Commission File No. 0-13295

Registrant's telephone number, including area code: (615) 341-1000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Not Applicable.

No X

At December 31, 2002, one share of common stock of the Registrant was outstanding, which is owned by Caterpillar Inc.

The Registrant complies with the conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K, and is therefore filing this form with the reduced disclosure format.

Documents Incorporated by Reference: See page 12 for the exhibit index.

Caterpillar Financial Services Corporation, a Delaware corporation organized in 1981, is a wholly-owned finance subsidiary of Caterpillar Inc. (together with its other subsidiaries, "Caterpillar" or "Cat"). We provide retail financing alternatives for Caterpillar machinery and engines as well as other equipment and marine vessels to customers and dealers around the world, provide wholesale financing to Caterpillar dealers, and purchase short-term dealer receivables from Caterpillar. We have over 20 years of experience in providing financing in these markets, contributing to our knowledge of asset values, industry trends, product structuring, and customer needs. We emphasize prompt and responsive service and offer various financing plans to meet customer requirements, increase Caterpillar sales, and generate financing revenue. Our total number of employees at December 31, 2002 was 1,201. For more detailed information on our parent company, Caterpillar Inc., please visit http://www.cat.com. For more information about our business, please visit http://www.catfinancial.com. Information contained on Caterpillar Inc.'s and our Internet sites are not incorporated by reference into this document.

Retail financing plans include:

Investment in finance leases - retail:

• Tax leases that are classified as either operating or finance leases for financial accounting purposes, depending on the characteristics of the lease. For tax purposes, we are considered the owner of the equipment (20%*).
• Finance (non-tax) leases where the lessee is considered the owner of the equipment during the term of the contract and that either require or allow the customer to purchase the equipment for a fixed price at the end of the term (16%*).
• Installment sale contracts, which are equipment loans that enable customers to purchase equipment with a down payment or trade-in and structure payments over time (20%*).
• Governmental lease-purchase plans in the U.S. that offer low interest rates and flexible terms to qualified non-federal government agencies (1%*).

Retail notes receivable:

• Working capital loans that allow customers and dealers to use their Caterpillar equipment as collateral to obtain financing for other business needs (26%*).

Wholesale financing plans (17%*) include Wholesale notes receivable and Investment in finance leases - wholesale:

• Inventory/rental programs which provide assistance to dealers by financing their inventory, rental fleets, and rental facilities.
• Short-term dealer receivables we purchase from Caterpillar at a discount.

The retail financing business is highly competitive, with financing for users of Caterpillar equipment available through a variety of sources, principally commercial banks and finance and leasing companies. Cat Financial's main competitors include Citibank, GECC, CIT Group, John Deere Capital Corporation, Case New Holland Credit, JCB Credit, and local banks. The sluggish economy in 2002 created a highly competitive environment for sales. Competitive manufacturers used below-market interest rate programs (subsidized by the manufacturer) to assist machine sales. Caterpillar and Cat Financial work together to provide a broad array of financial merchandising programs around the world to meet these competitive offers.

We continue in our efforts to respond quickly to customers, improve internal processing efficiencies, and reduce costs. Our web-based Cat FinancExpress^SM transaction processing and information tool, currently available in the U.S. and France, gives us a competitive advantage in these areas. Cat FinancExpress^SM collects information on-line to provide finance quotes, credit decisions, and print documents, all in a very short time frame.

We are largely dependent upon Caterpillar dealers' ability to sell equipment and customers' willingness to enter into financing or leasing agreements with us. We also are affected by the availability of funds from our financing sources and general economic conditions such as inflation and market interest rates.

We provide financing only when acceptable criteria are met. Credit decisions are based on, among other things, the customer's credit history, financial strength, and intended use of equipment. We typically maintain a security interest in retail financed equipment and require physical damage insurance coverage on financed equipment.

