NASHVILLE, Tenn., July 22 /EMWNews/ -- Caterpillar

Financial Services Corporation (Cat Financial) today reported record

second-quarter revenues of $785 million, an increase of $38 million, or 5

percent, compared with the second quarter of 2007. Second-quarter profit

after tax was $130 million, a $7 million, or 6 percent, increase over the

second quarter of 2007.



    Of the increase in revenues, $101 million resulted from the impact of

continued growth of earning assets (finance receivables and operating

leases at constant interest rates), and $7 million resulted from a net

increase in various other net revenue items, including $12 million related

to gains on the sales of receivables. These increases were offset by a $70

million decrease from the impact of lower interest rates on new and

existing finance receivables.



    On a pre-tax basis, profit was $176 million, down $11 million, or 6

percent, compared with the second quarter of 2007. The decrease was

principally due to higher provision expense of $21 million and an $11

million increase in general, operating and administrative expense, offset

by an increase of $15 million in margin (wholesale, retail finance,

operating lease and associated fee revenues less interest expense and

depreciation on assets leased to others) and a $7 million net increase in

various other net revenue items, including $12 million related to gains on

the sales of receivables. The increase in margin principally resulted from

the growth in average earning assets over 2007 of $3.72 billion.



    Provision for income taxes decreased $18 million, or 28 percent,

compared with the second quarter of 2007. The decrease was primarily

attributable to favorable changes in the geographic mix of pre-tax profits.



    New retail financing was a record $4.60 billion, an increase of $944

million, or 26 percent, from the second quarter of 2007. The increase was

the result of increased new retail financing primarily in our Asia-Pacific,

Diversified Services and Europe operating segments.



    Past dues over 30 days at June 30, 2008 were 3.35 percent compared to

2.09 percent at June 30, 2007. Write-offs, net of recoveries, were $19

million for the second quarter of 2008 compared to $12 million for the

second quarter of 2007. Both of these increases were primarily due to the

continued softening of the U.S. housing industry.



    Caterpillar Inc. Vice President and Cat Financial President Kent M.

Adams said, "Cat Financial's record new business and strong profit combined

with our diversified funding platform continues to demonstrate our ability

to deliver reliable earnings. Although past dues are up from last year, our

portfolio continues to perform very well with write-offs as a percentage of

the retail portfolio in-line with the five-year historical average. During

this time of economic uncertainty in key markets, we continue to work to be

a reliable source of financing for Caterpillar customers and dealers."



    For more than 25 years, Cat Financial, a wholly owned subsidiary of

Caterpillar Inc., has been providing a wide range of financing alternatives

to customers and Caterpillar dealers for Caterpillar machinery and engines,

Solar (R) gas turbines and other equipment and marine vessels. Cat

Financial has offices and subsidiaries located throughout the Americas,

Asia, Australia, Latin America and Europe, with headquarters in Nashville,

Tennessee.










    STATISTICAL HIGHLIGHTS:



                 SECOND QUARTER 2008 VS. SECOND QUARTER 2007

                               (ENDING JUNE 30)

                            (Millions of dollars)



                                           2008          2007         CHANGE



    Revenues                               $785          $747            5%

    Profit Before Tax                      $176          $187           (6%)

    Profit After Tax                       $130          $123            6%

    New Retail Financing                 $4,597        $3,653           26%

    Total Assets                        $32,413       $27,616           17%







                     SIX MONTHS 2008 VS. SIX MONTHS 2007

                               (ENDING JUNE 30)

                            (Millions of dollars)



                                           2008          2007         CHANGE



    Revenues                             $1,564        $1,460            7%

    Profit Before Tax                      $359          $369           (3%)

    Profit After Tax                       $254          $248            2%

    New Retail Financing                 $8,071        $6,397           26%





    SAFE HARBOR STATEMENT UNDER THE SECURITIES LITIGATION REFORM ACT OF

1995



    Certain statements contained in this earnings release may be considered

"forward-looking statements" and involve risks and uncertainties that could

significantly impact results. In this context, words such as "believes,"

"expects," "estimates," "anticipates," "will," "should" and similar words

or phrases often identify forward-looking statements made on behalf of Cat

Financial. It is important to note that actual results of the company may

differ materially from those described or implied in such forward-looking

statements based on a number of factors and uncertainties, including, but

not limited to changes in economic conditions; currency exchange or

interest rates; political stability; market acceptance of the company's

products and services; significant changes in the competitive environment;

changes in law, regulations and tax rates; and other general economic,

business and financing conditions and factors described in more detail in

the company's Form 10-K filed with the Securities and Exchange Commission

on February 22, 2008. We do not undertake to update our forward-looking

statements.