----

|                                         | Delaware                 | 37-1105865                    |   |
|----------------------------------------------|--------------------------|-------------------------------|--------|
|                                         | (State of incorporation) |  (IRS Employer I.D. No.) |   |
|  2120 West End Ave.Nashville, Tennessee | 37203-0001               |
| (Address of principal executive offices)     | (Zip Code)               |

----

----

|                                                                                      |   | Three Months Ended |   |   | Six Months Ended |   |
|-------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                                                      |   | June 30,           |   |   | June 30,         |   |
|                                                                                      |   | 2010               |   |   | 2009             |   |   | 2010 |   |   | 2009 |   |
| Revenues:                                                                                 |   |               |   |   |             |   |   |   |   |   |   |   |
| Retail finance                                                                            |   | $                  | 328    |   |             | $      | 365 |   |   | $ | 673 |   |   | $ | 737 |   |
| Operating lease                                                                           |   |               | 223    |   |             |   | 223 |   |   |   | 448 |   |   |   | 443 |   |
| Wholesale finance                                                                         |   |               | 46     |   |             |   | 68 |   |   |   | 86 |   |   |   | 140 |   |
| Other, net                                                                                |   |               | 51     |   |             |   | 44 |   |   |   | 72 |   |   |   | 61 |   |
| Total revenues                                                                            |   |               | 648    |   |             |   | 700 |   |   |   | 1,279 |   |   |   | 1,381 |   |
|                                                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                 |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Interest                                                                                  |   |               | 234    |   |             |   | 272 |   |   |   | 468 |   |   |   | 554 |   |
| Depreciation on equipment leased to others                                                |   |               | 173    |   |             |   | 174 |   |   |   | 349 |   |   |   | 347 |   |
| General, operating and administrative                                                     |   |               | 89     |   |             |   | 80 |   |   |   | 180 |   |   |   | 161 |   |
| Provision for credit losses                                                               |   |               | 47     |   |             |   | 43 |   |   |   | 95 |   |   |   | 81 |   |
| Other 1                                                                                   |   |               | 13     |   |             |   | 9 |   |   |   | 24 |   |   |   | 27 |   |
| Total expenses                                                                            |   |               | 556    |   |             |   | 578 |   |   |   | 1,116 |   |   |   | 1,170 |   |
|                                                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Other income (expense)                                            |   |               | 3      |   |             |   | - |   |   |   | 3 |   |   |   | (18 | ) |
|                                                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Profit before income taxes                                                                |   |               | 95     |   |             |   | 122 |   |   |   | 166 |   |   |   | 193 |   |
|                                                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Provision for income taxes                                        |   |               | 10     |   |             |   | 29 |   |   |   | 26 |   |   |   | 45 |   |
|                                                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Profit of consolidated companies                                                          |   |               | 85     |   |             |   | 93 |   |   |   | 140 |   |   |   | 148 |   |
|                                                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
|     Less:  Profit attributable to noncontrolling interests  |   |               | 3      |   |             |   | 4 |   |   |   | 5 |   |   |   | 8 |   |
|                                                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Profit 2                                                                                  |   | $                  | 82     |   |             | $      | 89 |   |   | $ | 135 |   |   | $ | 140 |   |
|                                                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| 1 Includes impairment losses on retained interests:                                       |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total other-than-temporary impairment losses                                              |   | $                  | -      |   |             | $      | 24 |   |   | $ | - |   |   | $ | 46 |   |
| Portion of losses recognized in Accumulated other comprehensive income(loss) before taxes |   |               | -      |   |             |   | (15 | ) |   |   | - |   |   |   | (15 | ) |
| Net impairment losses recognized in earnings                                              |   | $                  | -      |   |             | $      | 9 |   |   | $ | - |   |   | $ | 31 |   |
|                                                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| 2 Profit attributable to Caterpillar Financial Services Corporation.                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                      |   | June 30, |        |   | December 31, |   |
|-----------------------------------------------------------|--------|----------|-------------|--------|--------------|--------|
|                                                      |   | 2010     |        |   | 2009         |   |
| Assets:                                                   |   |     |        |   |         |   |
| Cash and cash equivalents                                 |   | $        | 1,643       |   |         | $      | 2,536 |   |
| Finance receivables                                       |   |     |        |   |         |   |   |   |
| Retail notes receivable                                   |   |     | 8,515       |   |         |   | 8,499 |   |
| Wholesale notes receivable                                |   |     | 2,052       |   |         |   | 1,559 |   |
| Finance leases and installment sale contracts - Retail    |   |     | 12,864      |   |         |   | 13,895 |   |
| Finance leases and installment sale contracts - Wholesale |   |     | 466         |   |         |   | 506 |   |
|                                                      |   |     | 23,897      |   |         |   | 24,459 |   |
| Less: Unearned income                                     |   |     | (1,390      | )      |         |   | (1,493 | ) |
| Less: Allowance for credit losses                         |   |     | (383        | )      |         |   | (377 | ) |
| Total net finance receivables                             |   |     | 22,124      |   |         |   | 22,589 |   |
|                                                      |   |     |        |   |         |   |   |   |
| Notes receivable from Caterpillar                         |   |     | 897         |   |         |   | 1,094 |   |
| Equipment on operating leases,                            |   |     |        |   |         |   |   |   |
| less accumulated depreciation                             |   |     | 2,655       |   |         |   | 2,987 |   |
| Deferred and refundable income taxes                      |   |     | 125         |   |         |   | 123 |   |
| Other assets                                              |   |     |  1,332 |   |         |   |  1,319 |   |
| Total assets                                              |   | $        | 28,776      |   |         | $      | 30,648 |   |
|                                                      |   |     |        |   |         |   |   |   |
| Liabilities and stockholder’s equity:               |   |     |        |   |         |   |   |   |
| Payable to dealers and others                             |   | $        |  142   |   |         | $      |  160 |   |
| Payable to Caterpillar - other                            |   |     | 35          |   |         |   | 43 |   |
| Accrued expenses                                          |   |     | 276         |   |         |   | 404 |   |
| Income taxes payable                                      |   |     | 58          |   |         |   | 103 |   |
| Payable to Caterpillar - borrowings                       |   |     | 600         |   |         |   | 26 |   |
| Short-term borrowings                                     |   |     | 3,430       |   |         |   | 3,721 |   |
| Current maturities of long-term debt                      |   |     | 4,846       |   |         |   | 5,399 |   |
| Long-term debt                                            |   |     | 15,398      |   |         |   | 16,124 |   |
| Deferred income taxes and other liabilities               |   |     |  665   |   |         |   |  525 |   |
| Total liabilities                                         |   |     | 25,450      |   |         |   | 26,505 |   |
|                                                      |   |     |        |   |         |   |   |   |
| Commitments and contingent liabilities (Notes 7 and 8)    |   |     |        |   |         |   |   |   |
|                                                      |   |     |        |   |         |   |   |   |
| Common stock - $1 par value                               |   |     |        |   |         |   |   |   |
| Authorized:  2,000 shares; Issued and           |   |     |        |   |         |   |   |   |
| outstanding: one share (at paid-in amount)                |   |     | 745         |   |         |   | 745 |   |
| Additional paid-in capital                                |   |     | 2           |   |         |   | 2 |   |
| Retained earnings                                         |   |     | 2,591       |   |         |   | 3,062 |   |
| Accumulated other comprehensive income (loss)             |   |     | (88         | )      |         |   | 264 |   |
| Noncontrolling interests                                  |   |     |  76    |   |         |   |  70 |   |
| Total stockholder’s equity                          |   |     | 3,326       |   |         |   | 4,143 |   |
|                                                      |   |     |        |   |         |   |   |   |
| Total liabilities and stockholder’s equity          |   | $        | 28,776      |   |         | $      | 30,648 |   |
|                                                      |   |     |        |   |         |   |   |   |