In certain instances, our operations are subject to supervision and regulation by state, federal, and various foreign government authorities and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, among other things, (i) regulate credit granting activities, (ii) establish maximum interest rates, finance charges, and other charges, (iii) require disclosures to customers, (iv) govern secured transactions, (v) set collection, foreclosure, repossession, and other trade practices, (vi) prohibit discrimination in the extension of credit and administration of loans, and (vii) regulate the use and reporting of information related to borrower's credit experience.

We continue to finance a significant portion of Caterpillar dealers' sales and inventory of Cat equipment, especially in our North American segment (see Note 16 of Notes to Consolidated Financial Statements for more information regarding our segments and geographic areas). Our competitive position is improved by marketing programs, subsidized by Caterpillar and/or Caterpillar dealers, which allow us to offer below-market interest rates. Under these programs, Caterpillar, or the dealer, subsidizes an amount at the outset of the transaction, which we then recognize as revenue over the term of the financing.

Our principal executive offices are located in Nashville, Tennessee. We have 41 offices, of which 7 are located in the United States, 17 are in Europe, and 17 are in other countries. All offices are leased.

Our stock is not publicly traded. Caterpillar is the owner of our one outstanding share.

part ii. Item 7. Management's Discussion and Analysis of Results of Operations and capital resources and liquidity (Dollars in millions)

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect reported amounts. The most significant estimates include those related to our residual values for leased assets and for our allowance for credit losses.

The estimated future wholesale market value (residual value) of leased equipment at the time of the expiration of the lease term represents a careful analysis of historical wholesale market sales prices, projected forward on a level trend line without consideration for inflation or possible future pricing action. The residual value is tempered by the following critical factors: market size and demand, any known significant market/product trends, total accumulated hours judged against estimated useful life, machine configuration, application, location, model changes, quantities, and past re-marketing experience. Many impact factors are spelled out in an application survey that is completed prior to quotation. The application survey also clearly defines applicable return conditions and remedies for non-compliance, thus ensuring the leased equipment will be in good operating condition upon return. Model changes and updates, as well as market strength and product acceptance, are continually monitored, and residual adjustments are made in accordance with the significance of any such changes. A remarketing sales staff works closely with customers and dealers to manage the sale of lease returns and the recovery of residual exposure. During the term of the leases, residual amounts are monitored. If estimated market values significantly decline due to economic factors, obsolescence, or other adverse circumstances, the residuals are adjusted to the lower estimated values by a charge to earnings.

As the vast majority of our finance receivables are retail financings, which consist of homogeneous contracts, the allowance for credit losses is evaluated on a regular basis and adjusted based upon management's best estimate of probable losses inherent in the portfolio at December 31. In estimating probable losses, we review accounts that are past due, non-performing, or in bankruptcy. We also review accounts that may be at risk using information available about the customer, such as financial statements, news reports, and published credit ratings. We also use general information regarding industry trends and the general economic environment. Using an estimate of current fair market value of collateral and factoring in credit enhancements, such as additional collateral and third party guarantees, we arrive at an estimated loss for specific accounts and estimate an additional amount for the remainder of the portfolio based upon historical trends.

The portfolio (primarily "Total net finance receivables" plus "Equipment on operating leases, less accumulated depreciation") was $16,546 at December 31, 2002, an increase of $2,075 over the prior year.

At December 31, 2002, we also serviced $966 in receivables sold to others, which consisted of $240 in wholesale receivables under revolving, asset-backed securitization agreements, $655 of installment sale contracts, and $71 of finance leases. These receivables are not available to pay our creditors.

We financed record new retail volume totaling $7,287 during 2002, as compared to $6,813 in 2001. The increase of $474 was primarily related to increased financing in the North American segment (including a $235 increase due to the February 2002 acquisition of FCC and a $94 increase in Canada, primarily related to a portfolio purchase from a Canadian dealer).

