| Delaware(State      or other jurisdiction of incorporation or organization) |   | 36-2472404(I.R.S.      Employer Identification No.)  |
|-----------------------------------------------------------------------------|--------|-----------------------------------------------------------|

|   | Large      accelerated filer [  ] |   | Accelerated      filer [  ]    |
|--------|---------------------------------------------|--------|-----------------------------------------------|
|   | Non-accelerated      filer [X]              |   | Smaller      reporting Company [  ] |

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INDEX

INDEX

|   |           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | PageReference |
|--------|----------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|
|   |           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   | PART    I.     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   |           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   | Item      1.   |   | Business      (A)                                                                                                                                               | 3             |
|   | Item      1A.  |   | Risk      Factors                                                                                                                                               | 3             |
|   | Item      1B.  |   | Unresolved Staff      Comments                                                                                                                                  | 6             |
|   | Item      2.   |   | Properties (A)                                                                                                                                             | 6             |
|   | Item      3.   |   | Legal      Proceedings                                                                                                                                          | 6             |
|   | Item      4.   |   | Submission of Matters to a      Vote of Security Holder      (A)                                                                                                | 6             |
|   |           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   | PART      II.  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   |           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   | Item      5.   |   | Market for the Registrant’s      Common Equity and Related Stockholder Matters                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 7             |
|   | Item      6.   |   | Selected Financial Data      (A)                                                                                                                                | 7             |
|   | Item      7.   |   | Management's Discussion and      Analysis of Financial Condition and      Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 7             |
|   | Item      7A.  |   | Quantitative and Qualitative      Disclosures About Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 24            |
|   | Item      8.   |   | Financial Statements and      Supplementary Data                                                                                                           | 25            |
|   | Item      9.   |   | Changes in and Disagreements      with Accountants on Accounting and Financial      Disclosure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 58            |
|   | Item      9A.  |   | Controls and      Procedures                                                                                                                                    | 59            |
|   | Item      9B.  |   | Other      Information                                                                                                                                          | 63            |
|   |           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   | PART      III. |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   |           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   | Item      10.  |   | Directors and Executive      Officers of the Registrant      (A)                                                                                                | 64            |
|   | Item      11.  |   | Executive Compensation      (A)                                                                                                                                 | 64            |
|   | Item      12.  |   | Security Ownership of      Certain Beneficial Owners and Management and Related Transactions      (A)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 64            |
|   | Item      13.  |   | Certain Relationships      and Related Transactions      (A)                                                                                                    | 64            |
|   | Item      14.  |   | Principal Accountant Fees and      Services                                                                                                                     | 64            |
|   |           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   | PART      IV.  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   |           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   | Item      15.  |   | Exhibits, Financial Statement      Schedules and Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 65            |
|   |           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          |
|   | Signature      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 66            |

| (A)      -Omitted or amended or reduced as the registrant is a wholly-owned      subsidiary of Navistar, Inc., which is a wholly-owned subsidiary of      Navistar International Corporation, and meets the conditions set forth in      General Instructions I (1) (a) and (b) of Annual Report on Form 10-K and      is, therefore, filing this report with the reduced disclosure      format. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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INDEX

PART I

Item1.     Business

Item 1A.     RiskFactors

----

INDEX

----

INDEX

----

INDEX

Item 1B.      UnresolvedStaff Comments

Item 2.        Properties

Item 3.         LegalProceedings 

Item 4.        Submission ofMatters to a Vote of Security Holders

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INDEX

PARTII

Item 5.        Market for theRegistrant’s Common Equity and Related Stockholder Matters

Item 6.        Selected FinancialData

Item 7.       Management’s Discussionand Analysis of Financial Condition and Results of Operations

Guarantees

----

INDEX

| Due      in Fiscal                                                                                                                                                                                                                                                                                                         |   |                                2008 |   |   |   | 2009-2010 |    |   |   | 2011-2012 |   |   |              After      2012 |   |    |                             Total |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|-----------|---------|--------|--------|-----------|--------|--------|-----------------------------------------------------------------------------------------------|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Senior      borrowings (1)                                                 |   | $                                                                                                                                                                | 6.2    |   |   | $         | 1,522.7 |   |   | $         | -      |   |                                                                                          | $      | -       |                                                                                                                                            |   | $ | 1,528.9 |   |
| Secured      borrowings(1)                                                 |   |                                                                                                                                                             | 44.3   |   |   |      | 339.0   |   |   |      | 547.6  |   |                                                                                          |   | 1,809.3 |                                                                                                                                            |   |   | 2,740.2 |   |
| Operating      leases                                                      |   |                                                                                                                                                             | 1.3    |   |   |      | 2.0     |   |   |      | 1.4    |   |                                                                                          |   | 2.6     |                                                                                                                                            |   |   | 7.3 |   |
| Interest      (2)                                                          |   |                                                                                                                                                             | 228.0  |   |   |      | 395.2   |   |   |      | 224.1  |   |                                                                                          |   | 113.1   |                                                                                                                                            |   |   | 960.4 |   |
| Total                                                                                                                        |   | $                                                                                                                                                                | 279.8  |   |   | $         | 2,258.9 |   |   | $         | 773.1  |   |                                                                                          | $      | 1,925.0 |                                                                                                                                            |   | $ | 5,236.8 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Financing      revenue                                                                                   |   | $      | 325.2  |   |   | $      | 289.4  |   |   | $ | 218.4 |   |
| Operating      lease      revenue                                                                        |   |   | 23.9   |   |   |   | 29.3   |   |   |   | 39.6 |   |
| Securitization      income                                                                               |   |   | 73.2   |   |   |   | 73.3   |   |   |   | 74.5 |   |
| Cost      of      borrowing                                                                              |   |   | 248.2  |   |   |   | 204.9  |   |   |   | 144.3 |   |
| Credit,      collection and administrative expenses                                                                                                                                                                                                                                                                                                                                                                            |   |   | 50.6   |   |   |   | 47.5   |   |   |   | 45.3 |   |
| Provision      for credit      losses                                                                    |   |   | 19.6   |   |   |   | 8.4    |   |   |   | 5.7 |   |
| Depreciation      on operating      leases                                                               |   |   | 18.5   |   |   |   | 22.1   |   |   |   | 29.7 |   |
| Income      before      taxes                                                                            |   |   | 105.4  |   |   |   | 127.2  |   |   |   | 123.4 |   |
| Income      tax      expense                                                                             |   |   | 38.1   |   |   |   | 47.0   |   |   |   | 44.2 |   |
| Net      Income                                                                                          |   |   | 67.3   |   |   |   | 80.2   |   |   |   | 79.2 |   |
| Other      Financial Data:                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Return      on average      equity                                                                       |   |   | 15.5   | %      |   |   | 14.4   | %      |   |   | 16.8 | % |

----

INDEX

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2007   |   |   | 2006   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Retail      Notes and Finance      Leases                                                                          |   | $      | 23.5   |   |   | $      | 14.9 |   |
| Accounts                                                                                                           |   |   | 0.4    |   |   |   | 0.4 |   |
| Total                                                                                                                                                                |   | $      | 23.9   |   |   | $      | 15.3 |   |

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INDEX

Funds Management

----

INDEX

|                                                                                                                                                                                                                                                                   |  Fitch |   |  Standard      and      Poor’s |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|--------|-------------------------------------------|
| Senior      unsecured debt                                                                                                                                                                                                                                             | BB-         |   | BB-                                       |
|                                                                                                                                                                                                                                                                   |        |   |                                      |
| Outlook      as of October 31, 2007                                                                                                                                                                                                                                    | Negative    |   | Negative                                  |
|                                                                                                                                                                                                                                                                   |        |   |                                      |
| In      July 2006, Moody’s withdrew its credit rating for both NIC and      NFC.  Standard & Poor’s removed the credit watch with      negative implications for both NIC and NFC in February 2008 with the      outlook remaining negative. |

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INDEX

|                              | Maturity           |   | 2007   |    |   | 2006   |   |
|-----------------------------------|--------------------|--------|--------|---------|--------|--------|--------|
| Investor      certificate         | July      2008     |   | $      | 200.0   |   |   | $      | 200.0 |   |
| Investor      certificate         | February      2010 |   |   | 212.0   |   |   |   | 212.0 |   |
| Investor      certificate         | May      2007      |   |   | -       |   |   |   | 212.0 |   |
| Variable      funding certificate | November      2008 |   |   | 800.0   |   |   |   | 800.0 |   |
|                              |               |   |   |    |   |   |   |   |   |
|                              | Total              |   | $      | 1,212.0 |   |   | $      | 1,424.0 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2007   |   |   | 2006   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Revolver      bank      loan                                                                                                  |   | $      | 800.0  |   |   | $      | 800.0 |   |
| NFC      revolving loan      utilized                                                                                         |   |   | (419.0 | )      |   |   | (668.0 | ) |
| Mexican      sub-revolver loan      utilized                                                                                  |   |   | (100.0 | )      |   |   | (81.0 | ) |
| Total      availability                                                                                                                                |   | $      | 281.0  |   |   | $      | 51.0 |   |