----

| Six Months Ended June 30, 2009                                                                                                                                                                                                            |   | Commonstock |   |   | Additionalpaid-incapital |   |   | Retainedearnings |   |   | Accumulatedothercomprehensiveincome (loss) |   |   | Noncontrollinginterests |   |   | Total  |   |   | Comprehensiveincome (loss) |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|--------------------------|--------|--------|------------------|--------|--------|--------------------------------------------|--------|--------|-------------------------|--------|--------|--------|--------|--------|----------------------------|--------|
| Balance at December 31, 2008                                                                                                                                                                                                              |   | $           | 745    |   |                     | $      | -      |             |   | $      | 2,803                                      |   |   | $                       | (37    | )      |   | $      | 61     |                       |   | $ | 3,572 |   |   |   |   |
| Profit of consolidated companies                                                                                                                                                                                                          |   |        |   |   |                     |   |   |             |   |   | 140                                        |   |   |                    |   |   |   |   | 8      |                       |   |   | 148 |   |   | $ | 148 |   |
| Foreign currency translation, net oftax of $16                                                                                                                                                                                            |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    | 147    |   |   |   |   |                       |   |   | 147 |   |   |   | 147 |   |
| Derivative financial instruments                                                                                                                                                                                                          |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    |   |   |   |   |   |                       |   |   |   |   |   |   |   |   |
|   Gains (losses) deferred, net of  tax of $5                                                                                                                                                                          |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    | (13    | )      |   |   |   |                       |   |   | (13 | ) |   |   | (13 | ) |
|  (Gains) losses reclassified to  earnings, net of tax of  $14                                                                                                                                                    |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    | 28     |   |   |   |   |                       |   |   | 28 |   |   |   | 28 |   |
| Retained interests                                                                                                                                                                                                                        |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    |   |   |   |   |   |                       |   |   |   |   |   |   |   |   |
| Gains (losses) deferred, net of  tax of $12 1                                                                                                                                                                                        |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    | (22    | )      |   |   |   |                       |   |   | (22 | ) |   |   | (22 | ) |
| (Gains) losses reclassified to  earnings, net of tax of $10                                                                                                                                                                     |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    | 18     |   |   |   |   |                       |   |   | 18 |   |   |   | 18 |   |
| Balance at June 30, 2009                                                                                                                                                                                                                  |   | $           | 745    |   |                     | $      | -      |             |   | $      | 2,943                                      |   |   | $                       | 121    |   |   | $      | 69     |                       |   | $ | 3,878 |   |   | $ | 306 |   |
|                                                                                                                                                                                                                                      |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    |   |   |   |   |   |                       |   |   |   |   |   |   |   |   |
| Six Months Ended June 30, 2010                                                                                                                                                                                                            |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    |   |   |   |   |   |                       |   |   |   |   |   |   |   |   |
| Balance at December 31, 2009                                                                                                                                                                                                              |   | $           | 745    |   |                     | $      | 2      |             |   | $      | 3,062                                      |   |   | $                       | 264    |   |   | $      | 70     |                       |   | $ | 4,143 |   |   |   |   |   |
| Adjustment to adopt consolidationof variable-interest entities                                                                                                                                                                            |   |        | -      |   |                     |   | -      |             |   |   | (6                                         | )      |   |                    | 3      |   |   |   | -      |                       |   |   | (3 | ) |   |   |   |   |
| Balance at January 1, 2010                                                                                                                                                                                                                |   | $           | 745    |   |                     | $      | 2      |             |   | $      | 3,056                                      |   |   | $                       | 267    |   |   | $      | 70     |                       |   | $ | 4,140 |   |   |   |   |   |
| Profit of consolidated companies                                                                                                                                                                                                          |   |        |   |   |                     |   |   |             |   |   | 135                                        |   |   |                    |   |   |   |   | 5      |                       |   |   | 140 |   |   | $ | 140 |   |
| Dividend paid to Cat Inc.                                                                                                                                                                                                                 |   |        |   |   |                     |   |   |             |   |   | (600                                       | )      |   |                    |   |   |   |   |   |                       |   |   | (600 | ) |   |   | - |   |
| Foreign currency translation,                                                                                                                                                                                                             |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    |   |   |   |   |   |                       |   |   |   |   |   |   |   |   |
| net of tax of $153                                                                                                                                                                                                                        |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    | (371   | )      |   |   | 1      |                       |   |   | (370 | ) |   |   | (370 | ) |
| Derivative financial instruments                                                                                                                                                                                                          |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    |   |   |   |   |   |                       |   |   |   |   |   |   |   |   |
| Gains (losses) deferred,                                                                                                                                                                                                                  |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    |   |   |   |   |   |                       |   |   |   |   |   |   |   |   |
| net of tax of $1                                                                                                                                                                                                                          |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    | (5     | )      |   |   |   |                       |   |   | (5 | ) |   |   | (5 | ) |
| (Gains) losses reclassified toearnings, net of tax of $11                                                                                                                                                                                 |   |        |   |   |                     |   |   |             |   |   |                                       |   |   |                    | 21     |   |   |   |   |                       |   |   | 21 |   |   |   | 21 |   |
| Balance at June 30, 2010                                                                                                                                                                                                                  |   | $           | 745    |   |                     | $      | 2      |             |   | $      | 2,591                                      |   |   | $                       | (88    | )      |   | $      | 76     |                       |   | $ | 3,326 |   |   | $ | (214 | ) |
|                                                                                                                                                                                                                                      |   |
| 1Includes noncredit component of other-than-temporary impairment losses on securitized retained interests of ($10) million, net of tax of $5 million, for the six months ended June 30, 2009. See Note 9 for additional information. |   |
|                                                                                                                                                                                                                                      |   |

