Good morning. We would like to welcome those listening by phone and those on the webcast. My name is Ken Hastings, PACCAR's Director of Investor Relations. Joining me this morning are Preston Feight, Chief Executive Officer, Harrie Schippers, President and Chief Financial Officer, and Michael Barkley, Senior Vice President and Controller. 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, including general economic and competitive conditions 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, good morning. Harrie Schippers, Michael Barkley, and I will update you on a record Q4 and full year 2022 results, as well as other business highlights. First, I appreciate our outstanding PACCAR employees. They consistently deliver the highest quality trucks and transportation solutions to our customers and excellent financial results for our shareholders. They're truly an impressive team. In 2022, PACCAR achieved record annual revenues of $28.8 billion and record net income of $3.01 billion. PACCAR's financial performance benefited from strong business growth across all of PACCAR's major truck markets and record results in our parts and financial services divisions. PACCAR has achieved 84 consecutive years of net income and has paid a dividend every year since 1941. In 2022, PACCAR declared dividends of $4.19 per share and announced a 50% stock dividend. PACCAR's Q4 revenues were a record $8.1 billion, and quarterly net income increased from the prior year by 78% to a record $921 million. PACCAR Parts achieved Q4 revenues of $1.47 billion and record pre-tax profits of $380 million, which was 23% increase compared to the same period last year. PACCAR delivered 51,600 trucks during the Q4. This was 7,300 more than the Q3 and was a result of higher truck production and the completion of nearly all the vehicles that were awaiting components. The supply chain is improving, though there may be some supplier constraints throughout the year. In the Q1 of 2023, deliveries are forecast to be strong and in the range of 49,000-53,000. In 2022, U.S. and Canadian Class A truck retail sales were 283,500 units. PACCAR's market share increased to 29.8%. The U.S. economy is projected to expand modestly in 2023. In this truck sector, there's pent-up demand from the prior three years of industry under production, and customers need to replace aging fleets to benefit from the superior performance of the newer Kenworth and Peterbilt models. The 2023 U.S. and Canadian Class A truck market deliveries are forecast to be in a range of 270,000-310,000 vehicles. European above 16-tonne truck registrations were 298,000 last year, and DAF's market share increased to a record 17.3%, reflecting the success of the new generation of DAF trucks. In 2023, confidence in the European economy is growing. With pent-up demand for new trucks, we expect the above 16-tonne truck registrations to be in the range of 270,000-310,000. In 2022, the South American above 16-tonne truck market was 138,300. This year the South American market is expected to be in the range of 125,000-135,000 units. In Brazil, DAF achieved a record 6.9% share in the above 16-tonne market, up from 5.7% last year. DAF Brasil has grown steadily since we opened the factory 10 years ago and makes a healthy contribution to PACCAR's global success. Truck, parts, and other gross margins expanded to 15.9% in the Q4, reflecting strong global performance, higher truck deliveries, excellent parts business, and supply chain improvements. We estimate PACCAR's worldwide Q1 truck and parts gross margins. All participants are now muted. Press star six to unmute your line. PACCAR and its customers realize the financial benefits of the new range of heavy and medium duty Kenworth, Peterbilt, and DAF trucks. These new trucks are successful in the market due to their premium quality, excellent fuel efficiency, and low operating costs. Last year, PACCAR earned recognition in several areas. The new DAF XD distribution and vocational truck was named the 2023 International Truck of the Year. Kenworth and Peterbilt earned six manufacturing leadership awards from the National Association of Manufacturers. The reporting firm CDP again recognized PACCAR as an environmental leader with an elite A rating. This rating places PACCAR in the top 1.5% of over 18,000 reporting companies. PACCAR was recognized as a top place for women to work by the Women In Trucking organization for the fifth consecutive year. Demand is strong in all markets for PACCAR's industry-leading new trucks and transportation solutions. We look forward to 2023 being another excellent year. Harrie Schippers will now provide an update on PACCAR Parts, PACCAR Financial Services, and other business highlights. Harrie. Thank you, Preston. In 2022, PACCAR Parts set new records for annual revenues and profits. Annual revenues increased by 17% to $5.8 billion. Annual pretax profit increased by 30% to $1.45 billion. Annual gross margins expanded to 30.4% from 28.6% in the prior year. PACCAR Parts is a high margin and high growth business. PACCAR Parts expanded its global distribution network in 2022 by opening a new parts distribution center in Louisville, Kentucky, and has 18 PDCs worldwide. We estimate parts sales to grow by 10% to 13% in the Q1 of this year compared to the same quarter last year, as high truck utilization contributes to strong global demand for parts. PACCAR Financial