-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VWwms3OpzS4B7Q3xBOJnQ3lEguHyjxkESM4K1j70HH+QpWdctWOAvwTOEr/xfJek SssQiMDKDaBfVACHBFJSvg== 0000020388-97-000012.txt : 19970421 0000020388-97-000012.hdr.sgml : 19970421 ACCESSION NUMBER: 0000020388-97-000012 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970417 ITEM INFORMATION: Other events FILED AS OF DATE: 19970418 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIT GROUP HOLDINGS INC /DE/ CENTRAL INDEX KEY: 0000020388 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 132994534 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01861 FILM NUMBER: 97583287 BUSINESS ADDRESS: STREET 1: 1211 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2125361950 MAIL ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: CIT FINANCIAL CORP/OLD/ DATE OF NAME CHANGE: 19860512 8-K 1 PRESS RELEASE FOR FIRST QUARTER 1997 EARNINGS SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) April 17, 1997 -------------- The CIT Group Holdings, Inc. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-1861 13-2994534 - ------------------------------------------------------------------------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 1211 Avenue of the Americas New York, New York 10036 - ------------------------------------------------------------------------------- Registrant's telephone number, including area code (212) 536-1950 -------------- - ------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events. ------------- See attached press release. SIGNATURES 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 hereunto duly authorized. THE CIT GROUP HOLDINGS, INC. ---------------------------- (Registrant) By /s/ JOSEPH M. LEONE ---------------------------- Joseph M. Leone Executive Vice President and Chief Financial Officer Dated: April 17, 1997 [Logo of The CIT Group, Inc.] Contact: Joseph M. Leone Chief Financial Officer (201) 740-5752 FROM: THE CIT GROUP HOLDINGS, INC. 1211 AVENUE OF THE AMERICAS NEW YORK, NY 10036 FOR IMMEDIATE RELEASE - --------------------- THE CIT GROUP REPORTS FIRST QUARTER 1997 EARNINGS OF ---------------------------------------------------- $70.1 MILLION, UP 17.4 PERCENT OVER 1996 FIRST QUARTER; ------------------------------------------------------ NEW YORK, NEW YORK, April 17, 1997 --- The CIT Group Holdings, Inc., one of the nation's largest commercial and consumer lending organizations, today reported net income of $70.1 million for the first quarter of 1997, a 17.4% increase from the $59.8 million reported for 1996. The improvement was the result of an increase in average financing and leasing assets and corresponding growth in net finance income as well as higher fees and other income. "CIT's first quarter results were outstanding and I am pleased by our solid overall performance, including sustained credit quality," said Albert R. Gamper, Jr., president and chief executive officer. "Our success is the product of our business diversification strategies. Despite upward pressure on interest rates and heightened competition, we are optimistic about our prospects for the remainder of 1997." Financial highlights for 1997: o Return on average financing and leasing assets ("AEA") for the first quarter of 1997 was 1.60%, up from 1.49% for 1996. o Earning assets, primarily comprised of finance receivables, operating lease equipment and consumer finance receivables held for sale, totaled $19.1 billion at March 31, 1997, up 2.9% from $18.6 billion at year end 1996. The increase was a result of strong consumer loan and small to medium ticket equipment receivable originations, additions to the operating lease portfolio and a seasonal rise in factoring receivables. o Net finance income rose to $214.0 million (4.87% of AEA) in the first quarter of 1997 compared to $195.4 million (4.86% of AEA) in the first quarter of 1996. The improvements reflect a 9.5% increase in AEA and lower borrowing costs, offset by slightly lower yields. o Fees and other income totaled $57.7 million in the first quarter of 1997, up from $52.7 million in 1996. The increase reflects higher gains from equipment sales and venture capital investment transactions, offset by reduced securitization activity. o Salaries and general operating expenses for the first quarter of 1997 totaled $99.9 million compared to $95.9 million for the first quarter of 1996, a 4.2% increase. As a percentage of AEA, salaries and general operating expenses declined to 2.27% from 2.39% in 1996. o Net credit losses during the first quarter of 1997 were $25.7 million, 0.60% of average finance receivables, compared to $25.4 million, 0.64% of average finance receivables for