----

|                                                                                                                                                                                                                                                                                                                                                          |   | Six Months Ended |            |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|-----------------|
|                                                                                                                                                                                                                                                                                                                                                          |   | June 30,         |            |
|                                                                                                                                                                                                                                                                                                                                                          |   | 2010             |            |   | 2009 |   |
| Cash flows from operating activities:                                                                                                                                                                                                                                                                                                                         |   |             |            |   |   |   |
| Profit of consolidated companies                                                                                                                                                                                                                                                                                                                              |   | $                | 140             |   |   | $ | 148 |   |
| Adjustments for non-cash items:                                                                                                                                                                                                                                                                                                                               |   |             |            |   |   |   |   |   |
|         Depreciation and amortization                                                                                                                                                                                                                                                                                 |   |             | 363             |   |   |   | 362 |   |
| Amortization of receivables purchase discount                                                                                                                                                                                                                                                                                                                 |   |             | (60             | ) |   |   | (92 | ) |
| Provision for credit losses                                                                                                                                                                                                                                                                                                                                   |   |             | 95              |   |   |   | 81 |   |
| Gain on sales of receivables                                                                                                                                                                                                                                                                                                                                  |   |             | -               |   |   |   | (10 | ) |
| Other, net                                                                                                                                                                                                                                                                                                                                                    |   |             | (132            | ) |   |   | (85 | ) |
| Changes in assets and liabilities:                                                                                                                                                                                                                                                                                                                            |   |             |            |   |   |   |   |   |
| Receivables from others                                                                                                                                                                                                                                                                                                                                       |   |             | 77              |   |   |   | 111 |   |
| Other receivables/payables with Caterpillar                                                                                                                                                                                                                                                                                                                   |   |             | (4              | ) |   |   | (43 | ) |
| Payable to dealers and others                                                                                                                                                                                                                                                                                                                                 |   |             | 18              |   |   |   | (67 | ) |
| Accrued interest payable                                                                                                                                                                                                                                                                                                                                      |   |             | (28             | ) |   |   | 56 |   |
| Accrued expenses and other liabilities, net                                                                                                                                                                                                                                                                                                                   |   |             | 5               |   |   |   | (106 | ) |
| Income taxes payable                                                                                                                                                                                                                                                                                                                                          |   |             | (52             | ) |   |   | 148 |   |
| (Payments) proceeds on interest rate swaps                                                                                                                                                                                                                                                                                                                    |   |             |  (1        | ) |   |   |  187 |   |
| Net cash provided by operating activities                                                                                                                                                                                                                                                                                                                     |   |             |  421       |   |   |   |  690 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |             |            |   |   |   |   |   |
| Cash flows from investing activities:                                                                                                                                                                                                                                                                                                                         |   |             |            |   |   |   |   |   |
| Expenditures for equipment on operating leases and for non-leased equipment                                                                                                                                                                                                                                                                                   |   |             | (387            | ) |   |   | (443 | ) |
| Proceeds from disposals of equipment                                                                                                                                                                                                                                                                                                                          |   |             | 725             |   |   |   | 413 |   |
| Additions to finance receivables                                                                                                                                                                                                                                                                                                                              |   |             | (11,689         | ) |   |   | (10,939 | ) |
| Collections of finance receivables                                                                                                                                                                                                                                                                                                                            |   |             | 11,469          |   |   |   | 13,170 |   |
| Proceeds from sales of receivables                                                                                                                                                                                                                                                                                                                            |   |             | 5               |   |   |   | 884 |   |
| Net change in variable lending to Caterpillar                                                                                                                                                                                                                                                                                                                 |   |             | (50             | ) |   |   | 34 |   |
| Additions to other notes receivable with Caterpillar                                                                                                                                                                                                                                                                                                          |   |             | (87             | ) |   |   | (1,550 | ) |
| Collections on other notes receivable with Caterpillar                                                                                                                                                                                                                                                                                                        |   |             | 333             |   |   |   | 500 |   |
| Restricted cash and cash equivalents activity, net                                                                                                                                                                                                                                                                                                            |   |             | (30             | ) |   |   | - |   |
| Other, net                                                                                                                                                                                                                                                                                                                                                    |   |             |    13 |   |   |   |  (164 | ) |
| Net cash provided by investing activities                                                                                                                                                                                                                                                                                                                     |   |             |  302       |   |   |   |  1,905 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |             |            |   |   |   |   |   |
| Cash flows from financing activities:                                                                                                                                                                                                                                                                                                                         |   |             |            |   |   |   |   |   |
| Net change in variable lending from Caterpillar                                                                                                                                                                                                                                                                                                               |   |             | (26             | ) |   |   | (430 | ) |
| Proceeds from borrowings with Caterpillar                                                                                                                                                                                                                                                                                                                     |   |             | 600             |   |   |   | - |   |
| Proceeds from debt issued (original maturities greater than three months)                                                                                                                                                                                                                                                                                     |   |             | 4,125           |   |   |   | 8,107 |   |
| Payments on debt issued (original maturities greater than three months)                                                                                                                                                                                                                                                                                       |   |             | (5,523          | ) |   |   | (6,655 | ) |
| Short-term borrowings, net (original maturities three months or less)                                                                                                                                                                                                                                                                                         |   |             | (106            | ) |   |   | (2,492 | ) |
| Dividend paid to Caterpillar                                                                                                                                                                                                                                                                                                                                  |   |             | (600            | ) |   |   | - |   |
| Net cash used in financing activities                                                                                                                                                                                                                                                                                                                         |   |             | (1,530          | ) |   |   | (1,470 | ) |
|                                                                                                                                                                                                                                                                                                                                                          |   |             |            |   |   |   |   |   |
| Effect of exchange rate changes on cash                                                                                                                                                                                                                                                                                                                       |   |             |   (86 | ) |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |             |            |   |   |   |   |   |
| (Decrease) Increase in cash and cash equivalents                                                                                                                                                                                                                                                                                                              |   |             | (893            | ) |   |   | 1,125 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |             |            |   |   |   |   |   |
| Cash and cash equivalents at beginning of year                                                                                                                                                                                                                                                                                                                |   |             | 2,536           |   |   |   | 1,080 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |             |            |   |   |   |   |   |
| Cash and cash equivalents at end of period                                                                                                                                                                                                                                                                                                                    |   | $                |  1,643     |   |   | $ |  2,205 |   |
|                                                                                                                                                                                                                                                                                                                                                          |   |             |            |   |   |   |   |   |
| Non-cash activity: On January 1, 2010, we adopted the provisions of the new consolidation of variable-interest entities accounting guidance, which resulted in the consolidation of qualifying special purpose entities related to our asset-backed securitization program which had previously been recorded off-balance sheet. Please refer to Note 9. |   |

----

| 1. | Basis of Presentation |
|----|-----------------------|

----

| 2. | Accumulated other comprehensive income (loss) |
|----|-----------------------------------------------|

| (Millions of dollars)                               |   |          |   |   |          |   |
|-----------------------------------------------------|--------|---------------|--------|--------|---------------|--------|
|                                                |   | June 30, 2010 |   |   | June 30, 2009 |   |
|   Foreign currency translation            |   | $             | (63    | )      |          | $      | 187 |   |
|   Derivative financial instruments        |   |          | (25    | )      |          |   | (55 | ) |
|   Retained interests                      |   |          | -      |   |          |   | (11 | ) |
| Total Accumulated other comprehensive income (loss) |   | $             | (88    | )      |          | $      | 121 |   |
|                                                |   |          |   |   |          |   |   |   |

| 3. | New Accounting Pronouncements |
|----|-------------------------------|

----

----

| 4. | Fair Value Measurements |
|----|-------------------------|

| A.   | Fair Value Measurements |
|----------------|-------------------------|

| ·   | Level 1 – Quoted prices for identical instruments in active markets. |
|--------------------|----------------------------------------------------------------------------|

| ·   | Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

----

| (Millions of dollars)                             |   |              |   |   |    |   |    |    |   |   |                                   |   |
|---------------------------------------------------|--------|-------------------|--------|--------|---------|--------|---------|---------|--------|--------|----------------------------------------|--------|
|                                              |   | June 30, 2010     |   |
|                               |   | Level 1           |   |   | Level 2 |   |    | Level 3 |   |   | Total Assets/Liabilities,at Fair Value |   |
| Assets                                            |   |              |   |   |    |   |    |    |   |   |                                   |   |
|   Derivative financial instruments, net |   | $                 | -      |   |    | $      | 209     |    |   | $      | -                                      |   |   | $ | 209 |   |
| Total Assets                                      |   | $                 | -      |   |    | $      | 209     |    |   | $      | -                                      |   |   | $ | 209 |   |
| Liabilities                                       |   |              |   |   |    |   |    |    |   |   |                                   |   |   |   |   |   |
|   Guarantees                            |   | $                 | -      |   |    | $      |  - |    |   | $      | 4                                      |   |   | $ | 4 |   |
| Total Liabilities                                 |   | $                 | -      |   |    | $      | -       |    |   | $      | 4                                      |   |   | $ |  4 |   |
|                                              |   |              |   |   |    |   |    |    |   |   |                                   |   |   |   |   |   |
|                                              |   | December 31, 2009 |   |
|                                              |   | Level 1           |   |   | Level 2 |   |    | Level 3 |   |   | Total Assets/Liabilities,at Fair Value |   |
| Assets                                            |   |              |   |   |    |   |    |    |   |   |                                   |   |   |   |   |   |
|   Derivative financial instruments, net |   | $                 | -      |   |    | $      | 43      |    |   | $      | -                                      |   |   | $ | 43 |   |
|   Securitized retained interests        |   |              | -      |   |    |   | -       |    |   |   | 102                                    |   |   |   | 102 |   |
| Total Assets                                      |   | $                 | -      |   |    | $      | 43      |    |   | $      | 102                                    |   |   | $ | 145 |   |
| Liabilities                                       |   |              |   |   |    |   |    |    |   |   |                                   |   |   |   |   |   |
|   Guarantees                            |   | $                 | -      |   |    | $      |  - |    |   | $      | 4                                      |   |   | $ |  4 |   |
| Total Liabilities                                 |   | $                 | -      |   |    | $      |  - |    |   | $      | 4                                      |   |   | $ |  4 |   |
|                                              |   |              |   |   |    |   |    |    |   |   |                                   |   |   |   |   |   |

----

| (Millions of dollars)                                                       |   | Securitized RetainedInterests |   |   | Guarantees |   |
|-----------------------------------------------------------------------------|--------|-------------------------------|--------|--------|------------|--------|
| Balance as of December 31, 2009                                             |   | $                             | 102    |   |       | $      | 4 |   |
|   Adjustment to adopt consolidation of variable-interest entities |   |                          | (102   | )      |       |   | - |   |
|   Issuance of guarantees                                          |   |                          | -      |   |       |   | 4 |   |
|   Expiration of guarantees                                        |   |                          | -      |   |       |   | (4 | ) |
| Balance as of June 30, 2010                                                 |   | $                             | -      |   |       | $      | 4 |   |
|                                                                        |   |                          |   |   |       |   |   |   |

| (Millions of dollars)                                                      |   | Securitized RetainedInterests |   |   | Guarantees |   |
|----------------------------------------------------------------------------|--------|-------------------------------|--------|--------|------------|--------|
| Balance as of December 31, 2008                                            |   | $                             | 52     |   |       | $      | 2 |   |
|   Gains or (losses) included in earnings (realized/unrealized) 1 |   |                          | (28    | )      |       |   | - |   |
|   Changes in Accumulated other comprehensive income (loss)       |   |                          | (6     | )      |       |   | - |   |
|   Purchases, issuances and settlements                           |   |                          | 86     |   |       |   | 1 |   |
| Balance as of June 30, 2009                                                |   | $                             | 104    |   |       | $      | 3 |   |
|                                                                       |   |                          |   |   |       |   |   |   |

| B. | Fair Values of Financial Instruments |
|----|--------------------------------------|

