions, which are recognized as credit losses, were $6.0 million for the first six months of 2024 and $2.0 million first six months of 2023.
Current report — wording carried from elsewhere
The major factors for the changes in interest and fees, interest and other borrowing expenses and finance margin for the six months ended June 30, 2024 and 2023 are outlined below:
Current report — wording carried from elsewhere
Average finance receivables increased $3.05 billion (excluding foreign exchange effects), increasing interest and fees by $110.0 million in the first six months of 2024, primarily due to higher average loan, finance lease and dealer wholesale balances.
Current report — wording carried from elsewhere
Higher borrowing rates (4.7% in 2024 compared to 3.5% in 2023) increased interest and other borrowing expenses by $69.7 million and were primarily due to higher debt market rates in all markets.
Current report — wording carried from elsewhere
Revenue per asset increased $14.5 million primarily due to higher average truck values financed. Cost per asset increased $27.9 million due to higher depreciation and operating expenses primarily in Europe.
Current report — wording carried from elsewhere
The major factors for the changes in operating lease, rental and other revenues, depreciation and other expenses and lease margin between the six months ended June 30, 2024 and 2023 are outlined below:
Current report — wording carried from elsewhere
Higher sales volume, partially offset by lower market prices of used trucks on trade, increased revenues by $25.7 million and related depreciation and other expenses by $27.5 million.
Current report — wording carried from elsewhere
Results on returned lease assets increased depreciation and other expenses by $61.6 million, primarily due to losses on sale of returned lease units in 2024 (compared to gains in 2023) and impairment on existing used truck inventories in Europe as a result of lower used truck market values.
Current report — wording carried from elsewhere
Average operating lease assets decreased $428.8 million (excluding foreign exchange effects), which decreased revenues by $87.0 million and related depreciation and other expenses by $80.7 million.