Services Q4 pretax income increased to a record $151 million, which is a 12% increase from last year. Annual pretax income increased 35% to a record $589 million. Portfolio assets increased to $17.2 billion. The portfolio continues to perform well with very low past dues and low credit losses. PACCAR Financial benefited from strong used truck prices in 2022. Last year, PACCAR Financial opened a new retail used truck center in Madrid, Spain, bringing the total to 13 used truck facilities worldwide. These retail used truck centers contribute to higher price realization compared to wholesale channels. In 2023, we expect used truck prices to moderate but remain historically strong. With its larger portfolio and superb credit quality, PACCAR Financial should have another very good year. In 2022, PACCAR invested $505 million in capital projects and $341 million in research and development. PACCAR's return on invested capital improved to an industry-leading 35.2%. In 2023, we're planning capital investments in the range of $525 million-$575 million, and R&D expenses will be in the range of $360 million-$410 million as we invest in key technology and innovation projects. These include next generation clean diesel and hydrogen combustion engines, battery and hydrogen electric powertrains, autonomous driving systems, connected vehicle services, advanced manufacturing, and enhanced distribution capabilities. PACCAR's independent Kenworth, Peterbilt, and DAF dealers continue to invest in their businesses to provide our customers the highest level of service in the industry. The conference is now in presentation mode. Your line is muted. A significant contribution to PACCAR's long-term success and supporting the growth of PACCAR Parts and PACCAR Financial Services. PACCAR had an outstanding year in 2022, and we're very positive about 2023. Thank you. We'd be pleased to answer your questions. At this time, if you would like to ask a question, please press star followed by the number one on your telephone keypad. To withdraw your question, please press star one again. Our first question comes from David Raso from Evercore ISI. Please go ahead. Your line is open. Hi. Thank you. My question relates to the gross margin for the Q1 and how do we think about the cadence from there. For the Q1, you have deliveries very similar to the Q4. The mix between truck revenues and parts revenues seems like it's pretty similar. For the stronger gross margin in the Q1 and the Q4, is that essentially that you're shipping less red tag trucks, so a little more overhead absorption and price cost gets better? I'm just trying to think about price cost moving forward after the Q1. Thank you. Yeah. Sure, David. Good to talk to you. The way we're looking at it is the offline units that have been limited by supplier constraints have been largely resolved, so it's fairly behind us right now. There were some of those that were taken care of in the Q4. When we think about deliveries in the Q1, that's basically production. There's good run rates. We would say that our margins are doing well on both the parts side and the truck side, and that's really a factor of all of the new trucks being in the market and pretty much fully released now in Europe and North America. The customers are getting the benefits of those trucks, as are we. I would add one more thing, which is the strong global performance of the team, whether that's in Australia or in South America, it's going well, and that's contributing. Taking that from the Q1 then, if your price and your backlog, I assume, isn't going to dissipate the next few quarters, I would like to think some costs maybe come down as the year progresses. If that's what you're able to do in the Q1 and price cost maybe gets a little better over the next couple of quarters, not worse, how should we think about the gross margins moving forward after the Q1? Well, you know well that we share information on we think the Q1 will be. In general, we think 2023 will be a good year. All right. Thank you very much. You bet, David. Our next question comes from Steven Fisher from UBS. Please go ahead. Your line is open. Thanks. Nice quarter. You know, with the better than expected deliveries, to what extent are you, backfilling that backlog, or are you perhaps sort of net just burning that backlog a bit faster than expected? I guess I'm curious how much visibility you have later in the year and how full your backlog is for, say, Q3 and Q4. You know, I mean, I think the macro way to think about it is that since 2020, the industry has really been not able to supply all the trucks that have been needed. There is a strong pent-up demand for the trucks. In addition to that, obviously, we've launched more new products than any time in our history, so that's contributing. We have excellent visibility looking into the year. We're full through the first half, filling the Q3 nicely. Demand continues to be strong in line with build, and so it's looking like a really good year. Okay. Just in terms of the cost and inflation side of things, I'm curious what you're seeing from your suppliers in terms of prices. Is there sort of a range that you're seeing where some of them are still raising prices, some are holding or falling? What are you seeing in terms of the net inflation and actions from your suppliers here? Yeah, I think you did a great job of characterizing it. You see some raising, some