----

| (Millions of dollars)                                 |   | Fair Values of Financial Instruments |    |
|-------------------------------------------------------|--------|--------------------------------------|---------|
|                                                  |   | June 30, 2010                        |    |   | December 31, 2009 |   |
|                                                  |   | Carrying Amount                 |    |   | FairValue |   |   | CarryingAmount |   |   | FairValue |   |
| Cash and cash equivalents                             |   | $                                    | 1,643   |   |   | $ | 1,643 |   |   | $ | 2,536 |   |   | $ | 2,536 |   |
| Foreign currency contracts:                           |   |                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   In a receivable position                  |   | $                                    | 9       |   |   | $ | 9 |   |   | $ | 20 |   |   | $ | 20 |   |
|   In a payable position                     |   | $                                    | (5      | ) |   | $ | (5 | ) |   | $ | (18 | ) |   | $ | (18 | ) |
| Finance receivables, net (excluding finance leases) 1 |   | $                                    | 14,958  |   |   | $ | 14,451 |   |   | $ | 14,809 |   |   | $ | 14,304 |   |
| Restricted cash and cash equivalents2                 |   | $                                    | 135     |   |   | $ | 135 |   |   | $ | 13 |   |   | $ | 13 |   |
| Short-term borrowings                                 |   | $                                    | (3,430  | ) |   | $ | (3,430 | ) |   | $ | (3,721 | ) |   | $ | (3,721 | ) |
| Long-term debt                                        |   | $                                    | (20,244 | ) |   | $ | (21,312 | ) |   | $ | (21,523 | ) |   | $ | (22,296 | ) |
| Interest rate swaps:                                  |   |                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   In a net receivable position              |   | $                                    | 242     |   |   | $ | 242 |   |   | $ | 147 |   |   | $ | 147 |   |
|   In a net payable position                 |   | $                                    | (37     | ) |   | $ | (37 | ) |   | $ | (106 | ) |   | $ | (106 | ) |
| Securitized retained interests                        |   | $                                    | -       |   |   | $ | - |   |   | $ | 102 |   |   | $ | 102 |   |
| Guarantees                                            |   | $                                    | (4      | ) |   | $ | (4 | ) |   | $ | (4 | ) |   | $ | (4 | ) |
|                                                  |   |                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |

| 5. | Segment Information |
|----|---------------------|

| ·  | North America: We have offices in the United States and Canada that serve local dealers and customers.                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | Europe: We have offices that serve dealers and customers in Europe, Africa, Middle East and the Commonwealth of Independent States.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| ·  | Diversified Services: This segment includes our Global Power Finance Division (formerly the Marine Services Division and Cat Power Finance) and our offices in Latin America that serve local dealers and customers.  The Global Power Finance Division finances marine vessels with Caterpillar engines, for all countries, and also provides debt financing for Caterpillar electrical power generation, gas compression and co-generation systems, as well as non-Caterpillar equipment that is powered by these systems, for all countries.  |
| ·  | Asia-Pacific: We have offices in Australia, New Zealand, China, Japan, South Korea and Southeast Asia that serve local dealers and customers, as well as mining customers worldwide.  This segment also provides project financing in various countries.                                                                                                                                                                                                                                                                                                        |

----

|   | Supplemental segment data for the three months ended June 30, |
|--------|---------------------------------------------------------------|

| (Millions of dollars) 2010 |   | NorthAmerica |   |   | Europe |   |   | Diversified Services  |   |   | Asia-Pacific |   |   | Total  |   |
|---------------------------------|--------|--------------|--------|--------|--------|--------|--------|---------------------------------|--------|--------|--------------|--------|--------|--------|--------|
| External revenue                |   | $            | 311    |   |   | $      | 87     |                            |   | $      | 115          |   |   | $      | 135    |   |   | $ | 648 |   |
| Inter-segment revenue           |   |         | 5      |   |   |   | -      |                            |   |   | -            |   |   |   | -      |   |   |   | 5 |   |
| Profit (loss)                   |   |         | 7      |   |   |   | 15     |                            |   |   | 32           |   |   |   | 28     |   |   |   | 82 |   |
|                            |   |         |   |   |   |   |   |                            |   |   |         |   |   |   |   |   |   |   |   |   |
|  2009                      |   | NorthAmerica |   |   | Europe |   |   | Diversified  Services      |   |   | Asia-Pacific |   |   | Total  |   |
| External revenue                |   | $            | 364    |   |   | $      | 110    |                            |   | $      | 108          |   |   | $      | 118    |   |   | $ | 700 |   |
| Inter-segment revenue           |   |         | 13     |   |   |   | -      |                            |   |   | -            |   |   |   | -      |   |   |   | 13 |   |
| Profit                          |   |         | 21     |   |   |   | 31     |                            |   |   | 12           |   |   |   | 25     |   |   |   | 89 |   |
|                            |   |         |   |   |   |   |   |                            |   |   |         |   |   |   |   |   |   |   |   |   |

|   | Supplemental segment data for the six months ended June 30, |
|--------|-------------------------------------------------------------|

| (Millions of dollars) 2010 |   | NorthAmerica |   |   | Europe |   |   | Diversified Services  |   |   | Asia-Pacific |   |   | Total  |   |
|---------------------------------|--------|--------------|--------|--------|--------|--------|--------|---------------------------------|--------|--------|--------------|--------|--------|--------|--------|
| External revenue                |   | $            | 611    |   |   | $      | 182    |                            |   | $      | 227          |   |   | $      | 259    |   |   | $ | 1,279 |   |
| Inter-segment revenue           |   |         | 12     |   |   |   | -      |                            |   |   | -            |   |   |   | -      |   |   |   | 12 |   |
| Profit (loss)                   |   |         | (3     | )      |   |   | 32     |                            |   |   | 53           |   |   |   | 53     |   |   |   | 135 |   |
|                            |   |         |   |   |   |   |   |                            |   |   |         |   |   |   |   |   |   |   |   |   |
|  2009                      |   | NorthAmerica |   |   | Europe |   |   | Diversified  Services      |   |   | Asia-Pacific |   |   | Total  |   |
| External revenue                |   | $            | 711    |   |   | $      | 222    |                            |   | $      | 218          |   |   | $      | 230    |   |   | $ | 1,381 |   |
| Inter-segment revenue           |   |         | 26     |   |   |   | -      |                            |   |   | -            |   |   |   | -      |   |   |   | 26 |   |
| Profit                          |   |         | 33     |   |   |   | 43     |                            |   |   | 27           |   |   |   | 37     |   |   |   | 140 |   |
|                            |   |         |   |   |   |   |   |                            |   |   |         |   |   |   |   |   |   |   |   |   |

| (Millions of dollars)   |   | NorthAmerica |   |   | Europe |   |   | DiversifiedServices  |   |   | Asia-Pacific |   |   | Total  |   |
|-----------------------------------|--------|--------------|--------|--------|--------|--------|--------|---------------------------|--------|--------|--------------|--------|--------|--------|--------|
| Assets as of June 30, 2010        |   | $            | 16,568 |   |   | $      | 4,014  |                      |   | $      | 6,892        |   |   | $      | 4,732  |   |   | $ | 32,206 |   |
|                              |   |         |   |   |   |   |   |                      |   |   |         |   |   |   |   |   |   |   |   |   |
| Assets as of December 31, 2009    |   | $            | 18,014 |   |   | $      | 5,105  |                      |   | $      | 6,982        |   |   | $      | 4,814  |   |   | $ | 34,915 |   |
|                              |   |         |   |   |   |   |   |                      |   |   |         |   |   |   |   |   |   |   |   |   |

