Caterpillar Financial Services

Disruptions or volatility in global financial markets could adversely impact the industries and markets in which we serve and operate
Failure to maintain our credit ratings would increase our cost of borrowing and could adversely affect our cost of funds, liquidity, competitive position and access to capital markets
Changes in interest rates, foreign currency exchange rates or market liquidity conditions could adversely affect our earnings and/or cash flows
Our business is significantly influenced by the credit risk associated with our customers and an increase in delinquencies, repossessions or net losses could adversely affect our results
A decrease in the residual value of the equipment that we finance could adversely affect our results
Restrictive covenants in our debt agreements could limit our financial and operating flexibility
Changes in government monetary or fiscal policies may negatively impact our results
Our global operations are exposed to political and economic risks, commercial instability and global events beyond our control in the countries in which we operate
The success of our business depends upon the demand for Caterpillar’s products
Changes in the marketing, operational or administrative support that we receive from Caterpillar could adversely affect our results
The success of our business depends on our ability to develop, produce and market quality products and services that meet our customers’ needs
Increased information technology security threats and more sophisticated computer crime pose a risk to our systems, networks, products and services
Changes in accounting guidance could have an adverse effect on our results of operations

Management Discussion

Retail revenue for the second quarter of 2022 was $301 million, a decrease of $2 million from the same period in 2021. The decrease was due to a $9 million unfavorable impact from lower average earning assets, partially offset by a $7 million favorable impact from higher interest rates on retail finance receivables. For the quarter ended June 30, 2022, retail average earning assets were $22.44 billion, a decrease of $505 million from the same period in 2021. The annualized average yield was 5.37 percent for the second quarter of 2022, compared with 5.28 percent for the second quarter of 2021.
Operating lease revenue for the second quarter of 2022 was $224 million, a decrease of $14 million from the same period in 2021. The decrease was primarily due to a $17 million unfavorable impact from lower average earning assets, partially offset by a $3 million favorable impact from higher rental rates on operating leases.
Wholesale revenue for the second quarter of 2022 was $99 million, an increase of $17 million from the same period in 2021. The increase was primarily due to a $17 million favorable impact from higher interest rates on wholesale finance receivables. For the quarter ended June 30, 2022, wholesale average earning assets were $4.48 billion, an increase of $96 million from the same period in 2021. The annualized average yield was 8.88 percent for the second quarter of 2022, compared with 7.45 percent for the second quarter of 2021.