Wholesale and retail finance revenue for 2002 was $971, a decrease of $127 from 2001 (a decrease of $104 excluding the effect on Wholesale finance revenue of the recognition of unamortized discounts on trade receivables purchased from Caterpillar that paid before maturity). The decrease was due principally to a 152 basis point decrease in the average interest rate, partially offset by an 8% increase in the average receivable balance outstanding. Discounts on North American dealer trade receivables purchased from Caterpillar that paid earlier than estimated at their purchase date, included in revenues, were $25 for 2002 and $67 for 2001. We purchase trade receivables each week at discounts that are expected to yield a market rate of interest over their term. Because the discounts are based on estimates as to when the receivables will be paid, the actual yield on the receivables can be higher or lower than the rates used to determine the discounts. In 2001, the yield was higher because the receivables paid substantially earlier than estimated. The unearned discounts recognized in 2002 revenues due to early payments included $18 in Wholesale finance revenue, related to Wholesale notes receivable, and $7 in Other revenue, related to the securitized portion of the receivables. The revenues recognized in 2001 were $41 in Wholesale finance revenue and $26 in Other revenue. The average interest rate on finance receivables was 7.20% for 2002 compared with 8.72% for 2001 (7.06% and 8.39% excluding the recognition of unamortized discounts on trade receivables purchased from Caterpillar that paid before maturity). This rate is computed by dividing finance revenue by the average finance receivable balance, net of unearned income. The tax benefits of governmental (non-federal) lease purchase contracts and tax-oriented leases are not included in these computed interest rates.

Rental revenue for 2002 was $539. The increase of $131 from 2001 was due to the increase in equipment on operating leases that resulted from increased marketing efforts and higher customer demand.

Other revenue for 2002 was $72, a decrease of $42 from 2001. Excluding the gain on the sale of trade receivables that was related to the recognition of unamortized discounts on the trade receivables purchased from Caterpillar, the decrease in Other revenue was $23. Significant items included:

In February 2001, we established a Canadian partnership with Finning International Incorporated ("Finning") to support their entrance into the Cat Rental Store market in the United Kingdom. Our $269 investment in this partnership is recorded in Other assets on the Consolidated Statement of Financial Position, and is accounted for under the cost method. The investment totaled $270 in 2001. In 2002, we recorded $11 of dividend income from this partnership in Other revenue versus $15 for 2001.

Interest expense for 2002 decreased $144 from 2001. This decrease was primarily due to the reduction in the average cost of funds of 154 basis points, to 3.90% for 2002 from 5.44% for 2001, partially offset by the impact of a 10% increase in average debt levels that was due to funding increased new retail business.

Depreciation expense on equipment leased to others was up $101 over 2001 due to the increase in equipment on operating leases discussed in the Revenues section above.

General, operating, and administrative expenses increased $17 during 2002 compared to 2001. This increase primarily resulted from staff-related expenses due to the larger portfolio (including the increase due to the February 2002 acquisition of FCC) and geographical expansion and various cost increases related to the increase in repossessions. There were 1,201 employees at December 31, 2002, an increase of 121 from December 31, 2001.

The provision for credit losses increased $12 compared to 2001, resulting from an assessment of the adequacy of the allowance for credit losses considering the larger portfolio, actual write-offs, and a weakened global economy. The allowance for credit losses was 1.47% of finance receivables, net of unearned income, at December 31, 2002, compared to 1.42% at December 31, 2001. The Notes receivable from Caterpillar are not included in this calculation.

The effective tax rate increased to 36.3% in 2002 from 36.0% in 2001.

Profit for 2002 was $193, down $19 from 2001. The decrease was primarily due to a $27 reduction in the recognition of unamortized discounts on trade receivables purchased from Caterpillar that paid before maturity. Other reductions in profit were due to a decrease in other securitization-related revenue and increased general, operating, and administrative expenses due to growth. The reduction in profit was partially offset by the absence of residual write-downs recorded in 2001 for agriculture equipment (see 2001 Compared With 2000 section below).

Receivables that were past due over 30 days were 3.55% of the total receivables at December 31, 2002, as compared to 3.95% at December 31, 2001. The decrease was primarily related to a reduction in past due receivables in Europe and Mexico. Bad debt write-offs, net of recoveries, were $85 for 2002 compared with $72 for 2001. The increase in write-offs was primarily related to generally weak economic conditions in the U.S. We will continue to monitor the allowance for credit losses to provide for an amount we believe is adequate, after considering the value of any collateral, to cover uncollectible receivables. See Note 2 of Notes to Consolidated Financial Statements for information on the allowance for credit losses.