----

| (Millions of dollars)Reconciliation of assets: |   | June 30, 2010 |   |   | December 31, 2009 |   |
|------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
| Assets from segments                           |   | $             | 32,206 |   |              | $      | 34,915 |   |
| Less: Investment in subsidiaries               |   |          | (1,090 | )      |              |   | (1,080 | ) |
| Less: Inter-segment balances                   |   |          | (2,340 | )      |              |   | (3,187 | ) |
| Total                                          |   | $             | 28,776 |   |              | $      | 30,648 |   |
|                                           |   |          |   |   |              |   |   |   |

| 6. | Derivative Financial Instruments and Risk Management |
|----|------------------------------------------------------|

----

| (Millions of dollars)                        |                                                  |   |                         |   |   |              |   |
|----------------------------------------------|-------------------------------------------------------|--------|------------------------------|--------|--------|-------------------|--------|
|                                         |                                                  |   | Asset (Liability) Fair Value |   |
|                                         | Consolidated Statements ofFinancial Position Location |   | June 30, 2010                |   |   | December 31, 2009 |   |
| Designated derivatives                       |                                                  |   |                         |   |   |              |   |
|    Interest rate contracts    | Other assets                                          |   | $                            | 242    |   |              | $      | 145 |   |
|    Interest rate contracts    | Accrued expenses                                      |   |                         | (35    | )      |              |   | (100 | ) |
|                                         |                                                  |   | $                            | 207    |   |              | $      | 45 |   |
| Undesignated derivatives                     |                                                  |   |                         |   |   |              |   |   |   |
|    Foreign exchange contracts | Other assets                                          |   | $                            | 9      |   |              | $      | 20 |   |
|    Foreign exchange contracts | Accrued expenses                                      |   |                         | (5     | )      |              |   | (18 | ) |
|    Interest rate contracts    | Other assets                                          |   |                         | -      |   |              |   | 2 |   |
|    Interest rate contracts    | Accrued expenses                                      |   |                         | (2     | )      |              |   | (6 | ) |
|                                         |                                                  |   | $                            | 2      |   |              | $      | (2 | ) |
|                                         |                                                  |   |                         |   |   |              |   |   |   |

----

| (Millions of dollars)                                                        |   |   |   |
|------------------------------------------------------------------------------|--------|--------|--------|
| Balance as of December 31, 2009, net of tax of $21                           |   | $      | (41    | ) |
|    Gains (losses) deferred during the year, net of tax of $1  |   |   | (5     | ) |
|    (Gains) losses reclassified to earnings, net of tax of $11 |   |   | 21     |   |
| Balance as of June 30, 2010, net of tax of $11                               |   | $      | (25    | ) |
|                                                                         |   |   |   |   |

| (Millions of dollars)                                                        |   |   |   |
|------------------------------------------------------------------------------|--------|--------|--------|
| Balance as of December 31, 2008, net of tax of $38                           |   | $      | (70    | ) |
|    Gains (losses) deferred during the year, net of tax of $5  |   |   | (13    | ) |
|    (Gains) losses reclassified to earnings, net of tax of $14 |   |   | 28     |   |
| Balance as of June 30, 2009, net of tax of $29                               |   | $      | (55    | ) |
|                                                                         |   |   |   |   |

| Fair Value Hedges       |
|-------------------------|
| (Millions of dollars)   |
|                    |   |   | Three Months EndedJune 30, 2010 |   | Three Months EndedJune 30, 2009 |
|                    | Classification |   | Gains (Losses)on Derivatives |   | Gains (Losses)on Borrowings |   | Gains (Losses)on Derivatives |   | Gains (Losses)on Borrowings |
| Interest rate contracts | Other income (expense) |   | $ | 88 |   |   | $ | (83) |   |   | $ | (160) |   |   | $ | 155 |   |
|                    |   |   | $ | 88 |   |   | $ | (83) |   |   | $ | (160) |   |   | $ | 155 |   |
|                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                    |   |   | Six Months EndedJune 30, 2010 |   | Six Months EndedJune 30, 2009 |
| Interest rate contracts | Other income (expense) |   | $ | 141 |   |   | $ | (134) |   |   | $ | (220) |   |   | $ | 234 |   |
|                    |   |   | $ | 141 |   |   | $ | (134) |   |   | $ | (220) |   |   | $ | 234 |   |
|                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| Cash Flow Hedges        |
|-------------------------|
| (Millions of dollars)   |
|                    |
|                    |   |   | Three Months Ended June 30, 2010 |
|                    | Classification ofGains (Losses) |   | Reclassified from AOCIto Earnings(Effective Portion) |   | Recognized in Earnings(Ineffective Portion) |
| Interest rate contracts | Interest expense |   | $ | (15) |   |   | $ | - |   |
| Interest rate contracts | Other income (expense) |   |   |         - |   |   |   |       - |   |
|                    |   |   | $ | (15) |   |   | $ | - |   |
|                    |   |   |   |   |   |   |   |   |   |
|                    |   |   |   |
|                    |   |   | Three Months Ended June 30, 2009 |
|                    | Classification ofGains (Losses) |   | Reclassified from AOCIto Earnings(Effective Portion) |   | Recognized in Earnings(Ineffective Portion) |
| Interest rate contracts | Interest expense |   | $ | (22) |   |   | $ | - |   |
| Interest rate contracts | Other income (expense) |   |   |         - |   |   |   |       4 |   |
|                    |   |   | $ | (22) |   |   | $ | 4 |   |
|                    |   |   |   |   |
|                    |   |   | Six Months Ended June 30, 2010 |
|                    | Classification ofGains (Losses) |   | Reclassified from AOCIto Earnings(Effective Portion) |   | Recognized in Earnings(Ineffective Portion) |
| Interest rate contracts | Interest expense |   | $ | (32) |   |   | $ | - |   |
| Interest rate contracts | Other income (expense) |   |   |         - |   |   |   |     1 |   |
|                    |   |   | $ | (32) |   |   | $ | 1 |   |
|                    |   |   |   |   |   |   |   |   |   |
|                    |   |   |   |
|                    |   |   | Six Months Ended June 30, 2009 |
|                    | Classification ofGains (Losses) |   | Reclassified from AOCIto Earnings(Effective Portion) |   | Recognized in Earnings(Ineffective Portion) |
| Interest rate contracts | Interest expense |   | $ | (42) |   |   | $ | - |   |
| Interest rate contracts | Other income (expense) |   |   |         - |   |   |   |     5 |   |
|                    |   |   | $ | (42) |   |   | $ | 5 |   |
|                    |   |   |   |   |

----

| Undesignated Derivatives   |                                |   |                            |   |   |                            |   |
|----------------------------|-------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|
| (Millions of dollars)      |                                |   |                            |   |   |                            |   |
|                       | Classification of Gains or (Losses) |   | Three Months EndedJune 30, 2010 |   |   | Three Months EndedJune 30, 2009 |   |
| Foreign exchange contracts | Other income (expense)              |   | $                               | (12    | )      |                            | $      | (81 | ) |
| Interest rate contracts    | Other income (expense)              |   |                            | -      |   |                            |   | 4 |   |
|                       |                                |   | $                               | (12    | )      |                            | $      | (77 | ) |
|                       |                                |   |                            |   |   |                            |   |   |   |
|                       | Classification of Gains or (Losses) |   | Six Months EndedJune 30, 2010   |   |   | Six Months EndedJune 30, 2009   |   |
| Foreign exchange contracts | Other income (expense)              |   | $                               | 11     |   |                            | $      | (66 | ) |
| Interest rate contracts    | Other income (expense)              |   |                            | 1      |   |                            |   | 1 |   |
|                       |                                |   | $                               | 12     |   |                            | $      | (65 | ) |
|                       |                                |   |                            |   |   |                            |   |   |   |
|                       |                                |   |                            |   |   |                            |   |   |   |

| 7. | Guarantees |
|----|------------|

| (Millions of dollars) |   | June 30, 2010 |   |   | December 31, 2009 |   |
|-----------------------|--------|---------------|--------|--------|-------------------|--------|
| Customer guarantees   |   | $             | 147    |   |              | $      | 157 |   |
| Limited indemnity     |   |          | 18     |   |              |   | 20 |   |
| Total guarantees      |   | $             | 165    |   |              | $      | 177 |   |
|                  |   |          |   |   |              |   |   |   |

----

| 8. | Contingencies |
|----|---------------|

| 9. | Sales and Servicing of Finance Receivables |
|----|--------------------------------------------|