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INDEX

Critical Accounting Estimates

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INDEX

|  Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |  Judgments      and Uncertainties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Effect      if Actual ResultsDiffer      from Assumptions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  Allowance      for Losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| The      allowance for losses is our estimate of losses incurred in our finance      receivable portfolio. The portfolio consists of retail notes, finance      leases, wholesale notes and accounts. The allowance is established through      a charge to provision for losses. It is evaluated based on a pool method      by type of receivable, primarily using historical and current net loss      experience in conjunction with current portfolio trends in delinquencies      and repossession frequency for each receivable type. Specific allowances      are made for significant impaired receivables.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | We      exercise significant judgment about the timing, frequency and severity of      losses and the impact of general economic conditions and current      delinquency and repossession frequency. We evaluate the adequacy of the      allowance for losses considering several risk factors for each type of      receivable.  For retail notes, finance leases and retail      accounts, the primary risk factors are the general economy, fuel prices,      type of freight being hauled, length of freight movements, number of      competitors our customers have in their lane of service, how extensively      our customers use independent operators and the number and profitability      of owner operators. To the extent that our judgments about these risk      factors and conditions are not accurate, an adjustment to our allowance      for losses may materially impact our results of operations, financial      condition or cash flows.                                                                                                             |   | If      we were to adjust the estimated weighted average loss rate of 0.65% using      the upper and lower limit of estimated weighted average loss percentages      used by the company from 2002 through 2007, the required allowance at      October 31, 2007 would increase from $23.9 million to $24.7 million, and      decrease to $13.7 million, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Amounts      Due from Sales of Receivables (Including      Fair Value Calculations)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Some      of our securitization transactions qualify as sales under SFAS No. 140.      Gains or losses on sales of receivables are credited or charged to      securitization income in the periods in which the sales occur. Amounts due      from sales of receivables, also known as retained interests, which include      interest-only receivables, cash reserve accounts and subordinated      certificates, are recorded at fair value. The accretion of the discount      related to the retained interests is recognized on an effective yield      basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | We      estimate i) the payment speed for the receivables sold, ii) the discount      rate used to determine the present value of future cash flows, and iii)      the anticipated net losses on the receivables to calculate the gain or      loss. The method for calculating the gain or loss aggregates the      receivables into a homogeneous pool. Cash flow estimates are made for each      securitization transaction which are based upon historical and      current experience, anticipated future portfolio performance, market-based      discount rates and other factors.  These assumptions also impact the      estimate of the fair value of the retained interests which is calculated      monthly with changes in fair value included in the consolidated statements      of income.                                                                                                                                                                                                                                                                |   | The      primary assumption used to estimate retained interests in sold receivables      is the discount rate. An immediate adverse change in the discount rate      used to estimate retained interests of 10% as of October 31, 2007, would      result in a decrease in pre-tax income of $2.4 million for the year ended      October 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Net      Investment inOperating      Leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| We      have investments in trucks, tractors and trailers that are leased to      customers under operating lease agreements. These vehicles are depreciated      on a straight-line basis over the term of the lease in an amount necessary      to reduce the leased asset to its estimated residual value at the end of      the lease term.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | The      residual values of the equipment represent estimates of the values of the      assets at the end of the lease contracts and are initially recorded based      on estimates of future market values.  Realization of the      residual values is dependent on our ability to market the vehicles in the      future under the prevailing future conditions. We review residual values      periodically to determine that recorded amounts are appropriate and the      equipment on operating lease assets has not been impaired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Our      estimated residual values impact the timing and amount of depreciation      expense. An adverse change in the aggregate estimated residual value of      equipment under operating leases of 5% as of October 31, 2007 would result      in a cumulative decrease in pre-tax income of $2.7 million over the useful      life of the equipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Pension      and OtherPostretirement      Benefits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| We      provide pension and postretirement benefits to a substantial portion of      our employees. Accounting for these benefits requires the use of our      estimates and assumptions as well as third party actuarial      data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | The      primary assumptions include factors such as discount rates, healthcare      cost trend rates, inflation, expected return on plan assets, retirement      rates, mortality rates and other factors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | As      of October 31, 2007, an increase in the discount rate of 1.0%, assuming      inflation remains unchanged, would result in a decrease of $5.9 million in      the pension obligations and would have no significant impact on the net      periodic benefit cost. A decrease of 1.0% in the discount rate of the      other postretirement benefit plans would result in an increase in other      postretirement obligations of $2.1 million and an increase of $0.1 million      in the net periodic benefit cost.   The calculation of the      expected return on plan assets is described in Note 9, Postretirement      Benefits, to the accompanying consolidated      financial statements. The expected return on assets was 9.0% for      2007, 2006 and 2005. The expected   return  on       assets  is  a  long-term  assumption whose      accuracy  can  only  be measured  over a long       time period based upon past experience.   |
| Income      Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| We      account for income taxes using the asset and liability method. Tax laws      require certain items to be reported in tax filings at different times      than the items are recognized in the consolidated financial statements. A      current liability is recognized for the estimated taxes payable for the      current year. Deferred income taxes represent the future consequences      expected to occur when the reported amounts of assets and liabilities are      recovered or paid. Deferred income taxes are adjusted for enacted changes      in tax laws in the period such changes are enacted. Valuation allowances      are recorded to reduce deferred tax assets when it is more likely than not      that a tax benefit will not be realized. Realization is dependent on      generating sufficient future taxable income. Changes in estimates of      future taxable income could affect future evaluations.  Income      tax expense is computed under a tax sharing agreement between us and our      parent as if we were a separate taxpayer, as are tax payments and      realization of deferred tax assets. Contingent      tax liabilities must be accounted for separately from deferred tax assets      and liabilities; an accrual is recorded when we believe it is probable      that a liability has been incurred for taxes and related interest and      penalties, if any. It must be probable that a contingent tax benefit will      be sustained before the contingent benefit is recognized for financial      reporting. |   | The      ultimate recovery of certain of our deferred tax assets is dependent upon      the amount and timing of future taxable income and other factors such as      the taxing jurisdiction in which the asset is to be      recovered.  A high degree of judgment is required to determine      if and the extent that valuation allowances should be recorded against      deferred tax assets. We have provided valuation allowances at October 31,      2007, and October 31, 2006 aggregating ($1.0) and ($0.8) million,      respectively, for state deferred tax assets based upon our current      assessment of factors described above.        Contingent      tax liabilities are based upon our assessment of the likelihood that we      have incurred a liability. Such liabilities are reviewed based upon recent      updates in tax laws and regulations including recent judicial rulings. As      of October 31, 2007 and 2006, we recorded a contingent tax liability of      $7.9 million and $6.7 million, respectively.  |   | Although      we believe that our approach to estimates and judgments as discussed      herein is reasonable, actual results could differ and we may be      exposed to increases or decreases in income tax expense that could be      material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

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INDEX

New Accounting Pronouncements

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INDEX

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INDEX

| ·   |           Consolidated statements of income for the quarters ended January31, April      30, July 31, and October 31. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| ·   |           Consolidated statements of financial condition as of January 31, April 30,      and July 31. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   |           Consolidated comparison of business results for the quarters ended January      31, April 30, July 31, and October31. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                      |   | For      the Three Months Ended |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|
| Millions      of dollars                                                                                                                                                                                                                                                                                  |   |                            |   |   |   |   |
|                                                                                                                                                                                                                                                                                                      |   |                            |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                      |   | January      31,                |   |   | April      30, |   |
|                                                                                                                                                                                                                                                                                                      |   | 2007                            |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| Revenues                                                                                                                                                                                                                                                                                                  |   |                            |   |   |   |   |   |   |   |   |   |   |
| Retail      notes and finance leases revenue                                                                                                                                                                                                                                                              |   | $                               | 65.6   |   |   | $ | 56.9 |   |   | $ | 65.9 |   |   | $ | 58.9 |   |
| Operating      leases revenue                                                                                                                                                                                                                                                                             |   |                            | 6.1    |   |   |   | 8.0 |   |   |   | 6.2 |   |   |   | 7.6 |   |
| Wholesale      notes interest                                                                                                                                                                                                                                                                             |   |                            | 9.8    |   |   |   | 3.4 |   |   |   | 7.8 |   |   |   | 4.8 |   |
| Retail      and wholesale accounts interest                                                                                                                                                                                                                                                               |   |                            | 6.4    |   |   |   | 5.2 |   |   |   | 9.9 |   |   |   | 6.3 |   |
| Securitization      income                                                                   |   |                            | 28.4   |   |   |   | 14.5 |   |   |   | 14.3 |   |   |   | 15.4 |   |
| Other      revenues                                                                          |   |                            | 7.1    |   |   |   | 5.1 |   |   |   | 9.2 |   |   |   | 7.5 |   |
| Total      revenues                                                                                                                                                                                                                                                                                  |   |                            | 123.4  |   |   |   | 93.1 |   |   |   | 113.3 |   |   |   | 100.5 |   |
|                                                                                                                                                                                                                                                                                                      |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                                                                                                                                                                                                                                                                  |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of borrowing:                                                                                                                                                                                                                                                                                   |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Interest      expense                                          |   |                            | 58.7   |   |   |   | 39.1 |   |   |   | 59.2 |   |   |   | 48.2 |   |
|      Other                                                          |   |                            | 2.2    |   |   |   | 2.0 |   |   |   | 2.5 |   |   |   | 2.7 |   |
| Credit,      collections and administrative                                                                                                                                                                                                                                                               |   |                            | 11.5   |   |   |   | 11.6 |   |   |   | 13.1 |   |   |   | 12.3 |   |
| Provision      for credit losses                                                                                                                                                                                                                                                                          |   |                            | 0.6    |   |   |   | 2.0 |   |   |   | 4.1 |   |   |   | 1.6 |   |
| Depreciation      on operating leases                                                                                                                                                                                                                                                                     |   |                            | 4.9    |   |   |   | 6.1 |   |   |   | 4.6 |   |   |   | 5.9 |   |
| Derivative      expense (income)                                                                                                                                                                                                                                                                          |   |                            | (6.0   | ) |   |   | 0.6 |   |   |   | 6.2 |   |   |   | (1.6 | ) |
| Other      expenses                                                                          |   |                            | (0.3   | ) |   |   | - |   |   |   | 0.2 |   |   |   | 0.2 |   |
| Total      expenses                                                                          |   |                            | 71.6   |   |   |   | 61.4 |   |   |   | 89.9 |   |   |   | 69.3 |   |
|                                                                                                                                                                                                                                                                                                      |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before      taxes                                                                     |   |                            | 51.8   |   |   |   | 31.7 |   |   |   | 23.4 |   |   |   | 31.2 |   |
| Income      tax      expense                                                                 |   |                            | 18.7   |   |   |   | 11.7 |   |   |   | 8.5 |   |   |   | 11.6 |   |
| Net      income                                                                              |   | $                               | 33.1   |   |   | $ | 20.0 |   |   | $ | 14.9 |   |   | $ | 19.6 |   |

----

INDEX

|                                                                                                                                                                                                                                                                                                 |   | For      the Three Months Ended |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|
| Millions      of dollars                                                                                                                                                                                                                                                                             |   |                            |   |   |   |   |
|                                                                                                                                                                                                                                                                                                 |   |                            |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                 |   | July      31,                   |   |   | October      31, |   |
|                                                                                                                                                                                                                                                                                                 |   | 2007                            |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| Revenues                                                                                                                                                                                                                                                                                             |   |                            |   |   |   |   |   |   |   |   |   |   |
| Retail      notes and finance leases revenue                                                                                                                                                                                                                                                         |   | $                               | 66.5   |   |   | $ | 62.6 |   |   | $ | 64.4 |   |   | $ | 64.9 |   |
| Operating      leases revenue                                                                                                                                                                                                                                                                        |   |                            | 5.9    |   |   |   | 7.0 |   |   |   | 5.7 |   |   |   | 6.7 |   |
| Wholesale      notes      interest                                            |   |                            | 6.8    |   |   |   | 6.8 |   |   |   | 3.7 |   |   |   | 8.7 |   |
| Retail      and wholesale accounts interest                                                                                                                                                                                                                                                          |   |                            | 9.9    |   |   |   | 5.7 |   |   |   | 8.5 |   |   |   | 5.1 |   |
| Securitization      income                                                    |   |                            | 19.3   |   |   |   | 23.1 |   |   |   | 11.2 |   |   |   | 20.3 |   |
| Other      revenues                                                           |   |                            | 7.7    |   |   |   | 6.1 |   |   |   | 7.1 |   |   |   | 7.2 |   |
| Total      revenues                                                           |   |                            | 116.1  |   |   |   | 111.3 |   |   |   | 100.6 |   |   |   | 112.9 |   |
|                                                                                                                                                                                                                                                                                                 |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                                                                                                                                                                                                                                                             |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of borrowing:                                                                                                                                                                                                                                                                              |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                                                                  |   |                            | 60.4   |   |   |   | 52.2 |   |   |   | 59.7 |   |   |   | 55.1 |   |
| Other                                                                                                  |   |                            | 2.9    |   |   |   | 2.6 |   |   |   | 2.6 |   |   |   | 3.0 |   |
| Credit,      collections and administrative                                                                                                                                                                                                                                                          |   |                            | 13.5   |   |   |   | 10.3 |   |   |   | 12.5 |   |   |   | 13.3 |   |
| Provision      for credit losses                                                                                                                                                                                                                                                                     |   |                            | 3.6    |   |   |   | 2.1 |   |   |   | 11.3 |   |   |   | 2.7 |   |
| Depreciation      on operating leases                                                                                                                                                                                                                                                           |   |                            | 4.4    |   |   |   | 5.3 |   |   |   | 4.6 |   |   |   | 4.8 |   |
| Derivative      expense (income)                                                                                                                                                                                                                                                                     |   |                            | (1.9   | ) |   |   | (0.7 | ) |   |   | 10.6 |   |   |   | 8.3 |   |
| Other      expenses                                                                     |   |                            | 0.5    |   |   |   | - |   |   |   | 1.8 |   |   |   | 0.9 |   |
| Total      expenses                                                                     |   |                            | 83.4   |   |   |   | 71.8 |   |   |   | 103.1 |   |   |   | 88.1 |   |
|                                                                                                                                                                                                                                                                                                 |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income/(loss) before      taxes                                                                                                                                                                                                                                                                      |   |                            | 32.7   |   |   |   | 39.5 |   |   |   | (2.5 | ) |   |   | 24.8 |   |
| Income      tax expense/(benefit)                                                                                                                                                                                                                                                                    |   |                            | 11.8   |   |   |   | 14.6 |   |   |   | (0.9 | ) |   |   | 9.1 |   |
| Net      income/(loss)                                                                  |   | $                               | 20.9   |   |   | $ | 24.9 |   |   | $ | (1.6 | ) |   | $ | 15.7 |   |