the first quarter of 1996. o Depreciation on operating lease equipment for the first quarter of 1997 was $32.1 million compared to $27.5 million in 1996 as a result of growth in the operating lease portfolio. o The effective income tax rate for the first quarter of 1997 declined to 36.7% from 38.3% for the first quarter of 1996 due to lower state and local taxes. o Finance receivables on nonaccrual status declined to $97.8 million (0.57% of finance receivables) at March 31, 1997 from $119.6 million (0.70% of finance receivables) at the end of 1996. Finance receivables past due 60 days or more also decreased during the first -2- quarter to $289.2 million (1.70% of finance receivables) at March 31, 1997, from $292.3 million (1.72% of finance receivables) at December 31, 1996. o Assets received in the settlement of loans were $46.9 million at March 31, 1997 and $47.9 million at year end 1996. o Total nonperforming assets, comprised of finance receivables on nonaccrual status and assets received in satisfaction of loans, as a percentage of finance receivables, were 0.85% at March 31, 1997 down from 0.99% at December 31, 1996. o The reserve for credit losses increased to $222.0 million at March 31, 1997 from $220.8 million at December 31, 1996 and represented 1.30% of finance receivables for both periods. o The ratio of total debt to stockholders' equity, including the recently issued redeemable preferred capital securities of subsidiary, was 6.25 to 1 at March 31, 1997 compared to 7.04 to 1 at December 31, 1996. The CIT Group Holdings, Inc. is owned 80 percent by Dai-Ichi Kangyo Bank, Limited, one of the largest banks in the world, and 20 percent by The Chase Manhattan Corporation, the largest bank holding company in the United States. (SEE ATTACHED TABLES FOR ADDITIONAL FINANCIAL DATA) # # # -3- THE CIT GROUP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (DOLLAR AMOUNTS IN MILLIONS) THREE MONTHS ENDED MARCH 31, 1997 % TO AEA 1996 % TO AEA --------- -------- --------- -------- Finance income $ 437.1 9.87%* $ 402.6 9.97%* Interest expense 223.1 5.00* 207.2 5.11 * --------- ---- --------- ---- Net finance income 214.0 4.87 195.4 4.86 Fees and other income 57.7 1.31 52.7 1.31 --------- ---- --------- ---- Operating revenue 271.7 6.18 248.1 6.17 --------- ---- --------- ---- Salaries and general operating expenses 99.9 2.27 95.9 2.39 Provision for credit losses 27.0 0.61 27.8 0.69 Depreciation on operating lease equipment 32.1 0.73 27.5 0.68 Minority interest in subsidiary holding solely parent company debentures 1.9 0.04 - - --------- ---- ---------- ---- Operating expenses 160.9 3.65 151.2 3.76 --------- ---- --------- ---- Income before provision for income taxes 110.8 2.53 96.9 2.41 Provision for income taxes 40.7 0.93 37.1 0.92 --------- ---- --------- ---- Net income $ 70.1 1.60% $ 59.8 1.49% ========= ==== ========= ==== Average financing and leasing assets (AEA) $17,590.1 $16,065.6 * Excludes interest income and interest expense relating to interest-bearing deposits. THE CIT GROUP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (DOLLAR AMOUNTS IN MILLIONS) MARCH 31, DECEMBER 31, 1997 1996 ---------- ------------ ASSETS - ------ FINANCING AND LEASING ASSETS Loans Commercial $ 9,996.4 $10,195.6 Consumer 3,186.0 3,239.0 Lease receivables 3,834.0 3,562.0 --------- --------- Finance receivables 17,016.4 16,996.6 Reserve for credit losses (222.0) (220.8) ---------- --------- Net finance receivables 16,794.4 16,775.8 Operating lease equipment, net 1,501.9 1,402.1 Consumer finance receivables held for sale 539.8 116.3 CASH AND CASH EQUIVALENTS 176.9 103.1 OTHER ASSETS 571.7 535.2 --------- --------- TOTAL ASSETS $19,584.7 $18,932.5 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ DEBT Commercial paper $ 6,143.1 $ 5,827.0 Variable rate senior notes 3,611.5 3,717.5 Fixed rate senior notes 4,829.9 4,761.2 Subordinated fixed rate notes 300.0 300.0 --------- --------- Total debt 14,884.5 14,605.7 Credit balances of factoring clients 1,193.8 1,134.1 Accrued liabilities and payables 598.8 594.0 Deferred Federal income taxes 524.6 523.3 --------- --------- Total liabilities 17,201.7 16,857.1 Redeemable preferred capital securities of subsidiary holding solely parent company debentures 250.0 - STOCKHOLDERS' EQUITY Common stock - authorized, issued and outstanding - 1,000 shares 250.0 250.0 Paid-in capital 573.3 573.3 Unrealized gain on investment securities, net of taxes 8.5 - Retained earnings 1,301.2 1,252.1 --------- --------- Total stockholders' equity 2,133.0 2,075.4 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $19,584.7 $18,932.5 ========= ========= -----END PRIVACY-ENHANCED MESSAGE-----