holding, some where there's commodity costs where there have been improvements, but it's a mixed bag. Obviously, labor is still a factor as far as our supplier for our suppliers, and all of those wash into the mix. Okay. Thank you. You bet. Our next question comes from Dillon Cumming from Morgan Stanley. Please go ahead. Your line is open. Great. Good morning, guys. Thanks for the question. Just wanted to ask a first one on the parts growth. You know, 10% to 13% in the Q1 is pretty admirable, just considering, you know, some of the rumblings we heard in the channel with regards to truck utilization maybe being a bit more challenged. But you've obviously been getting the benefit of the MX engine penetration. Can you just maybe pair off those two kind of headwinds and tailwinds going into the Q1? You know, how much of that growth is coming from MX engine penetration versus any headwind from, you know, truck utilization maybe moderating a bit? The 10% to 13% growth rate that we expect for the Q1 really reflects all of those things. We continue to see the PACCAR engine performing really well. That of course drives incremental parts sales. The parts team is doing an amazing job launching new programs, whether it's fleet sales, e-commerce, our MDI system continues to improve. It also means that we continue to grow our share in the parts business. We're enhancing our TRP business, adding stores, selling more parts with TRP. It's a mixture of all of those things that allow us to do really well in the Q1. Really well put. Gotcha. Thanks, Harrie and Michael. I guess that's the second one on the FinCo. You know, the margin performance in the quarter really strong considering the deceleration we've seen in used truck pricing more recently. Is that just reflective of, you know, PACCAR trucks commanding a premium in the market on a used basis? Or what would you kind of attribute that more recent strength to, considering the decline we've seen in used truck prices more recently? Yeah, we continue to see a 10% or 15% premium for Kenworth reputable used trucks in the marketplace. That's been around for a long time. That continues. We also see more and more benefits of the used truck centers that we have been developing and opening over the recent years. We now have 13 used truck centers worldwide. Allows us to sell more used trucks at retail prices instead of wholesale. All those things have contributed to the Finance Company. Like we said, the portfolio is in really good shape. Past dues are low, less than one-half of a percent. Yeah, customers continue to pay their bills, and the Finance Company continues to benefit from that. Got it. Sounds good. Thanks for the time. You're welcome. Our next question comes from Tami Zakaria from JPMorgan. Please go ahead. Your line is open. Hi. Good morning. Thank you so much. My first question is, how should we think about seasonality of builds and delivery in 2023? Is the Q1 delivery number a good run rate for the rest of the year? Well, Tami, it's good to talk to you. I think that what we see is we have had increasingly steady production, and that's why you're seeing this Q1 number be pretty high without any of the offline issues of last year that are behind us. It feels pretty steady there. I think there's opportunity for us in 2023 as we look forward. Got it. That's super helpful. My second question is, how should we think about your market share gain expectations this year? Should share capture continue at a clip similar to 2022, or do you see any reason or chances of that accelerating this year? Well, I think that our teams have done a fantastic job around the world of introducing new products over the last year and a half, on the truck side, and as Harrie mentioned, on the parts side and the financial services side. The totality of what benefit PACCAR is providing to our customers is very high. I think that that high benefit to them helps us grow our share. When our customers are successful and our dealers are successful, then we're successful, and that's how we think of it. Got it. Thank you so much. You bet. Our next question comes from Chad Dillard from Bernstein. Please go ahead. Your line is open. Chad Dillard, your line is open. Hi. Good morning, everyone. I was hoping you could talk about your industry view on like the first half versus second half, like production cadence, just given that there are a number of, you know, crosscurrents with the CARB pre-buy, as well as like the pendant demand. Just like how should we think about that production level? Well, I think that, again, I'll come back to the for our sector, we as an industry have not built enough trucks for the past few years. That combined with excellent new trucks that provide really good operating cost advantage to our customers is incentive for them to continue to buy trucks. I think that the pre-buy for 2024 is a non-issue. It's too limited in really only California. Customers end up benefiting in most cases when we bring in new products because we bring them features and content and advantages that help them run their operations better. I think that when we think about the year, it feels steady and strong throughout. That's helpful. Just over to your EV offering. Can you just talk about, you know, what the composition of production is, you know, for this year? You know, how has the passage of the Inflation Reduction Act just changed like the conversations that you're having with customers and ultimately, you know, how are you seeing that translate into, you know, your demand curve shift in production? Yeah. I'll take a couple of comments with it, and then Harrie or someone can add in. What we see is I think what we've shared before and is coming true is that we think that the EV market, the zero emissions vehicle market, will just gradually grow. Customers are experimenting with it now, trying to understand it. They're buying chargers, putting an infrastructure around it. PACCAR has 9 electric vehicle models in production. 