----

INDEX

|                                                                                                                                                                                                                                                                                                              |   | As of            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|
| Millions      of dollars                                                                                                                                                                                                                                                                                          |   |             |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                              |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                              |   | January      31, |   |   | April      30, |   |   | July      31, |   |
|                                                                                                                                                                                                                                                                                                              |   | 2007             |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                                                                                                                                                                                                              |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ASSETS                                                                                                                                                                                                                                                                                                            |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                              |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash      equivalents                                                   |   | $                | 12.9 |   |   | $ | 18.9 |   |   | $ | 24.8 |   |   | $ | 63.6 |   |   | $ | 14.4 |   |   | $ | 60.3 |   |
|                                                                                                                                                                                                                                                                                                              |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Finance      receivables:                                                                                                                                                                                                                                                                                         |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Finance      receivables, net of unearned income                                                                                                                                                                                                                                                                  |   |             | 3,807.5 |   |   |   | 3,491.1 |   |   |   | 3,826.8 |   |   |   | 3,679.9 |   |   |   | 3,582.2 |   |   |   | 3,678.2 |   |
| Finance      receivables from affiliates                                                                                                                                                                                                                                                                          |   |             | 262.4 |   |   |   | 176.7 |   |   |   | 261.8 |   |   |   | 175.9 |   |   |   | 241.3 |   |   |   | 186.7 |   |
| Allowance      for      losses                                                        |   |             | (15.7 | ) |   |   | (14.2 | ) |   |   | (15.5 | ) |   |   | (14.5 | ) |   |   | (15.8 | ) |   |   | (14.7 | ) |
| Finance      receivables,      net                                                    |   |             | 4,054.2 |   |   |   | 3,653.6 |   |   |   | 4,073.1 |   |   |   | 3,841.3 |   |   |   | 3,807.7 |   |   |   | 3,850.2 |   |
|                                                                                                                                                                                                                                                                                                              |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amounts      due from sales of receivables                                                                                                                                                                                                                                                                        |   |             | 352.9 |   |   |   | 343.6 |   |   |   | 352.7 |   |   |   | 652.3 |   |   |   | 290.3 |   |   |   | 473.9 |   |
| Net      accounts due from affiliates                                                                                                                                                                                                                                                                             |   |             | 80.2 |   |   |   | 7.9 |   |   |   | 36.3 |   |   |   | 17.0 |   |   |   | 28.1 |   |   |   | 10.9 |   |
| Net      investment in operating leases                                                                                                                                                                                                                                                                           |   |             | 87.5 |   |   |   | 104.5 |   |   |   | 81.5 |   |   |   | 95.3 |   |   |   | 76.6 |   |   |   | 89.4 |   |
| Vehicle      inventory                                                                |   |             | 9.1 |   |   |   | 9.2 |   |   |   | 15.0 |   |   |   | 8.2 |   |   |   | 15.1 |   |   |   | 8.8 |   |
| Restricted      cash and cash equivalents                                                                                                                                                                                                                                                                    |   |             | 360.4 |   |   |   | 455.4 |   |   |   | 480.0 |   |   |   | 609.0 |   |   |   | 592.5 |   |   |   | 330.7 |   |
| Other      assets                                                                     |   |             | 56.7 |   |   |   | 51.3 |   |   |   | 59.0 |   |   |   | 53.6 |   |   |   | 58.7 |   |   |   | 56.0 |   |
| Total      assets                                                                     |   | $                | 5,013.9 |   |   | $ | 4,644.4 |   |   | $ | 5,122.4 |   |   | $ | 5,340.3 |   |   | $ | 4,883.4 |   |   | $ | 4,880.2 |   |
|                                                                                                                                                                                                                                                                                                              |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES      AND SHAREOWNER’S EQUITY                                                                                                                                                                                                                                                                    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Senior      and secured borrowings                                                                                                                                                                                                                                                                                |   | $                | 4,216.1 |   |   | $ | 3,955.9 |   |   | $ | 4,464.1 |   |   | $ | 4,608.9 |   |   | $ | 4,315.9 |   |   | $ | 4,140.4 |   |
| Other      liabilities                                                                |   |             | 165.4 |   |   |   | 153.7 |   |   |   | 185.9 |   |   |   | 175.0 |   |   |   | 174.2 |   |   |   | 156.5 |   |
| Total      liabilities                                                                |   |             | 4,381.5 |   |   |   | 4,109.6 |   |   |   | 4,650.0 |   |   |   | 4,783.9 |   |   |   | 4,490.1 |   |   |   | 4,296.9 |   |
|                                                                                                                                                                                                                                                                                                              |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareowner’s      equity                                                                                                                                                                                                                                                                                    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital      stock                                                                    |   |             | 1.6 |   |   |   | 1.6 |   |   |   | 1.6 |   |   |   | 1.6 |   |   |   | 1.6 |   |   |   | 1.6 |   |
| Paid-in      capital                                                                  |   |             | 139.6 |   |   |   | 139.6 |   |   |   | 139.6 |   |   |   | 139.6 |   |   |   | 139.6 |   |   |   | 139.6 |   |
| Retained      earnings                                                                |   |             | 492.9 |   |   |   | 399.6 |   |   |   | 332.8 |   |   |   | 419.2 |   |   |   | 253.7 |   |   |   | 444.1 |   |
| Accumulated      other comprehensive loss                                                                                                                                                                                                                                                                         |   |             | (1.7 | ) |   |   | (6.0 | ) |   |   | (1.6 | ) |   |   | (4.0 | ) |   |   | (1.6 | ) |   |   | (2.0 | ) |
| Total      shareowner’s      equity                                             |   |             | 632.4 |   |   |   | 534.8 |   |   |   | 472.4 |   |   |   | 556.4 |   |   |   | 393.3 |   |   |   | 583.3 |   |
| Total liabilities and      shareowner’s equity                                                                                                                                                                                                                                                              |   | $                | 5,013.9 |   |   | $ | 4,644.4 |   |   | $ | 5,122.4 |   |   | $ | 5,340.3 |   |   | $ | 4,883.4 |   |   | $ | 4,880.2 |   |
|                                                                                                                                                                                                                                                                                                              |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

INDEX

----

INDEX

----

INDEX

----

INDEX

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INDEX

Item 7A.       Quantitative andQualitative Disclosures About Market Risk

----

INDEX

Item 8.       Financial Statements andSupplementary Data

| Consolidated Financial      Statements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Page     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| Report      of Independent Registered Public Accounting      Firm                                                                                                                                                                                    | 26       |
|  Consolidated      Statements of IncomeYears      ended October 31, 2007, 2006 and      2005                                                                                                                                                         |  27 |
| Consolidated      Statements of Shareowner’s Equity and Comprehensive IncomeYears      ended October 31, 2007, 2006 and      2005                                                                                                                   |  28 |
| Consolidated      Statements of Financial ConditionAs      of October 31, 2007 and      2006                                                                                                                                                              |  29 |
|  Consolidated      Statements of Cash FlowsYears      ended October 31, 2007, 2006 and      2005                                                                                                                                                     |  30 |
| Notes      to  Consolidated      Financial      Statements                                                                                                                                              | 31       |

----

INDEX

Report of Independent Registered PublicAccounting Firm

----

INDEX

Consolidated Statements of Income

|        Millions      of dollars                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | For      the years endedOctober      31 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2007                                    |   |   | 2006 |   |   | 2005 |   |
| Revenues                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                    |   |   |   |   |   |   |   |
| Retail      notes and finance leases      revenue                                                                                          |   | $                                       | 262.4  |   |   | $ | 243.3 |   |   | $ | 201.0 |   |
| Operating      leases      revenue                                                                                                         |   |                                    | 23.9   |   |   |   | 29.3 |   |   |   | 39.6 |   |
| Wholesale      notes      interest                                                                                                         |   |                                    | 28.1   |   |   |   | 23.7 |   |   |   | 11.9 |   |
| Retail      and wholesale accounts      interest                                                                                           |   |                                    | 34.7   |   |   |   | 22.3 |   |   |   | 5.5 |   |
| Securitization      income                                                                                                                 |   |                                    | 73.2   |   |   |   | 73.3 |   |   |   | 74.5 |   |
| Other      revenues                                                                                                                        |   |                                    | 31.1   |   |   |   | 25.9 |   |   |   | 21.5 |   |
| Total      revenues                                                                                                                                                      |   |                                    | 453.4  |   |   |   | 417.8 |   |   |   | 354.0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Cost      of borrowing:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                                                                                                                          |   |                                    | 238.0  |   |   |   | 194.6 |   |   |   | 133.3 |   |
| Other                                                                                                                                                          |   |                                    | 10.2   |   |   |   | 10.3 |   |   |   | 11.0 |   |
| Credit,      collections and      administrative                                                                                           |   |                                    | 50.6   |   |   |   | 47.5 |   |   |   | 45.3 |   |
| Provision      for credit      losses                                                                                                      |   |                                    | 19.6   |   |   |   | 8.4 |   |   |   | 5.7 |   |
| Depreciation      on operating      leases                                                                                                 |   |                                    | 18.5   |   |   |   | 22.1 |   |   |   | 29.7 |   |
| Derivative      expense      (income)                                                                                                      |   |                                    | 8.9    |   |   |   | 6.6 |   |   |   | (0.3 | ) |
| Other      expenses                                                                                                                        |   |                                    | 2.2    |   |   |   | 1.1 |   |   |   | 5.9 |   |
| Total      expenses                                                                                                                                                      |   |                                    | 348.0  |   |   |   | 290.6 |   |   |   | 230.6 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Income      before      taxes                                                                                                              |   |                                    | 105.4  |   |   |   | 127.2 |   |   |   | 123.4 |   |
| Income      tax      expense                                                                                                               |   |                                    | 38.1   |   |   |   | 47.0 |   |   |   | 44.2 |   |
| Net      income                                                                                                                            |   | $                                       | 67.3   |   |   | $ | 80.2 |   |   | $ | 79.2 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |   |   |   |   |   |

----

INDEX

Consolidated Statements of Shareowner’s Equity and ComprehensiveIncome

| Millions      of dollars                                                                                                                                                                                                                                                                                                   |   | Capital      Stock |   |   | Paid-In      Capital |   |   | RetainedEarnings |   |   | AccumulatedOtherComprehensive      Loss |   |   | Total  |   |   | ComprehensiveIncome |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|----------------------|--------|--------|------------------|--------|--------|-----------------------------------------|--------|--------|--------|--------|--------|---------------------|--------|
|                                                                                                                                                                                                                                                                                                                       |   |               |   |   |                 |   |   |             |   |   |                                    |   |   |   |   |   |                |   |
| Balance      at October 31, 2004                                                                                                                                                                                                                                                   |   | $                  | 1.6    |   |                 | $      | 139.6  |             |   | $      | 300.4                                   |   |   | $      | (9.7   | )      |                | $      | 431.9 |   |   | $ | 73.3 |   |
| 2005      Activity:                                                                                                                                                                                                                                                                                                        |   |               |   |   |                 |   |   |             |   |   |                                    |   |   |   |   |   |                |   |   |   |   |   |   |   |
| Net      income                                                                                |   |               | -      |   |                 |   | -      |             |   |   | 79.2                                    |   |   |   | -      |   |                |   | 79.2 |   |   |   | 79.2 |   |
| Change      in minimum pension liability(net      of tax      $1.0)                                                |   |               | -      |   |                 |   | -      |             |   |   | -                                       |   |   |   | 1.8    |   |                |   | 1.8 |   |   |   | 1.8 |   |
| Balance      at October 31, 2005                                                                                                                                                                                                                                                                                           |   | $                  | 1.6    |   |                 | $      | 139.6  |             |   | $      | 379.6                                   |   |   | $      | (7.9   | )      |                | $      | 512.9 |   |   | $ | 81.0 |   |
| 2006      Activity:                                                                                                                                                                                                                                                                                                        |   |               |   |   |                 |   |   |             |   |   |                                    |   |   |   |   |   |                |   |   |   |   |   |   |   |
| Net      income                                                                                |   |               | -      |   |                 |   | -      |             |   |   | 80.2                                    |   |   |   | -      |   |                |   | 80.2 |   |   |   | 80.2 |   |
| Change      in minimum pension liability(net      of tax      $3.8)                                                |   |               | -      |   |                 |   | -      |             |   |   | -                                       |   |   |   | 6.2    |   |                |   | 6.2 |   |   |   | 6.2 |   |
| Balance      at October 31, 2006                                                                                                                                                                                                                                                                                           |   | $                  | 1.6    |   |                 | $      | 139.6  |             |   | $      | 459.8                                   |   |   | $      | (1.7   | )      |                | $      | 599.3 |   |   | $ | 86.4 |   |
| 2007      Activity:                                                                                                                                                                                                                                                                                                        |   |               |   |   |                 |   |   |             |   |   |                                    |   |   |   |   |   |                |   |   |   |   |   |   |   |
| Net      income                                                                                |   |               | -      |   |                 |   | -      |             |   |   | 67.3                                    |   |   |   | -      |   |                |   | 67.3 |   |   |   | 67.3 |   |
| Change      in minimum pension liability(net      of tax      $0.2)                                                |   |               | -      |   |                 |   | -      |             |   |   | -                                       |   |   |   | 0.3    |   |                |   | 0.3 |   |   |   | 0.3 |   |
| Impact      of  adopting SFAS No. 158(net      of tax      $0.6)                                         |   |               | -      |   |                 |   | -      |             |   |   | -                                       |   |   |   | 1.2    |   |                |   | 1.2 |   |   |   | - |   |
| Cash      dividend paid to parent company                                                                                                                                                                                                                                                                                  |   |               | -      |   |                 |   | -      |             |   |   | (400.0                                  | )      |   |   | -      |   |                |   | (400.0 | ) |   |   | - |   |
| Balance      at October 31, 2007                                                                                                                                                                                                                                                                                           |   | $                  | 1.6    |   |                 | $      | 139.6  |             |   | $      | 127.1                                   |   |   | $      | (0.2   | )      |                | $      | 268.1 |   |   | $ | 67.6 |   |