----

| (Millions of dollars)                                           |   | December 31, 2009 |
|-----------------------------------------------------------------|--------|------------------------|
| Cash flow weighted-average discount rates on retained interests |   | 7.7% to 12.4%          |
| Weighted-average maturity in months                             |   | 22                     |
| Expected prepayment rate                                        |   | 18.0%                  |
| Expected credit losses                                          |   | 4.7% to 4.8%           |
|                                                            |   |                   |

----

| (Millions of dollars)                                                                      |   | Three MonthsEnded |   |   | Six MonthsEnded |   |
|--------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|-----------------|--------|
|                                                                                       |   | June 30, 2009     |   |   | June 30, 2009   |   |
| Total other-than-temporary impairment losses                                               |   | $                 | 24     |   |            | $      | 46 |   |
| Portion of losses recognized in Accumulated other comprehensive income (loss) before taxes |   |              | (15    | )      |            |   | (15 | ) |
| Net impairment losses recognized in earnings 1                                             |   | $                 | 9      |   |            | $      | 31 |   |
|                                                                                       |   |              |   |   |            |   |   |   |

| (Millions of dollars)                                                                                              |   | Three Months       |   |
|--------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|
|                                                                                                               |   | EndedJune 30, 2009 |   |
|      Cumulative credit loss as of April 1, 2009                                           |   | $                  | -      |   |
|      Credit losses for which an other-than-temporary impairment was previously recognized |   |               | 8      |   |
|      Cumulative credit loss as of June 30, 2009                                           |   | $                  | 8      |   |
|                                                                                                               |   |               |   |   |

----

| (Millions of dollars)                                         |   | For Six Months EndedJune 30, |   |
|---------------------------------------------------------------|--------|------------------------------|--------|
|                                                          |   | 2010                         |   |   | 2009 |   |
| Cash proceeds from sales of receivables to conduits           |   | $                            | -      |   |   | $ | 791 |   |
| Cash flows received on the interests that continue to be held |   | $                            | 3,500  |   |   | $ | 4,496 |   |
|                                                          |   |                         |   |   |   |   |   |   |

----

| 10. | Income Taxes |
|-----|--------------|

----

| ·   | The decrease in revenues was principally due to a $72 million impact from lower earning assets (finance receivables and operating leases at constant interest rates), partially offset by a $17 million favorable impact from returned or repossessed equipment and the absence of a $9 million write-down on retained interests related to the securitized asset portfolio that occurred in the second quarter of 2009. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Profit before income taxes was $95 million for the second quarter of 2010, compared to $122 million for the second quarter of 2009.  The decrease was principally due to a $26 million unfavorable impact from lower average earning assets, a $13 million decrease in other miscellaneous revenue items and a $9 million increase in general, operating and administrative expense.  These decreases in pre-tax profit were partially offset by a $17 million favorable impact from returned or repossessed equipment and the absence of a $9 million write-down on retained interests related to the securitized asset portfolio that occurred in the second quarter of 2009. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The provision for income taxes in the second quarter reflects an estimated annual effective tax rate of 22 percent and includes a favorable, discrete tax benefit of $10 million from a non-U.S. income tax refund claim related to a prior year.  The estimated annual effective tax rate of 22 percent is down from 23 percent from the second quarter of 2009. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | New retail financing was $2.5 billion, an increase of $613 million, or 33 percent, from second quarter of 2009.  The increase primarily related to improvement in our North America, Asia-Pacific and Europe operating segments. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | At the end of the second quarter of 2010, past dues were 5.33 percent, down from 6.06 percent at the end of the first quarter and 5.54 percent at the end of 2009.  At the end of the second quarter of 2009, past dues were 5.53 percent.  The reduction in past dues from year-end is primarily due to the general improvement in global economic conditions. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Bad debt write-offs, net of recoveries, were $52 million for the second quarter of 2010, down $3 million from the second quarter of 2009.  Second-quarter 2010 annualized losses were 0.91 percent of the average retail portfolio compared to 0.89 percent for the second quarter of 2009 and 1.03 percent for the full-year 2009. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | At the end of the second quarter of 2010, our allowance for credit losses was 1.70 percent of net finance receivables, increasing from 1.64 percent on December 31, 2009, and 1.55 percent at the end of the second quarter of 2009.  At the end of the second quarter of 2010, the allowance for credit losses totaled $383 million, compared with $377 million on December 31, 2009, and $378 million at the end of the second quarter of 2009.  The increase of $5 million in allowance for credit losses year-over-year reflected a $34 million increase associated with the higher allowance rate, partially offset by a $29 million decrease due to a reduction in the overall net finance receivable portfolio. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (Millions of dollars)                                                    |   | Three Months Ended June 30, |   |
|--------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                     |   | 2010                             |   |   | 2009 |   |
| Interest income on Notes Receivable from Caterpillar                     |   | $                                | 24     |   |   | $ | 31 |   |
| Finance receivable and operating lease fees (including late charges)     |   |                             | 18     |   |   |   | 17 |   |
| Net gain/(loss) on returned or repossessed equipment                     |   |                             | 5      |   |   |   | (12 | ) |
| Miscellaneous other revenue, net                                         |   |                             | 3      |   |   |   | 6 |   |
| Service fee income on sold receivables                                   |   |                             | 1      |   |   |   | 3 |   |
| Gain on sales of receivables                                             |   |                             | -      |   |   |   | 7 |   |
| Net loss related to retained interests in securitized retail receivables |   |                             | -      |   |   |   | (8 | ) |
| Total Other revenue, net                                                 |   | $                                | 51     |   |   | $ | 44 |   |
|                                                                     |   |                             |   |   |   |   |   |   |

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| (Millions of dollars)                                                          |   | Three Months Ended |    |
|--------------------------------------------------------------------------------|--------|--------------------|---------|
|                                                                           |   | June 30,           |    |
|                                                                           |   | 2010               |    |   | 2009 |   |
| Currency exchange gain                                                         |   | $                  | 10      |   |   | $ | 77 |   |
| Net loss on undesignated foreign exchange contracts (including forward points) |   |               | (12     | ) |   |   | (81 | ) |
| Net currency exchange loss                                                     |   |               | (2      | ) |   |   | (4 | ) |
|                                                                           |   |               |    |   |   |   |   |   |
| Net gain from interest rate derivatives                                        |   |               |  5 |   |   |   |  4 |   |
| Total Other income (expense)                                                   |   | $                  | 3       |   |   | $ | - |   |
|                                                                           |   |               |    |   |   |   |   |   |

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| (Millions of dollars)                                                    |   | Six Months Ended June 30, |   |
|--------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                     |   | 2010                           |   |   | 2009 |   |
| Interest income on Note Receivable from Caterpillar                      |   | $                              | 46     |   |   | $ | 48 |   |
| Finance receivable and operating lease fees (including late charges)     |   |                           | 32     |   |   |   | 34 |   |
| Miscellaneous other revenue, net                                         |   |                           | 6      |   |   |   | 12 |   |
| Service fee income on sold receivables                                   |   |                           | 1      |   |   |   | 4 |   |
| Gain on sales of receivables                                             |   |                           | -      |   |   |   | 10 |   |
| Net loss related to retained interests in securitized retail receivables |   |                           | -      |   |   |   | (28 | ) |
| Net loss on returned or repossessed equipment                            |   |                           | (13    | ) |   |   |  (19 | ) |
| Total other revenues, net                                                |   | $                              | 72     |   |   | $ | 61 |   |
|                                                                     |   |                           |   |   |   |   |   |   |

----

| (Millions of dollars)                                                                 |   | Six Months Ended |    |
|---------------------------------------------------------------------------------------|--------|------------------|---------|
|                                                                                  |   | June 30,         |    |
|                                                                                  |   | 2010             |    |   | 2009 |   |
| Currency exchange gain/(loss)                                                         |   | $                | (17     | ) |   | $ | 28 |   |
| Net gain/(loss) on undesignated foreign exchange contracts (including forward points) |   |             | 11      |   |   |   | (66 | ) |
| Net currency exchange loss                                                            |   |             | (6      | ) |   |   | (38 | ) |
|                                                                                  |   |             |    |   |   |   |   |   |
| Net gain from interest rate derivatives                                               |   |             |  9 |   |   |   |  20 |   |
| Total Other income (expense)                                                          |   | $                | 3       |   |   | $ | (18 | ) |
|                                                                                  |   |             |    |   |   |   |   |   |

----

| (Millions of dollars)                                            |   | June 30, |   |   | December 31, |   |
|------------------------------------------------------------------|--------|----------|--------|--------|--------------|--------|
|                                                             |   | 2010     |   |   | 2009         |   |
| Securitized Retail Installment Sale Contracts and Finance Leases |   |     |   |   |         |   |
| Installment sale contracts securitized                           |   | $        | -      |   |         | $      | 336 |   |
| Finance leases securitized                                       |   |     | -      |   |         |   | 10 |   |
| Less: Retained interests (included in Other assets)              |   |     | -      |   |         |   | (102 | ) |
| Off-balance sheet securitized retail receivables                 |   | $        | -      |   |         | $      | 244 |   |
|                                                             |   |     |   |   |         |   |   |   |
| Other Managed Assets                                             |   |     |   |   |         |   |   |   |
| Retail finance leases                                            |   | $        | 153    |   |         | $      | 190 |   |
| Retail installment sale contracts                                |   |     | 118    |   |         |   | 178 |   |
| Operating leases                                                 |   |     | 62     |   |         |   | 90 |   |
| Retail notes receivable                                          |   |     | 9      |   |         |   | 19 |   |
| Other managed receivables/leases                                 |   | $        | 342    |   |         | $      | 477 |   |
|                                                             |   |     |   |   |         |   |   |   |
| Total off-balance sheet managed assets                           |   | $        | 342    |   |         | $      | 721 |   |
|                                                             |   |     |   |   |         |   |   |   |

| (Millions of dollars)                                           |   | Three Months Ended |   |   | Six Months Ended |   |
|-----------------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                            |   | June 30,           |   |   | June 30,         |   |
|                                                            |   | 2010               |   |   | 2009             |   |   | 2010 |   |   | 2009 |   |
| Balance at beginning of the period                              |   | $                  | 394    |   |             | $      | 382 |   |   | $ | 377 |   |   | $ | 395 |   |
| Adjustment to adopt consolidation of variable-interest entities |   |               | -      |   |             |   | - |   |   |   | 18 |   |   |   | - |   |
| Provision for credit losses                                     |   |               | 47     |   |             |   | 43 |   |   |   | 95 |   |   |   | 81 |   |
| Receivables written off                                         |   |               | (65    | )      |             |   | (60 | ) |   |   | (120 | ) |   |   | (112 | ) |
| Recoveries on receivables previously written off                |   |               | 13     |   |             |   | 5 |   |   |   | 22 |   |   |   | 10 |   |
| Foreign currency translation adjustment                         |   |               | (6     | )      |             |   | 8 |   |   |   | (9 | ) |   |   | 4 |   |
| Balance at end of the period                                    |   | $                  | 383    |   |             | $      | 378 |   |   | $ | 383 |   |   | $ | 378 |   |
|                                                            |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |

----

----

| (Millions of dollars)                                |   | June 30,2010 |   |   | December 31,2009 |   |
|------------------------------------------------------|--------|--------------|--------|--------|------------------|--------|
| Medium-term notes, net of unamortized discount       |   | $            | 18,630 |   |             | $      | 20,258 |   |
| Commercial paper, net of unamortized discount        |   |         | 2,164  |   |             |   | 2,233 |   |
| Bank borrowings – long-term                    |   |         | 1,396  |   |             |   | 1,265 |   |
| Variable denomination floating rate demand notes     |   |         | 664    |   |             |   | 695 |   |
| Bank borrowings – short-term                   |   |         | 602    |   |             |   | 782 |   |
| Notes payable to Caterpillar                         |   |         | 600    |   |             |   | 26 |   |
| Secured borrowings                                   |   |         | 218    |   |             |   | - |   |
| Short-term note, net of unamortized premium          |   |         | -      |   |             |   | 11 |   |
|     Total outstanding borrowings |   | $            | 24,274 |   |             | $      | 25,270 |   |
|                                                 |   |         |   |   |             |   |   |   |

| (Millions of dollars) |   |   |   |
|-----------------------|--------|--------|--------|
| 2010                  |   | $      | 2,249  |   |
| 2011                  |   |   | 2,588  |   |
| 2012                  |   |   | 3,312  |   |
| 2013                  |   |   | 3,262  |   |
| 2014                  |   |   | 1,904  |   |
| Thereafter            |   |   | 5,315  |   |
| Total                 |   | $      | 18,630 |   |
|                  |   |   |   |   |

----

| ·   | The five-year facility of $1.62 billion expires in September 2012. |
|--------------------|--------------------------------------------------------------------|

| ·   | The five-year facility of $2.98 billion expires in September 2011. |
|--------------------|--------------------------------------------------------------------|

| ·   | The 364-day facility of $2.39 billion expires in September 2010. |
|--------------------|------------------------------------------------------------------|

----

----

----

----

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| 3.1  | Certificate of Incorporation of the Company, as amended (incorporated by reference from Exhibit 3.1 to the Company’s Form 10 for the year ended December 31, 1984).                                                                                                                                                                                                                       |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2  | Bylaws of the Company, as amended (incorporated by reference from Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q, for the quarter ended June 30, 2005).                                                                                                                                                                                                                       |
| 4.1  | Indenture, dated as of April 15, 1985, between the Company and Morgan Guaranty Trust Company of New York, as Trustee (incorporated by reference from Exhibit 4.1 to the Company’s Registration Statement on Form S-3, Commission File No. 33-2246).                                                                                                                                       |
| 4.2  | First Supplemental Indenture, dated as of May 22, 1986, amending the Indenture dated as of April 15, 1985, between the Company and Morgan Guaranty Trust Company of New York, as Trustee (incorporated by reference from Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q, for the quarter ended June 20, 1986).                                                                |
| 4.3  | Second Supplemental Indenture, dated as of March 15, 1987, amending the Indenture dated as of April 15, 1985, between the Company and Morgan Guaranty Trust Company of New York, as Trustee (incorporated by reference from Exhibit 4.3 to the Company’s Current Report on Form 8-K, dated April 24, 1987).                                                                               |
| 4.4  | Third Supplemental Indenture, dated as of October 2, 1989, amending the Indenture dated as of April 15, 1985, between the Company and Morgan Guaranty Trust Company of New York, as Trustee (incorporated by reference from Exhibit 4.3 to the Company’s Current Report on Form 8-K, dated October 16, 1989).                                                                             |
| 4.5  | Fourth Supplemental Indenture, dated as of October 1, 1990, amending the Indenture dated April 15, 1985, between the Company and Morgan Guaranty Trust Company of New York, as Trustee (incorporated by reference from Exhibit 4.3 to the Company’s Current Report on Form 8-K, dated October 29, 1990).                                                                                  |
| 4.6  | Indenture, dated as of July 15, 1991, between the Company and Continental Bank, National Association, as Trustee (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated July 25, 1991).                                                                                                                                                           |
| 4.7  | First Supplemental Indenture, dated as of October 1, 2005, amending the Indenture dated as of July 15, 1991, between the Company and U.S. Bank Trust National Association (as successor to the former Trustee)(incorporated by reference from Exhibit 4.3 to Amendment No. 5 to the Company’s Registration Statement on Form S-3 filed October 20, 2005, Commission File No. 333-114075). |
| 4.8  | Support Agreement, dated as of December 21, 1984, between the Company and Caterpillar (incorporated by reference from Exhibit 10.2 to the Company’s amended Form 10, for the year ended December 31, 1984).                                                                                                                                                                               |
| 4.9  | First Amendment to the Support Agreement dated June 14, 1995, between the Company and Caterpillar (incorporated by reference from Exhibit 4 to the Company’s Current Report on Form 8-K, dated June 14, 1995).                                                                                                                                                                            |
| 10.1 | Tax Sharing Agreement, dated as of June 21, 1984, between the Company and Caterpillar (incorporated by reference from Exhibit 10.3 to the Company’s amended Form 10, for the year ended December 31, 1984).                                                                                                                                                                               |