9. So our teams have done a fantastic job of putting the products out there for customers to get used to and applications that fit all their needs. We think it'll grow. As we've shared previously, we think it'll be in the hundreds, and it'll stay in the hundreds for a little while. As regulations come in and experiences become more familiar, it'll grow and turn into the thousands and extend from there. I think that at the moment, it's in the hundreds, and we're well positioned for that growth. We have some fantastic vehicles out there that are providing great experiences. Anything to add, Harrie? No, I think that's spot on. Okay. Thank you. Our next question comes from Rob Wertheimer from Melius Research. Please go ahead. Your line is open. Thank you. Preston, you mentioned a couple times how the industry has been tight, obviously with COVID over the past couple of years, and customers haven't been able to get all the trucks they want. Are you able to split that in North America at all into sort of the straight truck, category versus, more fleet trucks? Presumably, the Infrastructure Act will drive demand for cement and dump and things like that. I don't know if that's happening already, if you're seeing any early orders or if that's more of a 24 effect. I don't know how the fleet age and tightness on that side of the market compares with the, more, freight market. Yeah, Rob, it's an interesting way to think about it. I think what we've seen is generally strength in both sides, truck and tractor. Obviously, there's local market impacts there, but the total general statement would be strong demand for trucks and strong demand for tractors. I would add, if anything, that in industry truck segment, PACCAR has a market share of more than 40%. Any growth, accelerated growth in that area, Kenworth and Peterbilt will definitely benefit from that. Okay, great. Thank you. Then you touched on supplier, you know, supplier component inflation or whatever to you, earlier. There's a lot of debate or speculation as to whether the logistics costs are falling or will fall materially. Do you have any sense of the current trend for PACCAR and how that looks in the early 2023? I'll stop there. Thank you. You know, I think the logistics costs have been varied. Obviously, over last year, they increased. Now I think what we're talking about is there's high input costs there, but it's moderating now, and I don't think we're especially concerned about it for 2023. Got it. Our next question comes from Jamie Cook from Credit Suisse. Please go ahead. Your line is open. Hi. Good morning. Nice quarter. I guess just two questions. One, I was impressed with the incremental margins you guys put up this quarter. I think 35.5%. I don't think I've ever seen you put up incremental margins that high. Can you talk about how we should think about normalized incremental margins going forward just with, you know, some of the new product introductions that are, you know, seem, you know, more favorable to mix versus some things that might be more, you know, one-time in nature? My second question is just to follow up on, I know you said the order book is 30 a backlog through the Q2, but starting to build for the Q3. Is that across the board in North America or Europe? If you could just distinguish between the two. Thank you. Sure. I would, when we think about it, the entire part of team at PACCAR is doing a good job. Our margin performance is based upon providing great trucks that are providing value to our customers. They're realizing those benefits. They've had time with those trucks now. That is effective for them and then consequently effective for PACCAR on the truck side. As Harrie did a really nice job of outlining the parts business growth has been strong and continues to be strong, and we predict it will continue to be strong. That's helpful to our margins. I also say that to kind of tie in your second question is we see strength globally for PACCAR, right? Europe is doing very well for us. The new trucks there, the XD, XF, XG product lines are the only trucks in the industry in Europe that are taking advantage of the masses and dimensions regulations, which allow a different shape. That gives us a distinct advantage in Europe. The European market for PACCAR is strong, as is understood by our 17.3% record market share we enjoyed there. I would say that Brazil, Australia, North America, all are doing well. There's not a single market or a single sector right now. We've just got a great team of people that have done a good job of giving our customers what they want, and those products are working really well. Okay. Thank you. Nice job. Thank you. Our next question comes from Nicole DeBlase from Deutsche Bank. Please go ahead. Your line is open. Yeah, thanks, guys. Maybe just starting with a question on