The portfolio was $14,471 at December 31, 2001, an increase of $1,090 over December 31, 2000.

At December 31, 2001, we also serviced $1,116 in receivables sold to others, which consisted of $500 in wholesale receivables under revolving, asset-backed securitization agreements, $528 of installment sale contracts, and $88 of finance leases.

We financed new retail business of $6,813 during 2001 as compared to $5,598 in 2000. The increase was primarily attributed to financing a higher percentage of deliveries of Caterpillar product in North America and Europe.

Total revenues for 2001 were a record $1,620. The increase of $177 over 2000 was primarily related to a larger portfolio, of which the largest component was rental revenue from operating leases, and increased gains on sales of receivables. Increases in revenues were partially offset by a decreased yield on the portfolio, which is related to the lower interest rate environment.

Included in 2001 revenues was $67 in discounts on North American dealer trade receivables purchased from Caterpillar that paid earlier than estimated at their purchase date. We purchase trade receivables each week at discounts that are expected to yield a market rate of interest over their term. Because the discounts are based on estimates as to when the receivables will be paid, the actual yield on the receivables can be higher or lower than the rates used to determine the discounts. In 2001 the yield was higher because the receivables paid substantially earlier than estimated. However, similar results are not expected in future periods. The unearned discounts recognized in 2001 revenues due to early payments included $41 in Wholesale finance revenue, related to Wholesale notes receivable and $26 in Other revenue, related to the securitized portion of the receivables.

The average interest rate on finance receivables was 8.72% for 2001 (8.39% excluding the recognition of unamortized discounts on trade receivables purchased from Caterpillar that paid before maturity) compared with 8.88% for 2000. This rate is computed by dividing finance revenue by the average finance receivable balance, net of unearned income. The tax benefits of governmental (non-federal) lease purchase contracts and tax-oriented leases are not included in these computed interest rates.

Other revenue was $114 for 2001, an increase of $27 from 2000, and included securitization-related revenue, fees, and other miscellaneous revenue. Significant items included:

In February 2001, we established the Canadian partnership with Finning referred to previously. In 2001, we recorded $15 of dividend income from this partnership in Other revenue.

Interest expense for 2001 decreased $56 from 2000. This decrease was primarily the result of the lower interest rate environment, partially offset by increased borrowings. The average interest rate on borrowed funds was 5.44% for 2001 as compared to 6.52% for 2000.

Depreciation expense on equipment leased to others increased $77 over 2000 primarily due to an increase in new equipment on operating leases.

General, operating, and administrative expenses increased from $155 during 2000 to $185 during 2001. Approximately half of the increase is related to additional staff expenses resulting from growth. The remaining increase is related to accelerated depreciation on leasehold improvements due to lease expirations and to additional software depreciation resulting from software additions. The number of full-time employees was 1,080 at December 31, 2001, an increase of 125 from December 31, 2000.

The provision for credit losses increased $35 over 2000, resulting from an assessment of the adequacy of the allowance for credit losses considering the larger portfolio, actual 2001 write-offs, and a weakened global economy. Our allowance for credit losses is 1.42% of our net finance receivables, which is an increase from 1.32% in 2000.

The effective tax rate increased from 34.6% in 2000 to 36.0% in 2001. The increase from 2000 was due to a U.S. tax benefit recorded in 2000 related to our Canadian subsidiary, state and federal refunds received during 2000, and a decrease in municipal income in 2001.

Profit for 2001 was $212, a $53 increase from 2000, a $10 increase excluding the recognition of unamortized discounts on trade receivables purchased from Caterpillar that paid before maturity. This increase resulted principally from a higher spread on the larger portfolio and increased gains on sales of receivables, partially offset by a higher provision for credit losses and increased general, operating, and administrative expenses.