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| 10.2        | Five-Year Credit Agreement, dated as of September 21, 2006 (2006 Five-Year Credit Agreement), among the Company, Caterpillar, Caterpillar International Finance p.l.c., Caterpillar Finance Corporation, certain other financial institutions named therein and Citibank, N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citibank International p.l.c., ABN AMRO Bank N.V., Bank of America, N.A., Barclays Bank PLC, J.P. Morgan Securities, Inc., Société Générale and Citigroup Global Markets Inc. (incorporated by reference from Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed September 27, 2006, Commission File No. 0-11241). |
|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.3        | Japan Local Currency Addendum to the 2006 Five-Year Credit Agreement among the Company, Caterpillar, Caterpillar Finance Corporation, the Japan Local Currency Banks named therein, Citibank, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. (incorporated by reference from Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed September 27, 2006).                                                                                                                                                                                                                                                                                                          |
| 10.4        | Amendment No. 1 to Japan Local Currency Addendum to the 2006 Five-Year Credit Agreement among the Company, Caterpillar, Caterpillar Finance Corporation, the Japan Local Currency Banks named therein, Citibank, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. (incorporated by reference from Exhibit 99.5 to the Company’s Current Report on Form 8-K, filed January 26, 2009).                                                                                                                                                                                                                                                                                         |
| 10.5        | Local Currency Addendum to the 2006 Five-Year Credit Agreement among the Company, Caterpillar International Finance p.l.c., the Local Currency Banks named therein, Citibank, N.A. and Citibank International plc (incorporated by reference from Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed September 27, 2006).                                                                                                                                                                                                                                                                                                                                      |
| 10.6        | Amendment No. 1 to Local Currency Addendum to the 2006 Five-Year Credit Agreement among the Company, Caterpillar International Finance p.l.c., the Local Currency Banks named therein, Citibank, N.A. and Citibank International plc (incorporated by reference from Exhibit 99.4 to the Company’s Current Report on Form 8-K, filed January 26, 2009).                                                                                                                                                                                                                                                                                                                     |
| 10.7        | Amendment No. 1 to the 2006 Five-Year Credit Agreement among the Company, Caterpillar, Caterpillar Finance Corporation and Caterpillar International Finance p.l.c., the Banks, Japan Local Currency Banks and Local Currency Banks named therein, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citibank International plc and Citibank, N.A. (incorporated by reference from Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q, filed October 31, 2008).                                                                                                                                                                                                              |
| 10.8        | Omnibus Amendment and Waiver Agreement (Amendment No. 2) to the 2006 Five-Year Credit Agreement among the Company, Caterpillar, Caterpillar Finance Corporation, Caterpillar International Finance p.l.c., the Banks and Local Currency Banks named therein, Citibank International plc and Citibank, N.A. (incorporated by reference from Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q, filed October 31, 2008).                                                                                                                                                                                                                                            |
| 10.9        | Amendment No. 3 to the 2006 Five-Year Credit Agreement among the Company, Caterpillar, Caterpillar Finance Corporation and Caterpillar International Finance Limited (f/k/a Caterpillar International Finance p.l.c.), the Banks, Japan Local Currency Banks and Local Currency Banks named therein, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citibank International plc and Citibank, N.A. (incorporated by reference from Exhibit 99.4 to the Company’s Current Report on Form 8-K, filed September 23, 2008).                                                                                                                                                             |
| 10.10       | Amendment No. 4 to the 2006 Five-Year Credit Agreement among the Company, Caterpillar, Caterpillar Finance Corporation and Caterpillar International Finance Limited (f/k/a Caterpillar International Finance p.l.c.), the Banks, Japan Local Currency Banks and Local Currency Banks named therein, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citibank International plc and Citibank, N.A. (incorporated by reference from Exhibit 99.3 to the Company’s Current Report on Form 8-K, filed January 26, 2009).                                                                                                                                                               |
| 10.11       | Amendment No. 5 to the 2006 Five-Year Credit Agreement among the Company, Caterpillar, Caterpillar Finance Corporation and Caterpillar International Finance Limited (f/k/a Caterpillar International Finance p.l.c.), the Banks, Japan Local Currency Banks and Local Currency Banks named therein, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citibank International plc and Citibank, N.A. (incorporated by reference from Exhibit 99.5 to the Company’s Current Report on Form 8-K, filed September 23, 2009).                                                                                                                                                             |
| 10.12  | Five-Year Credit Agreement, dated as of September 20, 2007 (2007 Five-Year Credit Agreement), among the Company, Caterpillar, Caterpillar Finance Corporation, certain financial institutions named therein, Citibank, N.A., The Bank of Tokyo-Mitsubishi UFJ Ltd., ABN AMRO Bank N.V., Bank of America, N.A., Barclays Bank PLC, J.P. Morgan Securities, Inc., Société Générale and Citigroup Global Markets Inc. (incorporated by reference from Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed September 26, 2007).                                                                                                                 |
| 10.13       | Japan Local Currency Addendum to the 2007 Five-Year Credit Agreement among the Company, Caterpillar Finance Corporation, the Japan Local Currency Banks named therein, Citibank, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. (incorporated by reference from Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed September 26, 2007).                                                                                                                                                                                                                                                                                                                       |
| 10.14       | Amendment No. 1 to Japan Local Currency Addendum to the 2007 Five-Year Credit Agreement among the Company, Caterpillar Finance Corporation, the Japan Local Currency Banks named therein, Citibank, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. (incorporated by reference from Exhibit 99.6 to the Company’s Current Report on Form 8-K, filed January 26, 2009).                                                                                                                                                                                                                                                                                                      |
| 10.15       | Amendment No. 1 to the 2007 Five-Year Credit Agreement among the Company, Caterpillar and Caterpillar Finance Corporation, the Banks and Japan Local Currency Banks named therein, The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Citibank, N.A. (incorporated by reference from Exhibit 99.3 to the Company’s Current Report on Form 8-K, filed September 23, 2008).                                                                                                                                                                                                                                                                                                           |

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| 10.16 | Amendment No. 2 to the 2007 Five-Year Credit Agreement among the Company, Caterpillar and Caterpillar Finance Corporation, the Banks and Japan Local Currency Banks named therein, The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Citibank, N.A. (incorporated by reference from Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed January 26, 2009).                                                                                                                                                                                                                              |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.17 | Amendment No. 3 to the 2007 Five-Year Credit Agreement among the Company, Caterpillar and Caterpillar Finance Corporation, the Banks and Japan Local Currency Banks named therein, The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Citibank, N.A. (incorporated by reference from Exhibit 99.4 to the Company’s Current Report on Form 8-K, filed September 23, 2009).                                                                                                                                                                                                                            |
| 10.18 | 364-Day Credit Agreement dated September 17, 2009 (2009 364-Day Credit Agreement) among the Company, Caterpillar, Caterpillar Finance Corporation, the Banks named therein, Citibank, N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Royal Bank of Scotland PLC, Bank of America, N.A., Barclays Capital, The Investment Banking Division of Barclays Bank PLC, J.P. Morgan Securities, Inc., Société Générale and Citigroup Global Markets Inc. (incorporated by reference from Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed September 23, 2009). |
| 10.19 | Japan Local Currency Addendum to the 2009 364-Day Credit Agreement among the Company, Caterpillar Finance Corporation, the Japan Local Currency Banks named therein, Citibank, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. (incorporated by reference from Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed September 23, 2009).                                                                                                                                                                                                                                          |
| 12    | Computation of Ratio of Profit to Fixed Charges.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 31.1  | Certification of Kent M. Adams, President, Director and Chief Executive Officer of Caterpillar Financial Services Corporation, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                              |
| 31.2  | Certification of James A. Duensing, Executive Vice President and Chief Financial Officer of Caterpillar Financial Services Corporation, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                     |
| 32    | Certifications of Kent M. Adams, President, Director and Chief Executive Officer of Caterpillar Financial Services Corporation, and James A. Duensing, Executive Vice President and Chief Financial Officer of Caterpillar Financial Services Corporation, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                  |

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|                                             | Caterpillar Financial Services Corporation                   |
|--------------------------------------------------|--------------------------------------------------------------|
| (Registrant)                                     |                                                         |
|    Date:  July 30, 2010 | By:   /s/   Steven R. Elsesser |
|                                             | Steven R. Elsesser, Controller                               |

|    Date:  July 30, 2010 | By:  /s/   Kent M. Adams                   |
|--------------------------------------------------|----------------------------------------------------------------|
|                                             | Kent M. Adams, President, Director and Chief Executive Officer |

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