parts. Margins there continue to surprise to the upside, look really strong. I guess, how do you think about the ability for that business to continue expanding margins into 2023 and beyond? Well, Harrie offered some commentary on Q1 growth and said it's very positive. One of the things that we should highlight in addition to some of the ongoing initiatives is our continued integration of PACCAR Parts with our customers and our dealers. I think it's a really important growing part of our business as it adds to recurring revenue strength for the future. For us, the future looks very bright for the Parts team as they bring data and capabilities into the truck, into the dealerships, and into the customers, so there's a higher degree of connectivity there, and that'll all be helpful to us. Got it. Thank you. Maybe just a shorter-term question. In the outlook for 1Q deliveries of 49,000-53,000, any distinguishing features among the regions, like what you're expecting sequentially for Europe versus North America versus Rest of World? Thank you. If you look at the range for the Q1, we expect build rates to improve basically in all the geographies we're in. Australia, Brazil, Europe, North America, we're gonna be building more trucks in all of those areas. It's gonna be across the board. Thanks. I'll pass it on. Our next question comes from Matt Elkott from Cowen. Please go ahead. Your line is open. Good morning, and good afternoon. Last year we saw some big monthly spikes in Class eight orders as you guys and other OEMs opened more of the order books, like in September. Would you say order logs are open for much of 2023, and that should mean a, you know, less erratic order numbers month to month going forward? You know, I think that following orders on a month-to-month basis is a risky thing to do and to try to get any guidance out of that because sometimes it's fleet buying season, sometimes there's different OEMs will handle it differently. For us, we're taking orders in the second half. They're coming in nicely, and it seems like it'll fill in 2023 well. Got it. Just one more question, Preston. On the any update on the natural gas engine you announced back in August with Cummins? Anything to report on that? I think nothing else other than to say that, you know, we continue to be the leader in the natural gas offerings in North America, and our partnership with Cummins is fantastic. They're doing a really good job, and I think that the ongoing development of natural gas engines is something that will serve a portion of the market. You know, you can get lower emissions in that. That's a part of the total portfolio of PACCAR to give our customers what they need. Great. Thank you very much. Our next question comes from Jeff Kauffman from Vertical Research Partners. Please go ahead. Your line is open. Thank you very much. I'll echo Jamie's comments. Terrific quarter. Two questions. First one focusing on PACCAR Financial. I was just kinda curious, just a big jump in assets, almost 8% sequentially after assets had kind of been flattish for the previous Q4 to Q6. I was just wondering kinda what PACCAR Financial's percentage of PACCAR aggregate unit sales are if there was a jump in that that accounted for that differential or what would have driven the assets and PFS up so much sequentially? The assets of PACCAR Financial Services increased. Yeah, yeah ... from a nice increase in deal of flooring towards the end of the year. Our share is around 26%. 26% of the trucks that Kenworth, Peterbilt, and DAF have sold were financed by PACCAR Financial Services. That's about the same as it was a year ago. I think the big increase that we see in the asset growth in PACCAR Financial is the higher prices for trucks. The trucks have sold at a higher price, and that creates more assets for the finance company. That's also one of the reasons that we expect the finance company to continue to perform well as we go into 2023. Okay. Thanks, Harrie. Just real quick, I was at CES and I saw something I didn't expect, which was a fuel cell truck that you were starting to market. I know that's not gonna be big numbers anytime soon, can you talk a little bit about that? Sure. When we think about the technologies that'll bring us to the future, we think clean diesel will be the dominant path forward for the next several years. We're all trying to understand whether it'll be driven by battery electric, hydrogen combustion, or hydrogen fuel cell as the capabilities for zero emissions products. PACCAR has made prudent investments into each of those technologies so that we understand them, so that if one brings a distinct advantage to our customers, we're ready to offer it to them. As you noted, we had that both trucks. We had a battery electric and a hydrogen fuel cell at CES because we're working on both of them. We'll put in the market what makes sense financially. The fuel cell truck, I'm assuming that's a Toyota engine with the partnership, but is that a commercial-grade engine or is that more passenger cells that you're using? You know, I think what we're doing is developing a product that's specific for the truck market. We're doing that in close collaboration with them. Okay. Thank you. You bet. Our next question comes from Scott Group from Wolfe Research. Please go ahead. Your line is open. Hey, thanks. If you guys hold this 16%, 17% gross margin for the year, it'll be your best