----

INDEX

Consolidated Statements of FinancialCondition

|        Millions      of dollars                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | As      ofOctober      31 |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 2007                      |       |   | 2006 |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                      |       |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                      |       |   |   |   |
| Cash      and cash      equivalents                                                                                                        |   | $                         |  10.6 |   |   | $ | 25.6 |   |
| Finance      receivables:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                      |       |   |   |   |   |   |
| Finance      receivables, net of unearned      income                                                                                                                              |   |                      | 3,544.5    |   |   |   | 3,788.3 |   |
| Finance      receivables from      affiliates                                                                                                                                      |   |                      | 212.1      |   |   |   | 220.4 |   |
| Allowance      for      losses                                                                                                                                                     |   |                      | (23.9      | ) |   |   | (15.3 | ) |
| Finance      receivables,      net                                                                                                         |   |                      | 3,732.7    |   |   |   | 3,993.4 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                      |       |   |   |   |   |   |
| Amounts      due from sales of      receivables                                                                                            |   |                      | 319.1      |   |   |   | 706.8 |   |
| Net      accounts due from      affiliates                                                                                                 |   |                      | 60.1       |   |   |   | 18.7 |   |
| Net      investment in operating      leases                                                                                               |   |                      | 78.3       |   |   |   | 88.0 |   |
| Vehicle      inventory                                                                                                                     |   |                      | 23.2       |   |   |   | 5.2 |   |
| Restricted      cash and cash      equivalents                                                                                             |   |                      | 370.5      |   |   |   | 651.0 |   |
| Unsecured      loans to      affiliates                                                                                                    |   |                      | 60.0       |   |   |   | - |   |
| Other      assets                                                                                                                          |   |                      | 81.7       |   |   |   | 55.4 |   |
| Total      assets                                                                                                                                                                  |   | $                         | 4,736.2    |   |   | $ | 5,544.1 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                      |       |   |   |   |   |   |
| LIABILITIES      AND SHAREOWNER’S EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                      |       |   |   |   |   |   |
| Senior      and secured      borrowings                                                                                                    |   | $                         | 4,269.1    |   |   | $ | 4,775.7 |   |
| Other      liabilities                                                                                                                     |   |                      | 199.0      |   |   |   | 169.1 |   |
| Total      liabilities                                                                                                                                                             |   |                      | 4,468.1    |   |   |   | 4,944.8 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                      |       |   |   |   |   |   |
| Shareowner’s      equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                      |       |   |   |   |   |   |
| Capital      stock ($1 par value, 2,000,000 shares authorized, 1,600,000      sharesissued      and outstanding)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                      | 1.6        |   |   |   | 1.6 |   |
| Paid-in      capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                      | 139.6      |   |   |   | 139.6 |   |
| Retained      earnings                                                                                                                     |   |                      | 127.1      |   |   |   | 459.8 |   |
| Accumulated      other comprehensive      loss                                                                                             |   |                      | (0.2       | ) |   |   | (1.7 | ) |
| Total      shareowner’s      equity                                                                                                  |   |                      | 268.1      |   |   |   | 599.3 |   |
| Total      liabilities and shareowner’s      equity                                                                                                                          |   | $                         | 4,736.2    |   |   | $ | 5,544.1 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                      |       |   |   |   |   |   |

----

INDEX

| Navistar      Financial Corporation and SubsidiariesConsolidated Statements of      Cash Flows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|        Millions      of dollars                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | For      the years endedOctober      31 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Cash      flow from operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                                                                                         |   | $ | 67.3 |   |   | $ | 80.2 |   |   | $ | 79.2 |   |
| Adjustments      to reconcile net income to cash flow from operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss on sales of finance      receivables                                                                                                                                                    |   |   | 9.3 |   |   |   | 7.0 |   |   |   | 2.1 |   |
| Net      loss on sale of      equipment                                                                                                                                                               |   |   | 1.5 |   |   |   | 1.3 |   |   |   | 0.8 |   |
| Depreciation      and      amortization                                                                                                                                                               |   |   | 25.2 |   |   |   | 29.1 |   |   |   | 39.1 |   |
| Provision      for credit      losses                                                                                                                                                                 |   |   | 19.6 |   |   |   | 8.4 |   |   |   | 5.7 |   |
| Net      change in amounts due from sales of receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 387.7 |   |   |   | (265.6 | ) |   |   | (30.5 | ) |
| Net      change in finance receivables - wholesale notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 140.4 |   |   |   | (28.5 | ) |   |   | 29.7 |   |
| Net      change in finance receivables from affiliates - wholesale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 37.7 |   |   |   | (147.9 | ) |   |   | 26.5 |   |
| Net      change in accounts payable to (due from) affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | (41.4 | ) |   |   | 11.0 |   |   |   | (98.0 | ) |
| Net      change in other assets and      liabilities                                                                                                                                                  |   |   | 7.8 |   |   |   | 27.9 |   |   |   | 7.0 |   |
| Net      cash provided by (used in) operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 655.1 |   |   |   | (277.1 | ) |   |   | 61.6 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flow from investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Originations      of retail notes and finance leases, includes affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | (1,185.6 | ) |   |   | (1,587.0 | ) |   |   | (1,592.6 | ) |
| Net      change in restricted cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 280.5 |   |   |   | (107.2 | ) |   |   | (269.2 | ) |
| Collections      on retail notes and finance lease receivables,net      of change in unearned finance income, includes affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 1,305.7 |   |   |   | 1,226.9 |   |   |   | 1,068.3 |   |
| Net      change in finance receivables from affiliates - accounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | (10.4 | ) |   |   | (3.4 | ) |   |   | (2.1 | ) |
| Net      change in finance receivables -      accounts                                                                                                                  |   |   | (105.6 | ) |   |   | (87.6 | ) |   |   | 20.3 |   |
| Proceeds      from sale of repossessed      assets                                                                                                                      |   |   | 30.1 |   |   |   | 30.8 |   |   |   | 70.8 |   |
| Purchase      of equipment leased to      others                                                                                                                        |   |   | (24.3 | ) |   |   | (49.7 | ) |   |   | (31.0 | ) |
| Proceeds      from sale of      equipment                                                                                                                               |   |   | 15.5 |   |   |   | 45.3 |   |   |   | 47.6 |   |
| Loans      to      affiliates                                                                                                                                           |   |   | (110.0 | ) |   |   | - |   |   |   | - |   |
| Loan      repayment from      affiliates                                                                                                                                |   |   | 50.0 |   |   |   | - |   |   |   | - |   |
| Net      cash provided by (used in) investing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 245.9 |   |   |   | (531.9 | ) |   |   | (687.9 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flow from financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      change in bank-revolving credit facility, net of issuance      costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | (253.7 | ) |   |   | 507.0 |   |   |   | (117.8 | ) |
| Proceeds      from issuance of senior debt, net of issuance costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 217.2 |   |   |   | - |   |   |   | 497.1 |   |
| Principal      payments on senior      debt                                                                                                                             |   |   | (5.1 | ) |   |   | (4.0 | ) |   |   | (501.0 | ) |
| Proceeds      from issuance of securitized debt, net of issuance costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 887.0 |   |   |   | 1,632.1 |   |   |   | 1,949.6 |   |
| Payments      on securitized      debt                                                                                                                                  |   |   | (1,361.4 | ) |   |   | (1,323.5 | ) |   |   | (1,201.4 | ) |
| Dividends      paid to parent      company                                                                                                                              |   |   | (400.0 | ) |   |   | - |   |   |   | - |   |
| Net      cash (used in) provided by financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | (916.0 | ) |   |   | 811.6 |   |   |   | 626.5 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change      in cash and cash      equivalents                                                                                                  |   |   | (15.0 | ) |   |   | 2.6 |   |   |   | 0.2 |   |
| Cash      and cash equivalents, beginning of      year                                                                                         |   |   | 25.6 |   |   |   | 23.0 |   |   |   | 22.8 |   |
| Cash      and cash equivalents, end of      year                                                                                               |   | $ | 10.6 |   |   | $ | 25.6 |   |   | $ | 23.0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental      cash flow information:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      paid                                                                                                                                                      |   | $ | 237.5 |   |   | $ | 191.1 |   |   | $ | 130.8 |   |
| Income      taxes paid, net of      refunds                                                                                                                             |   |   | 32.4 |   |   |   | 33.1 |   |   |   | 34.3 |   |
| Transfers      of loans and leases to vehicle      inventory                                                                                                            |   |   | 49.6 |   |   |   | 28.9 |   |   |   | 52.6 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | 2007   |   |   | 2006   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Finance      receivables from affiliates net of unearned income and dealer reserve      (Dealcor retail)                                                                                                                                                                                                                                                                                                                                                                                         |   | $      | 177.7  |   |   | $      | 158.7 |   |
| Finance      receivables from affiliates (Dealcor wholesale)                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 34.4   |   |   |   | 61.7 |   |
| Net      accounts due from      affiliates                                                                          |   |   | 60.1   |   |   |   | 18.7 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2007   |    |   | 2006   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Retail      notes, net of unearned      income                                                                                                                                |   | $      | 3,012.3 |   |   | $      | 3,208.7 |   |
| Finance      leases, net of unearned      income                                                                                                                              |   |   | 157.2   |   |   |   | 169.8 |   |
| Wholesale      notes held for      sale                                                                                                                                       |   |   | 105.6   |   |   |   | 246.0 |   |
| Accounts      (includes retail and      wholesale)                                                                                                                            |   |   | 269.4   |   |   |   | 163.8 |   |
| Finance      receivables from affiliates, net of unearned      income                                                                                                         |   |   | 212.1   |   |   |   | 220.4 |   |
| Total      finance      receivables                                                                                                                                           |   |   | 3,756.6 |   |   |   | 4,008.7 |   |
| Allowance      for      losses                                                                                                                                                |   |   | (23.9   | )      |   |   | (15.3 | ) |
| Total      finance receivables,      net                                                                                                                                      |   | $      | 3,732.7 |   |   | $      | 3,993.4 |   |

----

INDEX

|                                                                                                                                                                                                                                                                                                                    |   | Retail      notes |    |   | Finance      leases |   |   | Wholesale      notes |   |   | Accounts |   |   | Affiliates |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|---------------------|--------|--------|----------------------|--------|--------|----------|--------|--------|------------|--------|
| Due      in fiscal year:                                                                                                                                                                                                                                                                                                |   |              |    |   |                |   |   |                 |   |   |     |   |   |       |   |
| 2008                                                                    |   | $                 | 1,060.4 |   |                | $      | 12.2   |                 |   | $      | 105.6    |   |   | $          | 269.4  |   |   | $ | 76.6 |   |
| 2009                                                                    |   |              | 903.5   |   |                |   | 27.3   |                 |   |   | -        |   |   |       | -      |   |   |   | 41.9 |   |
| 2010                                                                    |   |              | 683.8   |   |                |   | 42.5   |                 |   |   | -        |   |   |       | -      |   |   |   | 37.4 |   |
| 2011                                                                    |   |              | 428.8   |   |                |   | 49.7   |                 |   |   | -        |   |   |       | -      |   |   |   | 33.4 |   |
| 2012                                                                    |   |              | 207.8   |   |                |   | 41.0   |                 |   |   | -        |   |   |       | -      |   |   |   | 16.5 |   |
| Thereafter                                                              |   |              | 60.4    |   |                |   | 6.9    |                 |   |   | -        |   |   |       | -      |   |   |   | 7.2 |   |
| Gross      finance      receivables                                               |   |              | 3,344.7 |   |                |   | 179.6  |                 |   |   | 105.6    |   |   |       | 269.4  |   |   |   | 213.0 |   |
| Unearned      finance      income                                                 |   |              | (332.4  | )      |                |   | (22.4  | )                    |   |   | -        |   |   |       | -      |   |   |   | (0.9 | ) |
| Finance      receivables, net of unearned income                                                                                                                                                                                                                                                                   |   | $                 | 3,012.3 |   |                | $      | 157.2  |                 |   | $      | 105.6    |   |   | $          | 269.4  |   |   | $ | 212.1 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Allowance      for losses, beginning of      year                                                                          |   | $      | 15.3   |   |   | $      | 13.6   |   |   | $ | 13.6 |   |
| Provision      for credit      losses                                                                                      |   |   | 19.6   |   |   |   | 8.4    |   |   |   | 5.7 |   |
| Charge-offs                                                                                                                |   |   | (11.0  | )      |   |   | (6.7   | )      |   |   | (5.7 | ) |
| Allowance      for losses, end of      year                                                                                                                                  |   | $      | 23.9   |   |   | $      | 15.3   |   |   | $ | 13.6 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Impaired      receivables with specific loss reserves                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $      | 28.3   |   |   | $      | 17.6   |   |   | $ | 1.3 |   |
| Impaired      receivables without specific loss reserves                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 0.9    |   |   |   | -      |   |   |   | - |   |
| Impaired      receivables guaranteed by Navistar, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 8.9    |   |   |   | 12.6   |   |   |   | 1.3 |   |
| Total      impaired      receivables                                                                          |   | $      | 38.1   |   |   | $      | 30.2   |   |   | $ | 2.6 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Specific      loss reserves on impaired receivables                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $      | 3.1    |   |   | $      | 1.1    |   |   | $ | 0.3 |   |
| Average      balance of impaired finance receivables                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 27.5   |   |   |   | 5.8    |   |   |   | 7.7 |   |
| Balances      with payments past due over 90 days                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | 3.0    |   |   |   | 2.4    |   |   |   | 3.2 |   |

----

INDEX

|                                                                                                                                                                                                                                                                                                                                                                                     |   | 2007   |   |   | 2006   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Vehicle      inventory, beginning of year                                                                                                                                                                                                                                                                                                                                                |   | $      | 5.2    |   |   | $      | 8.4 |   |
| Net      additions                                                                                                                                                                                                                                                                                                                                                                       |   |   | 49.6   |   |   |   | 28.9 |   |
| Net      book value of repossessed assets sold                                                                                                                                                                                                                                                                                                                                           |   |   | (31.6  | )      |   |   | (32.1 | ) |
| Vehicle      inventory, end of      year                                                         |   | $      | 23.2   |   |   | $      | 5.2 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2007   |   |   | 2006   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Investment      in operating      leases                                                                              |   | $      | 124.2  |   |   | $      | 145.6 |   |
| Less:      Accumulated      depreciation                                                                              |   |   | (46.3  | )      |   |   | (58.0 | ) |
|          Net      investment in equipment under operating leases                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 77.9   |   |   |   | 87.6 |   |
| Rent      receivable net of reserve for past due operating leases                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 0.4    |   |   |   | 0.4 |   |
| Net      investment in operating      leases                                                                          |   | $      | 78.3   |   |   | $      | 88.0 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Federal                                                                                                                                   |   | $      | 43.2   |   |   | $      | 49.8   |   |   | $ | 47.1 |   |
| State      and      local                                                                                                                 |   |   | 3.0    |   |   |   | 4.0    |   |   |   | 2.7 |   |
|      Total      current                                                                                          |   |   | 46.2   |   |   |   | 53.8   |   |   |   | 49.8 |   |
| Deferred      (primarily      federal)                                                                                                    |   |   | (8.1   | )      |   |   | (6.8   | )      |   |   | (5.6 | ) |
|      Total      income tax      expense                                                                          |   | $      | 38.1   |   |   | $      | 47.0   |   |   | $ | 44.2 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Statutory      federal income tax      rate                                                                          |   |   | 35.0   | %      |   |   | 35.0   | %      |   |   | 35.0 | % |
| State      income taxes net of federal income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 1.3    |   |   |   | 2.1    |   |   |   | 1.0 |   |
| Other                                                                                                                |   |   | (0.1   | )      |   |   | (0.1   | )      |   |   | (0.2 | ) |
| Effective      income tax      rate                                                                                                                                    |   |   | 36.2   | %      |   |   | 37.0   | %      |   |   | 35.8 | % |

----

INDEX

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 2007   |   |   | 2006   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Deferred      tax assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |
| Pension      and other postretirement      benefits                                                                                                              |   | $      | 5.5    |   |   | $      | 6.1 |   |
| Allowance      for      losses                                                                                                                                   |   |   | 8.9    |   |   |   | 5.6 |   |
| Secured      borrowings                                                                                                                                          |   |   | 48.2   |   |   |   | 45.6 |   |
| Other                                                                                                                                                            |   |   | 13.0   |   |   |   | 8.3 |   |
| Less      valuation      allowance                                                                                                                               |   |   | (1.0   | )      |   |   | (0.8 | ) |
| Total      deferred tax      assets                                                                                                                                        |   |   | 74.6   |   |   |   | 64.8 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |
| Deferred      tax liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Lease      transactions                                                                                                                                          |   |   | (25.8  | )      |   |   | (19.0 | ) |
| Equipment      under operating      lease                                                                                                                        |   |   | (24.7  | )      |   |   | (28.9 | ) |
| Total      deferred tax      liabilities                                                                                                                                   |   |   | (50.5  | )      |   |   | (47.9 | ) |
| Net      deferred tax      assets                                                                                                                                                                                                                                         |   | $      | 24.1   |   |   | $      | 16.9 |   |

----

INDEX

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |    |   |   |   |    | Weighted      Average Interest Rate |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|-------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 2007   |    |   | 2006   |   |    | 2007                                |   |   | 2006 |   |
| Bank      credit facility at variable rates due July 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $      | 1,028.9 |   |   | $      | 1,063.0 |                                |   |   | 6.8 | % |   |   | 7.0 | % |
| Revolving      retail warehouse facility at variable rates due June 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 500.0   |   |   |   | 500.0   |                                |   |   | 5.4 | % |   |   | 5.6 | % |
| Borrowings      secured by asset-backed securities at various rates, currently      between                 2.5% to 5.7% due serially through 2014                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 2,607.7 |   |   |   | 3,096.5 |                                |   |   | 4.8 | % |   |   | 4.4 | % |
| Borrowings      secured by operating and finance leases at rates currently between                 3.4%      to 6.6% due serially through June 2011                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 132.5   |   |   |   | 116.2   |                                |   |   | 5.2 | % |   |   | 4.9 | % |
|                 Total senior and secured      borrowings                                                                                |   | $      | 4,269.1 |   |   | $      | 4,775.7 |                                |   |   | 5.4 | % |   |   | 5.1 | % |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2007   |   |   | 2006   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Revolver      bank      loan                                                                                           |   | $      | 800.0  |   |   | $      | 800.0 |   |
| NFC      revolving loan      utilized                                                                                  |   |   | (419.0 | )      |   |   | (668.0 | ) |
| Mexican      sub-revolver loan utilized                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | (100.0 | )      |   |   | (81.0 | ) |
| Total      availability                                                                                                                         |   | $      | 281.0  |   |   | $      | 51.0 |   |

----

INDEX

----

INDEX

| 2008                                                         |   | $      | 50.5    |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
| 2009                                                         |   |   | 69.6    |   |
| 2010                                                         |   |   | 1,792.1 |   |
| 2011                                                                                                                                                                                                                                                                                                                                                 |   |   | 116.0   |   |
| 2012                                                                                                                                                                                                                                                                                                                                                 |   |   | 431.6   |   |
| Thereafter                                                                                                                                                                                                                                                                                                                                           |   |   | 1,809.3 |   |
| Total                                                                                                          |   | $      | 4,269.1 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Prior      to Applicationof      SFAS No. 158 |    |   | Adjustments |   |   | After      Applicationof      SFAS No. 158 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|---------|--------|-------------|--------|--------|--------------------------------------------|--------|
| Total      assets                                                                                                           |   | $                                             | 4,736.2 |   |        | $      | -      |                                       |   | $ | 4,736.2 |   |
| Other      liabilities                                                                                                      |   |                                          | 200.2   |   |        |   | ( 1.2  | )                                          |   |   | 199.0 |   |
| Total      liabilities                                                                                                      |   |                                          | 4,469.3 |   |        |   | (1.2   | )                                          |   |   | 4,468.1 |   |
| Accumulated      other comprehensive      loss                                                                              |   |                                          | (1.4    | )      |        |   | 1.2    |                                       |   |   | (0.2 | ) |
| Total      shareowner’s      equity                                                                                   |   |                                          | 266.9   |   |        |   | 1.2    |                                       |   |   | 268.1 |   |
| Total      liabilities and shareowner’s      equity                                                                   |   | $                                             | 4,736.2 |   |        | $      | -      |                                       |   | $ | 4,736.2 |   |

|                                                                                                                                                                                                                                                                                                                                                         |   | Pension      Benefits |   |   | Other      Benefits |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|--------|--------|---------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                         |   | 2007                  |   |   | 2006                |   |   | 2005 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Service      cost for benefits earned during               the      period                                        |   | $                     | 0.3    |   |                | $      | 0.4 |   |   | $ | 0.4 |   |   | $ | 0.1 |   |   | $ | 0.2 |   |   | $ | 0.2 |   |
| Interest      on      obligation                                                                                                      |   |                  | 3.9    |   |                |   | 3.9 |   |   |   | 3.9 |   |   |   | 1.2 |   |   |   | 1.4 |   |   |   | 1.4 |   |
| Amortization      of cumulative losses                                                                                                                                                                                                                                                                                                                       |   |                  | 0.5    |   |                |   | 0.7 |   |   |   | 1.5 |   |   |   | - |   |   |   | 0.4 |   |   |   | 0.6 |   |
| Less      expected return on assets                                                                                                                                                                                                                                                                                                                          |   |                  | (5.3   | )      |                |   | (5.0 | ) |   |   | (4.8 | ) |   |   | (0.7 | ) |   |   | (0.7 | ) |   |   | (0.7 | ) |
| Net      postretirement benefits expense (income):                                                                                                                                                                                                                                                                                                           |   | $                     | (0.6   | )      |                | $      | - |   |   | $ | 1.0 |   |   | $ | 0.6 |   |   | $ | 1.3 |   |   | $ | 1.5 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Pension      Benefits |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|--------|
|  Amortization      of actuarial      loss                                                                                  |   | $                     | 0.2    |   |

