Summary
PACCAR Inc. (PCAR) filed an 8-K report on March 24, 2016, disclosing a significant event related to an ongoing investigation by the European Commission (EC). The EC has been investigating major European commercial vehicle manufacturers, including PACCAR's subsidiary DAF Trucks, for alleged anticompetitive practices. The company expects to record a substantial charge of €850 million (approximately $945 million) in the first quarter of 2016 related to this proceeding. This charge is not tax deductible and is a result of the EC's preliminary view that the manufacturers engaged in illegal activities within the European Union.
Key Highlights
- 1PACCAR Inc. is reporting a charge of €850 million ($945 million) in Q1 2016.
- 2The charge is related to an ongoing investigation by the European Commission into anticompetitive practices.
- 3The investigation involves PACCAR's subsidiary, DAF Trucks N.V., and other major European commercial vehicle manufacturers.
- 4The European Commission has indicated its intent to impose significant fines.
- 5The charge is not tax deductible.
- 6DAF Trucks N.V. has sufficient liquidity to cover the amount of the charge.
- 7The company is continuing to evaluate the charge amount pending final resolution of the EC proceedings.
Frequently Asked Questions
PACCAR is recording a charge of €850 million ($945 million) in the first quarter of 2016 due to an ongoing investigation by the European Commission. The EC alleges anticompetitive practices by PACCAR's subsidiary, DAF Trucks N.V., and other European commercial vehicle manufacturers.
The European Commission commenced its investigation in January 2011. In November 2014, the EC issued a Statement of Objections to the manufacturers, outlining its preliminary view of anticompetitive practices and its intention to seek significant fines. PACCAR's subsidiary, DAF Trucks, is cooperating with the EC.
No, the filing states that DAF Trucks N.V. has sufficient liquidity to fund the payment related to this charge, indicating no immediate liquidity concerns for the subsidiary or the parent company as a result of this specific provision.
No, the company explicitly states in the filing that the charge is not tax deductible.