gross margin ever. I guess how should we think about the new range of gross margins through a cycle? Meaning, if in the last decade it's been 12% to 15% give or take is the right range, what do you think the new range is for gross margin through a cycle? You know, all I think of it is PACCAR has an incredibly capable team of people around the world, and they're doing a fantastic job of giving our customers the trucks and transportation solutions they need. This is a really strong company. It's a growing company in all elements of the business, so we look forward to the future pretty well. The margins will be good, we think, but they'll obviously be what the market is. Okay. I know there's some mix changes with wholesale versus retail on used. Is there any kind of sensitivity you can give us on used prices and the FinCo margins, earnings? Any help you can help us with? Yeah. Used truck prices have come down a little bit from the historical highs earlier last year. I would say that even at today's valuations, used trucks are a very, very attractive business for the Finance Company. Selling used trucks and making profits while we do so. Do you think FinCo is a business that can grow earnings this year? Well, we don't guide that specifically on the FinCo earnings for the year, I would say that 2023 will be another excellent year for the finance company. Okay. Thank you, guys. Our next question comes from Miguel Borrega from BNP Paribas Exane. Please go ahead. Your line is open. Hi. Hello, everyone. A couple of questions from me. The first one, just on your market guidance for Europe and North America. Just wanted to understand why would you not expect more growth from both markets? You know, assuming supply chains keep easing. What could be kind of the headwinds on production for 2022? Why are you less positive on the European market versus North America, given that, you know, your exit rates are much stronger in Europe versus the U.S.? Thank you. Well, I think we're positive on the European market. I think we're positive on the North American market, and I think that we feel good about the year. I think that our production rates are increasing. Obviously we see that in the Q4, Q1 production plans. Though there could still be uncertainties in their supply base, and that could have an impact, but right now it looks pretty good. Yeah. I would like to emphasize too that the supply base has been improving, but we still see uncertainties in the supply base. That's why we have the ranges that we have for the Q1 and for the markets for North America and Europe for the entire year. Great. My second question, just on shareholder returns. This is obviously a record net cash position. Can you give us a sense on how much cash you need to run the business, and how are you thinking about capital allocation going forward? Thank you very much. Well, we have a very good history of how we allocate capital. We return excellent returns to our shareholders. As we noted, you know, a 17% return last year. We pay dividends every year. That goes well for our shareholders. We use money in a smart way to make future investments in a way that's also good for our shareholders. Anything you would add, Harrie? Oh, it's nice to see that the cash balance increased to more than $6 billion at the end of December. That's really a nice milestone that we achieved. Bear in mind, we paid a nice year-end dividend, almost $1 billion that we paid in January. We used the cash to make the investments that Preston mentioned, but also to make a nice return for our shareholders. Next question comes from Michael Feniger from Bank of America. Please go ahead. Your line is open. Yes. Thanks, everyone. Just two questions, one on a longer term and in the shorter term. Just first off, is there anything you think the industry, the OEMs learned in 2022 that is more sticky and structural in terms of managing orders, production, pricing strategies, even as production bottlenecks ease and normalize? Is there anything that sticks out to you that could be kind of a more structural thing going forward, maybe pricing discipline with some of these more public players? Love to get any comment on that. You know, I think in answer to that, I think our teams do a fantastic job of working closely with our customers, to understand what their needs are and making sure we meet their needs as quickly as possible. I think the teams, especially in 2022, did a great job of our production teams, our purchasing teams, our materials teams, and our suppliers together of producing as many trucks as we could for the customers with that strong demand. I think that PACCAR has a long history of trying to work well in all market conditions, and I think we'll continue with that. Understood. Just for a more shorter-term question, some market participants point to, you know, a rollover in freight spot rates and contract rates. I'd love to know how you view that. Is that just a smaller portion of the customer base that doesn't really accurately reflect maybe the strength of the freight market or pent-up demand? Just curious how you, on your seat, how you view that distinction. I think we try to take a broad look at it and think that, you know, freight tonnage is up over 3%, 3.7% for the year in 2022, that's a good indicator of what's really going on out there. As I've shared and we've talked a lot about, I think older trucks are more expensive