----

INDEX

|                                                                                                                                                                                                                                                                                                                                                                                             |   | Pension      Benefits |   |   | Other      Benefits |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|--------|--------|---------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                             |   | 2007                  |   |   | 2006                |   |   | 2007 |   |   | 2006 |   |
| Change in benefit      obligation                                                                                                                                                                                                                                                                                                                                                                |   |                  |   |   |                |   |   |   |   |   |   |   |
| Benefit      obligation at beginning of year                                                                                                                                                                                                                                                                                                                                                     |   | $                     | 70.0   |   |                | $      | 70.9 |   |   | $ | 26.0 |   |   | $ | 25.8 |   |
| Service      cost                                                                                        |   |                  | 0.3    |   |                |   | 0.4 |   |   |   | 0.1 |   |   |   | 0.2 |   |
| Interest      on      obligation                                                                         |   |                  | 3.9    |   |                |   | 3.9 |   |   |   | 1.2 |   |   |   | 1.4 |   |
| Actuarial      net (gain)      loss                                                                      |   |                  | (4.4   | )      |                |   | (1.1 | ) |   |   | (6.0 | ) |   |   | 0.3 |   |
| Plan      participants’      contributions                                                         |   |                  | -      |   |                |   | - |   |   |   | 0.3 |   |   |   | - |   |
| Benefits      paid                                                                                       |   |                  | (4.3   | )      |                |   | (4.1 | ) |   |   | (1.2 | ) |   |   | (1.7 | ) |
| Benefit      obligation at end of      year                                                              |   | $                     | 65.5   |   |                | $      | 70.0 |   |   | $ | 20.4 |   |   | $ | 26.0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |                  |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Change in plan      assets                                                                                                                                                                                                                                                                                                                                                                       |   |                  |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets at beginning of year                                                                                                                                                                                                                                                                                                                                              |   | $                     | 60.7   |   |                | $      | 57.0 |   |   | $ | 8.0 |   |   | $ | 7.9 |   |
| Actual      return on plan      assets                                                                   |   |                  | 11.2   |   |                |   | 7.3 |   |   |   | 2.0 |   |   |   | 1.0 |   |
| Employer      contributions                                                                              |   |                  | 0.5    |   |                |   | - |   |   |   | 0.1 |   |   |   | - |   |
| Benefits      paid                                                                                       |   |                  | (4.3   | )      |                |   | (3.6 | ) |   |   | (0.6 | ) |   |   | (0.9 | ) |
| Fair      value of plan assets at end of year                                                                                                                                                                                                                                                                                                                                                    |   | $                     | 68.1   |   |                | $      | 60.7 |   |   | $ | 9.5 |   |   | $ | 8.0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |                  |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Funded      (unfunded)      status                                                                       |   | $                     | 2.6    |   |                | $      | (9.3 | ) |   | $ | (10.9 | ) |   | $ | (18.0 | ) |
| Unrecognized      actuarial net      loss                                                                |   |                  | -      |   |                |   | 12.4 |   |   |   | - |   |   |   | 6.1 |   |
| Net      amount      recognized                                                                          |   | $                     | 2.6    |   |                | $      | 3.1 |   |   | $ | (10.9 | ) |   | $ | (11.9 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |                  |   |   |                |   |   |   |   |   |   |   |   |   |   |   |

| Amounts recognized in the consolidated      statements       of financial      condition consist of:                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Other      assets                                                                       |   | $      | 9.1    |   |   | $      | 7.0    |   |   | $      | -      |   |   | $ | - |   |
| Other      liabilities                                                                  |   |   | (6.5   | )      |   |   | (6.6   | )      |   |   | (10.9  | )      |   |   | (11.9 | ) |
| Accumulated      other comprehensive loss                                                                                                                                                                                                                                                                                                                                       |   |   | -      |   |   |   | 2.7    |   |   |   | -      |   |   |   | - |   |
| Net      amount      recognized                                                         |   | $      | 2.6    |   |   | $      | 3.1    |   |   | $      | (10.9  | )      |   | $ | (11.9 | ) |

| Amounts      recognized in our accumulatedother comprehensive      loss (pretax) consist of:                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Additional      minimum      liability                                                         |   | $      | -      |   |   | $      | 2.7    |   |   | $      | -      |   |   | $ | - |   |
| Net      actuarial loss      (gain)                                                            |   |   | 1.6    |   |   |   | -      |   |   |   | (1.2   | )      |   |   | - |   |
| Net      amount      recognized                                                                |   | $      | 1.6    |   |   | $      | 2.7    |   |   | $      | (1.2   | )      |   | $ | - |   |

----

INDEX

|                                                                                               |   | Pension      Benefits |   | Other      Benefits |
|----------------------------------------------------------------------------------------------------|--------|-----------------------|--------|---------------------|
|                                                                                               |   | 2007                  |   | 2006                |   | 2007 |   | 2006 |
|  Discount      rate used to determine present value of benefit obligation at end of      year |   |  6.1%            |   | 5.7%                |   | 6.1% |   | 5.7% |
|  Expected      rate of increase in future compensation levels                                 |   | 3.5%                  |   | 3.5%                |   | N/A |   |  N/A |

|                                                                                                                                                                                                                                                                                                       |   | Pension      Benefits |   | Other      Benefits |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|--------|---------------------|
|                                                                                                                                                                                                                                                                                                       |   |  2007            |   |  2006          |   |  2005 |   |  2007 |   |  2006 |   |  2005 |
|  Discount      rate                                                                                                                                                                                                                                                                                   |   |  5.7%            |   |  5.6%          |   |  5.5% |   |  5.7% |   |  5.7% |   |  5.4% |
| Expected      long-term rate of return onplan      assets                                                                                                                                                                                                                                                  |   | 9.0%                  |   | 9.0%                |   | 9.0% |   | 9.0% |   | 9.0% |   | 9.0% |
| Expected      rate of increase in futurecompensation      levels                                        |   | 3.5%                  |   | 3.5%                |   | 3.5% |   | N/A |   | N/A |   | N/A |

|                                                                                                                                                                                                                                                       |   | Pension      Benefits |   |   | Other      Benefits |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|--------|--------|---------------------|--------|
|  Asset      Category                                                                                                                                                                                                                                  |   | Target      Range     |   |   | 2007                |   |   | 2006 |   |   | Target      Range |   |   | 2007 |   |   | 2006 |   |
| Equity      securities                                       |   |                  |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NIC      common      stock                                                  |   |                  |   |   |                | -      |   |   |   | - |   |   |   |   |   |   | 13 | % |   |   | 7 | % |
| Other      equity securities                                                                                                                                                                                                                               |   |                  |   |   |                | 77     | % |   |   | 77 | % |   |   |   |   |   | 60 | % |   |   | 64 | % |
| Hedge      funds                                                            |   |                  |   |   |                | -      |   |   |   | - |   |   |   |   |   |   | 11 | % |   |   | 11 | % |
| Total      equity securities                                                                                                                                                                                                                               |   |                  | 60-80  | %      |                |   | 77 | % |   |   | 77 | % |   |   | 75-85 | % |   |   | 84 | % |   |   | 82 | % |
|                                                                                                                                                                                                                                                       |   |                  |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt      securities                                                        |   |                  |   |   |                |   | 23 | % |   |   | 23 | % |   |   |   |   |   |   | 14 | % |   |   | 14 | % |
| Other,      including cash                                                                                                                                                                                                                                 |   |                  |   |   |                |   | - |   |   |   | - |   |   |   |   |   |   |   | 2 | % |   |   | 4 | % |
| Total      debt securities andOther                                                        |   |                  | 20-40  | %      |                |   | 23 | % |   |   | 23 | % |   |   | 15-25 | % |   |   | 16 | % |   |   | 18 | % |
|                                                                                                                                                                                                                                                       |   |                  |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

INDEX

|                                                                                                                                                                                                                                                                                                                                                                                       |   | One-PercentagePoint      Increase |   |   | One-PercentagePoint      Decrease |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|-----------------------------------|--------|
|  Effect      on total of service and interest cost  components                                                    |   | $                                 | 0.2    |   |                              | $      | (0.1 | ) |
|  Effect      on postretirement benefit obligation                                                                                                                                                                                                                                                                                                                                     |   |                              | 2.1    |   |                              |   | (1.8 | ) |

|                                                                                                                                                                                                                                          |   | PensionBenefit      Payments |   |   | Other      PostretirementBenefit      Payments |   |   | PostretirementBenefit      Subsidy Receipts |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|--------|------------------------------------------------|--------|--------|---------------------------------------------|--------|
| 2008                                                                          |   | $                            | 4.7    |   |                                           | $      | 1.5    |                                        |   | $ | 0.2 |   |
| 2009                                                                          |   |                         | 4.8    |   |                                           |   | 1.6    |                                        |   |   | 0.2 |   |
| 2010                                                                          |   |                         | 4.9    |   |                                           |   | 1.7    |                                        |   |   | 0.2 |   |
| 2011                                                                          |   |                         | 5.0    |   |                                           |   | 1.8    |                                        |   |   | 0.2 |   |
| 2012                                                                          |   |                         | 5.5    |   |                                           |   | 1.8    |                                        |   |   | 0.3 |   |
| 2013      through      2017                                    |   |                         | 25.5   |   |                                           |   | 9.5    |                                        |   |   | 1.5 |   |

----

INDEX

| Year      Ended October 31                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| 2008                                                                                       |   | $      | 1.3    |   |
| 2009                                                                                       |   |   | 1.1    |   |
| 2010                                                                                       |   |   | 0.9    |   |
| 2011                                                                                       |   |   | 0.7    |   |
| 2012                                                                                       |   |   | 0.7    |   |
| 2013      and      beyond                                                                  |   |   | 2.6    |   |
| Total                                                                                                                    |   | $      | 7.3    |   |

| Type      of Funding           |   |  Maturity |   | Maximum      Amountof      Guaranty |                    |   | OutstandingBalance |   |
|--------------------------------|--------|----------------|--------|-------------------------------------|-------------------------|--------|--------------------|--------|
| Revolving      credit facility |   |           | (1     | )                                   | August      2013        |   | $                  | 16.4   |   |   | $ | 16.4 |   |
| Revolving      credit facility |   |           | (1     | )                                   | October  2008 |   |               | 9.3    |   |   |   | 9.3 |   |
| Revolving      credit facility |   |           | (1     | )                                   | October  2010 |   |               | 18.7   |   |   |   | 15.3 |   |
| Revolving      credit facility |   |           | (1     | )                                   | December      2010      |   |               | 22.4   |   |   |   | 2.5 |   |
| Revolving      credit facility |   |           | (1     | )                                   | December      2010      |   |               | 18.7   |   |   |   | 3.6 |   |
| Revolving      credit facility |   |           | (1     | )                                   | September      2012     |   |               | 33.6   |   |   |   | 10.9 |   |
| Revolving      credit facility |   |           | (1     | )                                   | October  2010 |   |               | 9.3    |   |   |   | 9.3 |   |
| Revolving      credit facility |   |           | (1     | )                                   | March  2009   |   |               | 25.0   |   |   |   | 23.1 |   |
| Revolving      credit facility |   |           | (1     | )                                   | October      2009       |   |               | 25.7   |   |   |   | 25.6 |   |
| Revolving      credit facility |   |           | (2     | )                                   | July      2010          |   |               | 100.0  |   |   |   | 100.0 |   |
|                           |   |           |   |                                | Total                   |   | $                  | 279.1  |   |   | $ | 216.0 |   |

----

INDEX

| Instrument                   | Maturity           |   | OutstandingNotional |   |   | FairValue |   |
|------------------------------|--------------------|--------|---------------------|--------|--------|-----------|--------|
| Interest      rate swaps (1) | December      2010 |   | $                   | 73.9   |   |      | $      | (0.1 | ) |
| Interest      rate swaps (2) | December      2010 |   |                | 0.7    |   |      |   | - |   |

----

INDEX

| Inception           | Maturity           | Instrument                       |   | Notional |   |   | Fair      Value |   |
|---------------------|--------------------|----------------------------------|--------|----------|--------|--------|-----------------|--------|
| February      2006  | May      2013      | Interest      rate swap          |   | $        | 427.4  |   |            | $      | (3.0 | ) |
| February      2006  | May      2013      | Interest      rate swap          |   |     | 427.4  |   |            |   | 3.0 |   |
| February      2006  | May      2013      | Interest      rate swap          |   |     | 365.4  |   |            |   | (1.9 | ) |
| September      2006 | May      2010      | Interest      rate swap          |   |     | 276.7  |   |            |   | (2.5 | ) |
| September      2006 | January      2014  | Interest      rate swap          |   |     | 274.6  |   |            |   | (2.8 | ) |
| September      2006 | January      2014  | Interest      rate swap          |   |     | 274.6  |   |            |   | 2.8 |   |
| October      2006   | October      2013  | Interest      rate swap          |   |     | 249.8  |   |            |   | (2.8 | ) |
| October      2006   | October      2013  | Interest      rate swap          |   |     | 249.8  |   |            |   | 2.8 |   |
| October      2006   | May      2010      | Interest      rate swap          |   |     | 267.0  |   |            |   | (2.3 | ) |
| June      2005      | June      2016     | Interest      rate cap purchased |   |     | 500.0  |   |            |   | (2.1 | ) |
| June      2005      | June      2016     | Interest      rate cap sold      |   |     | 500.0  |   |            |   | 2.1 |   |
| February      2007  | January      2011  | Interest      rate swap          |   |     | 350.4  |   |            |   | (3.9 | ) |
| February      2007  | February      2014 | Interest      rate swap          |   |     | 346.2  |   |            |   | 3.8 |   |
| February      2007  | February      2014 | Interest      rate swap          |   |     | 346.2  |   |            |   | (3.8 | ) |
| June      2007      | February      2011 | Interest      rate swap          |   |     | 353.8  |   |            |   | (5.6 | ) |
| June      2007      | June      2014     | Interest      rate swap          |   |     | 353.4  |   |            |   | 5.6 |   |
| June      2007      | June      2014     | Interest      rate swap          |   |     | 353.4  |   |            |   | (5.6 | ) |
| July      2007      | November      2007 | Interest      rate swap          |   |     | 50.0   |   |            |   | (0.6 | ) |
| July      2007      | November      2007 | Interest      rate swap          |   |     | 50.0   |   |            |   | (0.6 | ) |
|                |               | Total  l               |   |     |   |   |            | $      | (17.4 | ) |

----

INDEX

|                              | Maturity           |   | 2007   |    |   | 2006   |   |
|-----------------------------------|--------------------|--------|--------|---------|--------|--------|--------|
| Investor      certificate         | July      2008     |   | $      | 200.0   |   |   | $      | 200.0 |   |
| Investor      certificate         | February      2010 |   |   | 212.0   |   |   |   | 212.0 |   |
| Investor      certificate         | May      2007      |   |   | -       |   |   |   | 212.0 |   |
| Variable      funding certificate | November      2008 |   |   | 800.0   |   |   |   | 800.0 |   |
|                              |               |   |   |    |   |   |   |   |   |
|                              | Total              |   | $      | 1,212.0 |   |   | $      | 1,424.0 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 2007   |   |   | 2006   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Excess      seller’s      interests                                                                                                       |   | $      | 296.1  |   |   | $      | 669.9 |   |
| Interest      only      strip                                                                                                                   |   |   | 11.3   |   |   |   | 20.0 |   |
| Restricted      cash      reserves                                                                                                              |   |   | 11.7   |   |   |   | 16.9 |   |
| Total      amounts due from sales of      receivables                                                                                                                                                                                                    |   | $      | 319.1  |   |   | $      | 706.8 |   |

----

INDEX

|                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                       |   | Fair      Value Change atOctober      31, 2007 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|--------|------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                              | 2007                                                       |   | Adverse      10%                               |   |   | Adverse      20% |   |
| Discount      rate      (annual)                                                                  |  10.3  to      18.8  %            |   | $                                              | 2.4    |   |   | $ | 4.8 |   |
| Estimated      credit      losses                                                                 |   0      to 0.18  %                    |   |                                           | 0.1    |   |   |   | 0.1 |   |
| Payment      speed (percent of portfolio per month)                                                                                                                                                                                                                                                                                                                                                                               |        9.9  to  69.2  % |   |                                           | 0.3    |   |   |   | 0.7 |   |

| 2007                                                                                                                                                                                                                                          |   | Retail      Notes |    |   | Finance      Leases |   |   | Wholesale      Notes |   |   | Accounts |   |   | Affiliates |   |   | Total  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|---------------------|--------|--------|----------------------|--------|--------|----------|--------|--------|------------|--------|--------|--------|--------|
| Serviced      portfolio                                             |   | $                 | 3,012.3 |   |                | $      | 157.2  |                 |   | $      | 1,024.6  |   |   | $          | 424.2  |   |   | $      | 383.5 |   |   | $ | 5,001.8 |   |
| Less      sold receivables – off-balance      sheet                               |   |              | -       |   |                |   | -      |                 |   |   | (919.0   | )      |   |       | (154.8 | )      |   |   | (171.4 | ) |   |   | (1,245.2 | ) |
| Total      on-balance sheet                                                                                                                                                                                                                   |   | $                 | 3,012.3 |   |                | $      | 157.2  |                 |   | $      | 105.6    |   |   | $          | 269.4  |   |   | $      | 212.1 |   |   | $ | 3,756.6 |   |

| 2006                                                                                                                                                                                                                                          |   | Retail      Notes |    |   | Finance      Leases |   |   | Wholesale      Notes |   |   | Accounts |   |   | Affiliates |   |   | Total  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|---------------------|--------|--------|----------------------|--------|--------|----------|--------|--------|------------|--------|--------|--------|--------|
| Serviced      portfolio                                             |   | $                 | 3,208.7 |   |                | $      | 169.8  |                 |   | $      | 1,658.6  |   |   | $          | 616.9  |   |   | $      | 512.3 |   |   | $ | 6,166.3 |   |
| Less      sold receivables – off-balance      sheet                               |   |              | -       |   |                |   | -      |                 |   |   | (1,412.6 | )      |   |       | (453.1 | )      |   |   | (291.9 | ) |   |   | (2,157.6 | ) |
| Total      on-balance sheet                                                                                                                                                                                                                   |   | $                 | 3,208.7 |   |                | $      | 169.8  |                 |   | $      | 246.0    |   |   | $          | 163.8  |   |   | $      | 220.4 |   |   | $ | 4,008.7 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Fair      value      adjustments                                                                                  |   | $      | 4.6    |   |   | $      | (6.6   | )      |   | $ | (6.5 | ) |
| Excess      spread      income                                                                                    |   |   | 53.5   |   |   |   | 64.4   |   |   |   | 62.0 |   |
| Servicing      fees      revenue                                                                                  |   |   | 15.3   |   |   |   | 16.3   |   |   |   | 14.4 |   |
| Losses      on sales of      receivables                                                                          |   |   | (9.3   | )      |   |   | (7.0   | )      |   |   | (2.1 | ) |
| Investment      income                                                                                            |   |   | 9.1    |   |   |   | 6.2    |   |   |   | 6.7 |   |
| Securitization      income                                                                                                                                          |   | $      | 73.2   |   |   | $      | 73.3   |   |   | $ | 74.5 |   |

----

INDEX

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Proceeds      from sales of finance      receivables                                                                          |   | $      | 5,056.1 |   |   | $      | 8,160.2 |   |   | $ | 8,715.6 |   |
| Servicing      fees                                                                                                           |   |   | 15.9    |   |   |   | 16.1    |   |   |   | 14.2 |   |
| Cash      from net excess      spread                                                                                         |   |   | 49.7    |   |   |   | 60.8    |   |   |   | 63.1 |   |
| Investment      income                                                                                                        |   |   | 7.1     |   |   |   | 5.1     |   |   |   | 4.5 |   |
| Net      cash from securitization transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $      | 5,128.8 |   |   | $      | 8,242.2 |   |   | $ | 8,797.4 |   |

|                                                                                                                                                                                                                                                                                                                                                                                             |   | 2007                |    |   | 2006      |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|---------|--------|-----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                             |   | Carrying      Value |    |   | FairValue |   |   | Carrying      Value |   |   | FairValue |   |
| Financial      assets:                                                                                                                                                                                                                                                                                                                                                                           |   |                |    |   |      |   |   |   |   |   |   |   |
| Cash      and cash      equivalents                                                                 |   | $                   | 10.6    |   |      | $      | 10.6 |   |   | $ | 25.6 |   |   | $ | 25.6 |   |
| Finance      receivables:                                                                                                                                                                                                                                                                                                                                                                        |   |                |    |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Retail      notes                                                                                                                                          |   |                | 3,012.3 |   |      |   | 2,776.3 |   |   |   | 3,208.7 |   |   |   | 2,926.0 |   |
| Affiliates                                                                                                                                                 |   |                | 212.1   |   |      |   | 200.3 |   |   |   | 220.4 |   |   |   | 206.9 |   |
| Accounts      (wholesale and retail)                                                                                                                                                                                                                                                                                                                                                             |   |                | 269.4   |   |      |   | 269.4 |   |   |   | 163.8 |   |   |   | 163.8 |   |
| Wholesale      notes                                                                                                                                       |   |                | 105.6   |   |      |   | 105.6 |   |   |   | 246.0 |   |   |   | 246.0 |   |
| Restricted      cash and cash  equivalents                                                                                                                                                                                                                                                                                                                                             |   |                | 370.5   |   |      |   | 370.5 |   |   |   | 651.0 |   |   |   | 651.0 |   |
| Amounts      due from sales of receivables                                                                                                                                                                                                                                                                                                                                                       |   |                | 319.1   |   |      |   | 319.1 |   |   |   | 706.8 |   |   |   | 706.8 |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |                |    |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Financial      liabilities:                                                                                                                                                                                                                                                                                                                                                                      |   |                |    |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Senior      and secured      borrowings                                                             |   |                | 4,269.1 |   |      |   | 4,254.7 |   |   |   | 4,775.7 |   |   |   | 4,695.0 |   |
| Derivative      financial      instruments                                                          |   |                | (17.4   | )      |      |   | (17.4 | ) |   |   | (2.6 | ) |   |   | (2.6 | ) |

----

INDEX

----

INDEX

|                                                                                                                                                                                                                                                                                                                                                                            |   | 1st      Quarter EndedJanuary      31, |   |   | 2nd Quarter      EndedApril      30, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|--------|-------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                            |   | 2007                                   |   |   | 2006                                      |   |   | 2007 |   |   | 2006 |   |
| Financing      revenue                                                                       |   | $                                      | 81.8   |   |                                      | $      | 65.5 |   |   | $ | 83.6 |   |   | $ | 70.0 |   |
| Securitization      income                                                                   |   |                                   | 28.4   |   |                                      |   | 14.5 |   |   |   | 14.3 |   |   |   | 15.4 |   |
| Operating      leases and other revenue                                                                                                                                                                                                                                                                                                                                         |   |                                   | 13.2   |   |                                      |   | 13.1 |   |   |   | 15.4 |   |   |   | 15.1 |   |
| Interest      expense                                                                        |   |                                   | 58.7   |   |                                      |   | 39.1 |   |   |   | 59.2 |   |   |   | 48.2 |   |
| Credit,      collection and administrative                                                                                                                                                                                                                                                                                                                                      |   |                                   | 11.5   |   |                                      |   | 11.6 |   |   |   | 13.1 |   |   |   | 12.3 |   |
| Provision      for credit      losses                                                        |   |                                   | 0.6    |   |                                      |   | 2.0 |   |   |   | 4.1 |   |   |   | 1.6 |   |
| Depreciation      on operating leases                                                                                                                                                                                                                                                                                                                                           |   |                                   | 4.9    |   |                                      |   | 6.1 |   |   |   | 4.6 |   |   |   | 5.9 |   |
| Net      income                                                                              |   |                                   | 33.1   |   |                                      |   | 20.0 |   |   |   | 14.9 |   |   |   | 19.6 |   |

|                                                                                                                                                                                                                                                                                                                                                                            |   | 3rd      Quarter EndedJuly      31, |   |   | 4th Quarter      EndedOctober      31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|--------|--------|---------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                            |   | 2007                                |   |   | 2006                                        |   |   | 2007 |   |   | 2006 |   |
| Financing      revenue                                                                       |   | $                                   | 83.2   |   |                                        | $      | 75.1 |   |   | $ | 76.6 |   |   | $ | 78.7 |   |
| Securitization      income                                                                   |   |                                | 19.3   |   |                                        |   | 23.1 |   |   |   | 11.2 |   |   |   | 20.3 |   |
| Operating      leases and other revenue                                                                                                                                                                                                                                                                                                                                         |   |                                | 13.6   |   |                                        |   | 13.1 |   |   |   | 12.8 |   |   |   | 13.9 |   |
| Interest      expense                                                                        |   |                                | 60.4   |   |                                        |   | 52.2 |   |   |   | 59.7 |   |   |   | 55.1 |   |
| Credit,      collection and administrative                                                                                                                                                                                                                                                                                                                                      |   |                                | 13.5   |   |                                        |   | 10.3 |   |   |   | 12.5 |   |   |   | 13.3 |   |
| Provision      for credit      losses                                                        |   |                                | 3.6    |   |                                        |   | 2.1 |   |   |   | 11.3 |   |   |   | 2.7 |   |
| Depreciation      on operating leases                                                                                                                                                                                                                                                                                                                                           |   |                                | 4.4    |   |                                        |   | 5.3 |   |   |   | 4.6 |   |   |   | 4.8 |   |
| Net      income      (loss)                                                                  |   |                                | 20.9   |   |                                        |   | 24.9 |   |   |   | (1.6 | ) |   |   | 15.7 |   |

|                                                                                                                                                                                                                                                                                                                               |   | As      ofJanuary      31, |    |   | As      of April      30, |   |    | As      ofJuly      31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|---------|--------|--------------------------------|--------|---------|-------------------------|--------|
|                                                                                                                                                                                                                                                                                                                               |   | 2007                       |    |   | 2006                           |   |    | 2007                    |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
| Finance      receivables,      net                                                 |   | $                          | 4,054.2 |   |                           | $      | 3,653.6 |                    |   | $ | 4,073.1 |   |   | $ | 3,841.3 |   |   | $ | 3,807.7 |   |   | $ | 3,850.2 |   |
| Amounts      due from sales of receivables                                                                                                                                                                                                                                                                                         |   |                       | 352.9   |   |                           |   | 343.6   |                    |   |   | 352.7 |   |   |   | 652.3 |   |   |   | 290.3 |   |   |   | 473.9 |   |
| Restricted      cash and cash equivalents                                                                                                                                                                                                                                                                                          |   |                       | 360.4   |   |                           |   | 455.4   |                    |   |   | 480.0 |   |   |   | 609.0 |   |   |   | 592.5 |   |   |   | 330.7 |   |
| Total      assets                                                                  |   |                       | 5,013.9 |   |                           |   | 4,644.4 |                    |   |   | 5,122.4 |   |   |   | 5,340.3 |   |   |   | 4,883.4 |   |   |   | 4,880.2 |   |
| Senior      and secured borrowings                                                                                                                                                                                                                                                                                                 |   |                       | 4,216.1 |   |                           |   | 3,955.9 |                    |   |   | 4,464.1 |   |   |   | 4,608.9 |   |   |   | 4,315.9 |   |   |   | 4,140.4 |   |
| Total      liabilities and shareowner’s equity                                                                                                                                                                                                                                                                               |   |                       | 5,013.9 |   |                           |   | 4,644.4 |                    |   |   | 5,122.4 |   |   |   | 5,340.3 |   |   |   | 4,883.4 |   |   |   | 4,880.2 |   |

----

INDEX

Item 9.       Changes in andDisagreements with Accountants on Accounting and FinancialDisclosure

----

INDEX

| ·   | Appropriateness      of sale accounting for certain transactions with leaseback terms,      including certain transactions which also involved International; whether      certain leases should have been accounted for as capital leases rather      than as operating leases; the appropriateness of revenue recognition at      International and related implications to us; and, the existence of      unreconciled differences in reconciliations of inter-company      accounts. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | It      is possible that the ultimate resolution of the above matters could also      affect the Company’s financial statements for fiscal years prior to      2005.  None of these accounting matters were resolved to our      satisfaction prior to ourdismissal. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      re-emphasized the importance of internal controls and ethical behavior      through more visible and consistent messaging across the organization.      Under the direction of our Chief Executive Officer, our Chief Financial      Officer and other members of our senior management are actively engaged in      implementing efforts to address our control deficiencies and in promoting      the importance of conducting business and accounting activities in      compliance with our code ofconduct. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      have made leadership changes, increased communication across the      organization, increased our staff levels and changed accountabilities to      better align with skills and experience. We are focused on developing the      competency of our finance and accounting team by updating GAAP-compliant      policies and procedures, increasing formal and informal training, and      augmenting our staff with outsideexpertise. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

INDEX

| ·   | We      availed ourselves of the heavy investment made by NIC in Sarbanes-Oxley      compliance function to enable a more effective assessment and remediation      process over the internal control over financial reporting. While      investing in our own internal resources with respect to the Sarbanes-Oxley      compliance function, NIC also outsourced fully the internal audit function      to a nationally recognized public accounting firm to further the goal of      increasing the function’s monitoring  effectiveness. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      have continued the quarter governance meeting over information systems and      the design of controls around those systems.  Under the guidance      of NIC’s new Chief Information Officer (“CIO”), they have adopted and      implemented Control Objectives for Information and related Technology      (COBIT®), a recognized industry standard control framework, as the      foundation of our design of information technology (“IT”) general controls      and instilled more guidance and discipline regarding IT logical access and      program changes.  The new CIO has responsibility for our IT      function as well. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | strengthening      our finance and accounting leadership team by replacing certain leaders,      creating new positions, and changing reporting  lines; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increasing      the number of accounting personnel with appropriate levels of accounting      knowledge, experience, and training to properly apply GAAP. Specifically,      between October 31, 2005 and October 31, 2007, we hired 6 incremental      finance and accounting staff. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

INDEX

| ·   | continued      to retain outside consultants with appropriate expertise and training to      supplement our accounting and financestaff; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | engaging      an independent organization that specializes in the creation of financial      models to assist us in the development of various models necessary to      value the various assets created as a result of securitization      transactions; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | conducting      or attending training provided by Navistar, Inc. and others on critical      accounting matters such as securitization accounting, account      reconciliations, intercompany reconciliations, fixed assets, internal      controls, and others during 2006 and2007. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      2007, Navistar, Inc.’s tax group implemented procedures to improve their      internal control effectiveness which included retaining the detailed      schedules supporting our tax liability requirements;  and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      2007, an outside consulting firm was engaged by Navistar, Inc. to assist      with the redesign of the process and controls and along with the internal      audit function, to test the effectiveness of the redesigned and      implemented controls. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pertain      to the maintenance of records that, in reasonable detail, accurately and      fairly reflect the transactions and dispositions of assets of the      company. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide      reasonable assurance that (i)transactions are recorded as necessary to      permit preparation of financial statements in accordance with GAAP and      provide reasonable assurance that (ii)receipts and expenditures of the      company are being made in accordance with our management’s and our Board      of Directors’ authorization. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide      reasonable assurance regarding prevention or timely detection of      unauthorized acquisition, use, or disposition of our assets that could      have a material effect on our consolidated financial      statements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

INDEX

| ·   | Control Environment:      Based on NIC’s shortfall in this area, we were not able to      establish an adequately strong consciousness regarding ethics across all      areas of the company and the importance of internal controls over      financial reporting including adherence to GAAP. Because the control      environment influences the control consciousness throughout the      consolidated enterprise and is the foundation of all other components of      internal control over financial reporting, this weakness in the overall      control environment likely contributed to many of the other material      weaknesses disclosed herein. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Accounting Policies and      Procedures: We did not have an effective process for implementing,      updating, disseminating, and monitoring GAAP-compliant accounting policies      and procedures. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Internal Audit: Our      internal audit department was not an effective monitoring      control. |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | Information Technology:      We did not consistently operate our newly designed IT general      controls throughout the year. Specifically, controls were not operating      sufficiently to consistently ensure computer operations functioned as      designed, that access to certain financial applications and data was      adequately restricted to authorized personnel and that program changes to      particular financial applications were documented, tested, and moved into      the production environment by individuals separate from the development      function. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Journal Entries: We did      not effectively operate our controls over the review, and approval of      journal entries. Specifically, effective controls were not in place to      verify that all journal entries were prepared with sufficient supporting      documentation reviewed and approved by an appropriate level of management      to ensure the completeness, accuracy, and appropriateness of the entries      recorded in the accounting records. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pension and Other      Postretirement Benefits Accounting: We utilize the services of the      pension and benefits group of Navistar, Inc. to address our pension      accounting needs.  This group did not have sufficient monitoring      controls and effective communications among the constituents responsible      for providing underlying data, managing investments, reporting, and      accounting for postretirementbenefits. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

INDEX

| ·   | Our      leadership team is committed to achieving and maintaining a strong control      environment, high ethical standards and financial reporting integrity.      This commitment will continue to be communicated to and reinforced with      our employees. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      will continue to foster awareness and understanding of standards and      principles for accounting and financial reporting. This includes the      implementation and clarification of specific accounting policies and      procedures and effective execution of our newly designed accounting      training program. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      will continue to enhance the development, communication, and monitoring of      processes and controls to ensure that appropriate journal entry controls      are performed, documented, and reviewed as part of our standardized      procedures. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      will continue to invest in modifications of our information systems to      improve the reliability of our financial reporting and increase the      completeness and consistency of the controls around logical access and      program change. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      will continue to support our internal Management Representation Letter      process to ensure the timely assessment of accounting and disclosure      matters requiring our attention and to support our notification of matters      to NIC. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Extending      the financial reporting process, thereby allowing us to conduct additional      analyses and substantive procedures, including preparation of account      reconciliations and making additional adjustments as necessary to confirm      the accuracy and completeness of our financial reporting,    and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Hiring      additional resources and retaining outside consultants with relevant      accounting experience, skills, and knowledge, working under our      supervision and direction to assist with the account closing and financial      statement preparation process. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 9B.  Other Information

----

INDEX

PART III

Items 10, 11, 12 and 13

Item 14.  Principal Accountant Fees andServices

----

INDEX

PART IV

Item 15.  Exhibits, and Financial Statement Schedules andReport on Form 8K

|   | 3    | Articles of Incorporation and      By-Laws                                                                                                                                  | E-1  |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------|
|   | 4    |  Instruments Defining Rights of Security Holders,      including      Indentures                                                                                       | E-2  |
|   | 10   |  Material      Contracts                                                                                                                                                                                  | E-3  |
|   | 12   |  Calculation of Ratio of Earnings to Fixed      Charges                                                                                                                | E-19 |
|   | 15   |  Financial Statement      Schedules                                                                                                                                    | E-20 |
|   | 21   |  Subsidiaries of the      Registrant                                                                                                                                   | E-23 |
|   | 31.1 |  CEO Certification Pursuant to Rule 13a-14(a) and      15d-14(a)                                                                                                       | E-24 |
|   | 31.2 |  CFO Certification Pursuant to Rule 13a-14(a) and      15d-14(a)                                                                                                       | E-26 |
|   | 32   |  CEO and CFO Certification Pursuant to Section 1350 of      Chapter 1350 of Chapter 63 of Title 18 of the United States      Code                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | E-28 |

----

INDEX

|                         | Navistar      Financial Corporation                                                                                                                                      |
|-------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                    |                                                                                                                                                                     | (Registrant) |
|                    |                                                                                                                                                                     |   |
| Date:      May 29, 2008 |                               By:  /s/ | DAVID L.      DERFELT |
|                    |                                                                                                                                                                     | David      L. Derfelt |
|                    |                                                                                                                                                                     | V.P.,      and Controller |
|                    |                                                                                                                                                                     | (Principal      Accounting  Officer) |

----

INDEX

|   | Signature                                                                                                                                                                                                                                                                                                    |   | Title                                                                                                  |   | Date         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|--------|--------------|
|   |                                                                                                                                                                                                                                                                                                    |   |                                                                                                   |   |         |
| /s/    | JOHN V. MULVANEY,      SR.John      V. Mulvaney, Sr.                                                                                                                                                                                                                                                         |   | Vice      President, Chief Financial Officer and Treasurer; Director(Principal      Financial Officer) |   | May 29, 2008 |
|   |                                                                                                                                                                                                                                                                                                    |   |                                                                                                   |   |         |
| /s/    | DAVID      L.  DERFELTDavid      L. Derfelt                                                                                                                                                                                                                                                        |   | Vice      President and Controller(Principal      Accounting Officer)                                  |   | May 29, 2008 |
|   |                                                                                                                                                                                                                                                                                                    |   |                                                                                                   |   |         |
| /s/    | PAMELA J.      TURBEVILLEPamela      J. Turbeville                                                                                                                                                                                                                                                           |   | Chief      Executive Officer; Director(Principal      Executive Officer)                               |   | May 29, 2008 |
|   |                                                                                                                                                                                                                                                                                                    |   |                                                                                                   |   |         |
| /s/    | TERRY M.      ENDSLEY                                           Terry      M. Endsley |   | Director                                                                                          |   | May 29, 2008 |
|   |                                                                                                                                                                                                                                                                                                    |   |                                                                                                   |   |         |
| /s/    | RICHARD C.      TARAPCHAKRichard      C. Tarapchak                                                                                                                                                                                                                                                           |   | Director                                                                                          |   | May 29, 2008 |
|   |                                                                                                                                                                                                                                                                                                    |   |                                                                                                   |   |         |
| /s/    | WILLIAM A.      CATONWilliam      A.  Caton                                                                                                                                                                                                                                                        |   | President;      Director                                                                          |   | May 29, 2008 |
|   |                                                                                                                                                                                                                                                                                                    |   |                                                                                                   |   |         |
| /s/    | ALICE M.      PETERSONAlice      M. Peterson                                                                                                                                                                                                                                                                 |   | Director                                                                                          |   | May 29,2008  |

----

INDEX