The wider interest rate spread on the portfolio was principally a result of 2001's interest rate environment, where the continuing rapid decrease in rates allowed our debt rates to decrease more rapidly than the portfolio rates because we are not 100% "match funded." As rates stabilize, or increase, our interest rate spread is expected to narrow accordingly. Please refer to Note 10 of Notes to Consolidated Financial Statements for additional information on our "match funding" policy.

In the fourth quarter of 2001, profit after tax was decreased by $5 due to adjustments of agriculture equipment residuals of operating and finance leases. The decrease in the residuals was deemed necessary due to 1) a decline in the agriculture industry market that started in 2000 and continued throughout 2001 and 2) new models scheduled for production in 2002 that were expected to have a negative effect on the market for older models. The impact of the adjustments was a $4 increase in depreciation expense and a $1 decrease in finance revenue.

Receivables that were past due over 30 days were 3.95% of the total receivables at December 31, 2001, as compared to 3.64% at December 31, 2000. The increase was primarily related to past due receivables in Latin America and Europe. Bad debt write-offs, net of recoveries, were $72 for 2001 compared with $28 for 2000. The increase in write-offs was primarily attributable to the weakened economy in North America and Latin America. We will continue to monitor the allowance for credit losses to provide for an amount we believe is adequate, after considering the value of any collateral, to cover uncollectible receivables. See Note 2 of Notes to Consolidated Financial Statements for information on the allowance for credit losses.

Operations for 2002 were funded with a combination of borrowings, proceeds from sales of receivables, and retained earnings.

Total borrowings outstanding at December 31, 2002 were $14,753, an increase of $1,731 over 2001 due to financing a higher amount of new retail business as previously noted. Outstanding borrowings include:

$9,952 of medium-term notes

$3,507 of commercial paper

$ 795 of notes payable to Caterpillar

$ 255 of money market funds

$ 174 of short-term bank borrowings

$ 38 of loans from a company-owned partnership

$ 32 of long-term bank borrowings

At December 31, 2002, we had total credit lines of $5,587 that included $3,950 of revolving credit agreements shared with Caterpillar, $826 of variable amount lending agreements with Caterpillar, and $811 of short-term credit lines. These credit lines are with a number of banks and are considered support for our commercial paper, commercial paper guarantees, and bank borrowings.

As an alternative funding source, we securitize assets. In this process, retail or wholesale finance receivables are sold to special purpose bankruptcy-remote subsidiaries. In 2002 we received proceeds of $1,696 from subsequent sales of dealer receivables into a revolving securitization facility and received proceeds of $641 for retail installment sale contracts and finance leases sold into a public asset-backed securitization facility. Please refer to Note 4 of Notes to Consolidated Financial Statements for additional information.

During the year, Caterpillar did not contribute any additional capital. Our debt-to-equity ratio as defined under the revolving credit agreements was 7.8 to 1 at December 31, 2002 as compared to 7.7 to 1 at December 31, 2001. See Note 7 of Notes to Consolidated Financial Statements for additional information.

We have committed cash outflow related to long-term debt and operating lease agreements. Minimum payments for these long-term obligations are:

We use interest rate derivative financial instruments and currency derivative financial instruments to manage interest rate and foreign currency exchange risks that we encounter as a part of our normal business. We do not use these instruments for trading purposes.

Interest rate derivatives. We have a "match funding" objective whereby the interest rate profile (fixed rate or floating rate) of our debt portfolio is matched to the interest rate profile of our receivables portfolio within certain parameters. In pursuing this objective, we use interest rate swap agreements to modify the structure of the debt portfolio. "Match funding" allows us to maintain our interest rate spreads, regardless of the direction interest rates move.

In the normal course of business, our operations and financial position are subject to fluctuations in interest rates. We use interest rate swap agreements to manage this risk and maintain the spread between interest-bearing assets and liabilities. To estimate the impact of interest rate movement on our income, we compute a "baseline" and "shocked" interest expense over the next 12 months. The difference between the "baseline" and "shocked" amounts is an estimate of our sensitivity to interest rate movement.