to operate. With our introduction of new trucks, coupled with strong, ton miles being driven, that's good for PACCAR and bodes well for a strong year. Thank you. Our next question comes from Jerry Revich from Goldman Sachs. Please go ahead, your line is open. Yes, hi, and good afternoon, everyone. I just want to go back to the really strong margin performance and the outlook. You know, when we look back, you know, when you were posting, you know, anywhere close to this level of margins, your parts margins is up significantly from that time frame. You know, OEM margins are a touch lower than where they were in 2006. I'm wondering, Preston, just earlier in the conversation, you mentioned the improved fuel economy and other features. Are we at a point where we can expect new truck margins to also be up versus the last cycle as well, as we think about what that looks like over the next couple of quarters? What I think I'd point you towards is the good performance of the trucks. Kenworth, Peterbilt, and DAF have brought out trucks that are really performing well. I mean, they're winning awards, they're the most fuel-efficient trucks in the industry, they're the most desired trucks in the industry, and that bodes well for our truck margins. Okay. Then you spoke about a new approach to the telematics part of the business. Can you just talk about the revenue opportunity for PACCAR? You know, if you can charge $20 per month per truck on your field population, that would suggest a pretty healthy subscription opportunity. I'm wondering what could the economics look like to you folks based on the partnership structure, and, how do you think about the cadence of the product rollout? We think that there's a growing business in connected vehicles, and it's growing because we have our vehicles connected. There's a lot of interesting and useful data to our customers on the vehicles that we have. We've offered our PACCAR Connect system, and that PACCAR Connect system is now going to be intertwined with Platform Science operating system and application store. With the combination of those, it gives us an opportunity for further growth. That's one thing. I'd also say that our parts team is working closely with the data that comes from the truck. Our financial services team works closely with the data that comes from the truck, all to the benefit of our customers and our dealers, and we think that will be a growing opportunity in recurring revenue. Can you just talk about your expected economics? What do you expect to charge for the enhanced features? You know, so for some comparable systems that are available aftermarket, they do go as high as $20 per month. Is that feasible for your offering? Yeah, I think it's going to vary depending on the customer and the suite of technologies that they take. All right. Thanks. You bet. As a reminder to ask a question, please press star followed by the number one. Our last question will come from David Raso from Evercore ISI. Please go ahead, your line is open. Hi. I'm going to try to squeeze in two quickly. A little longer term and one short term. Sorry. Longer term, the idea of a pre-buy mid-decade. I am curious, if you think about your builds for the industry yourselves in 2024 being influenced by an assumed recovery in 2025 and 2026, you know, the pre-buy before the 2027 models are out in sort of spring of 2026. Just theoretically, should that provide a higher floor to 2024 builds? Because we've seen in the past, obviously, some of these pre-buys get well ahead of supply. Is that being too cute thinking about 2024 builds, whatever macro view someone may have, that they can be influenced by a, you know, somewhat assured some sense of a pre-buy in 2025 and 2026? I'll be quick on the near-term question, but if you can answer that first. Yeah, David, I'm going to let you work that. That's not how we are looking at it. We just think about the products we're offering, the benefit to the customers, and making sure that we're the leader in the market with those products. How the market shakes up from a pre-buy perspective. Are there conversations with customers yet, though, about- Oh, yeah, of course we do. That's okay. The market will be in 2024 and 2025, I think is beyond this call. Okay. Real quick on the near term. The gap between used and new prices on tractor-sleepers is getting obviously a lot wider than it was six months ago. How does that usually manifest itself? Is that more about, you know, maybe residual values getting marked down a little bit on leases? Like, how does that usually begin to flow into your business model when you see the gap between your used tractors and the new prices widening the way it's been the last few months? David, I would say that both on tractors and sleepers, Paccar Financial does really well selling those trucks at premium pricing. It's part of the success of the company that we build trucks that get a premium, whether it's in a new truck market or in a used truck market. Benefits the finance company, and it benefits the truck divisions as well. All right. Thank you very much for the time. Yeah, you bet. There are no other questions in queue at this time. Are there any additional remarks from the company? We'd like to thank everyone for joining the call, and thank you, operator. Ladies and gentlemen, this concludes PACCAR's earnings call. Thank you for participating. You may now disconnect.