8-KOther Events

PACCAR INC 8-K Report, Corporate Update (Jul 19, 2016)

Filed July 19, 2016For Securities:PCAR

Summary

PACCAR Inc filed an 8-K report on July 19, 2016, to provide an update on a European Commission (EC) investigation into competition rules. Previously, in Q1 2016, the company had recorded a charge of €850 million ($942.6 million) related to this investigation. The EC has now concluded its investigation with a settlement with DAF, PACCAR's subsidiary, imposing a fine of €752.7 million ($833.0 million). As a result of this settlement, PACCAR will reverse €97.3 million ($109.6 million) of the previously recorded charge in the second quarter of 2016. DAF will pay the fine within three months, and it is not tax-deductible. The company confirmed that DAF has sufficient liquidity to cover the fine.

Key Highlights

  • 1European Commission (EC) concludes investigation into competition rules involving DAF Trucks N.V.
  • 2EC imposes a fine of €752.7 million ($833.0 million) on DAF.
  • 3PACCAR to reverse €97.3 million ($109.6 million) of the previously recorded €850 million charge in Q2 2016.
  • 4DAF will pay the fine within three months of notification from the EC.
  • 5The fine is not tax-deductible.
  • 6DAF has adequate liquidity to fund the fine payment.

Frequently Asked Questions

This 8-K filing provides an update on the resolution of an investigation by the European Commission (EC) concerning competition rules among European truck manufacturers. Specifically, it details a settlement reached with DAF Trucks N.V., a PACCAR subsidiary, and the resulting fine.

PACCAR had previously recorded a charge of €850 million ($942.6 million) in anticipation of potential penalties. With the settlement, a fine of €752.7 million ($833.0 million) was imposed. Consequently, PACCAR will reverse €97.3 million ($109.6 million) of the original charge in the second quarter of 2016, reducing the overall financial impact from the initial provision.

Yes, the filing explicitly states that DAF has sufficient liquidity to fund the payment of the €752.7 million ($833.0 million) fine. DAF is required to pay the fine within three months after notification from the EC.

No, the filing clarifies that the imposed fine is not tax-deductible.