We determine the "baseline" interest expense by applying a market interest rate to the unhedged portion of our debt portfolio. The unhedged portion of our portfolio is an estimate of fixed rate assets funded by floating rate liabilities. We incorporate the effects of interest rate swap agreements in the estimate of our unhedged portfolio. We determine the "shocked" interest expense by adding 100 basis points to the market interest rate applied to "baseline" interest expense and apply this rate to the unhedged portfolio.

Based on our sensitivity analysis, assuming no new fixed-rate assets funded by floating rate liabilities were extended and no further action was taken to alter our current interest rate sensitivity, the impact of a 100 basis point rise in interest rates is an estimated $15 increase to interest expense for 2003, the same as the prior year's estimated impact for 2002. Although we believe this measure provides a meaningful estimate of our interest rate sensitivity, it does not adjust for other factors that impact our interest expense. Accordingly, no assurance can be given that actual results would be consistent with the results of our estimate. Our analysis does not necessarily represent our current outlook of future market interest rate movement.

Foreign currency derivatives. Since our policy for our operations is to hedge the foreign exchange risk when the currency of our debt portfolio does not match the currency of our receivable portfolio, a 10% change in the value of the U.S. dollar relative to all other currencies would not have a material effect on our consolidated financial position, results of operations, or cash flow. Neither our policy nor the effect of a 10% change in the value of the U.S. dollar has changed from that reported at the end of last year.

1. The following documents are filed as part of this report.

1. Financial Statements

• Report of Independent Accountants
• Consolidated Statement of Financial Position
• Consolidated Statement of Profit
• Consolidated Statement of Changes in Stockholder's Equity
• Consolidated Statement of Cash Flows
• Notes to Consolidated Financial Statements

1. Reports on Form 8-K

November 20, 2002 - an 8-K was filed containing the Terms Agreement, together with the Distribution Agreement, and Form of 3.751% Note due 2007 in connection with the Registrant's Registration Statement (Form S-3), Registration No. 333-97047.

1. Exhibits

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

I, James S. Beard, President of the Company, certify that:

1. I have reviewed this annual report on Form 10-K of Caterpillar Financial Services Corporation;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report.
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

1. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
2. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
3. presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

1. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons fulfilling the equivalent function):

1. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
2. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

1. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

I, James A. Duensing, Principal Financial Officer of the Company, certify that:

1. I have reviewed this annual report on Form 10-K of Caterpillar Financial Services Corporation;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report.
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

1. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
2. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

1. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons fulfilling the equivalent function):

1. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
2. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

To the Board of Directors and Stockholder of
         Caterpillar Financial Services Corporation:

In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) on page 11 present fairly, in all material respects, the financial position of Caterpillar Financial Services Corporation and its subsidiaries at December 31, 2002, 2001, and 2000 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evide nce supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PRICEWATERHOUSECOOPERS LLP

Chicago, Illinois
January 23, 2003

AT DECEMBER 31, (Dollars in Millions, except share data)

FOR THE YEARS ENDED DECEMBER 31, (Dollars in Millions)

FOR THE YEARS ENDED DECEMBER 31, (Dollars in Millions)

FOR THE YEARS ENDED DECEMBER 31, (Dollars in Millions)

All short-term investments, which consist primarily of highly liquid investments with original maturities of less than three months, are considered to be cash equivalents.

(Dollars in Millions)

• Retail finance revenue on finance leases, installment sale contracts and governmental (non-federal) tax leases is recognized over the term of the contract at a constant rate of return on the scheduled outstanding principal balance.
• Rental revenue on operating leases is recorded in the period earned.
• Wholesale finance revenue on dealer inventory, rental fleets, rental stores, and on short-term dealer receivables is recognized based on the daily balance of wholesale receivables outstanding and the applicable effective interest rate.
• Loan origination and commitment fees over five hundred dollars are deferred and then amortized to finance revenue using the interest method over the life of the finance receivables.

Debt issuance costs are capitalized and amortized to interest expense over the term of the debt issue.

The five-year facility expires in September 2006; the 364-day facility expires in September 2003.

Long-term borrowings outstanding at December 31 were comprised of the following: