-----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, RA4roKKEh7eh534F2VqELdeZp9vCxY9oFMsB+oQq/hURCdGA7z9QSyClYKpZAAd0 jI0B+dMW0Z0jH7L6u2/fcg== 0000891092-00-000369.txt : 20000504 0000891092-00-000369.hdr.sgml : 20000504 ACCESSION NUMBER: 0000891092-00-000369 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000427 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIT GROUP INC 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: SEC FILE NUMBER: 001-01861 FILM NUMBER: 617525 BUSINESS ADDRESS: STREET 1: 1211 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2125361390 MAIL ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: CIT GROUP HOLDINGS INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CIT FINANCIAL CORP/OLD/ DATE OF NAME CHANGE: 19860512 8-K 1 FORM 8-K 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 27, 2000 -------------- The CIT Group, 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) 536-1390 -------------- - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events. See the attached press releases, which are incorporated herein by reference, regarding: 1. The 2000 first quarter earnings, filed as Exhibit 99.1; and 2. The declaration of a dividend for the quarter ending March 31, 2000 of $.10 per share, payable on May 31, 2000 to holders of record at the close of business on May 10, 2000, filed as Exhibit 99.2. -2- Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. 99.1 Press Release, dated April 27, 2000, regarding the 2000 first quarter earnings. 99.2 Press Release, dated April 27, 2000, regarding declaration of a dividend for the quarter ending March 31, 2000. -3- 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, INC. ---------------------------- (Registrant) By: /s/ JOSEPH M. LEONE ---------------------------- Joseph M. Leone Executive Vice President and Chief Financial Officer Dated: April 27, 2000 -4- EX-99.1 2 PRESS RELEASE Exhibit 99.1 [The CIT Group, Inc. Logo] Contact: James J. Egan, Jr. Executive Vice President Investor Relations (973) 535-5911 FROM: THE CIT GROUP, INC. 1211 AVENUE OF THE AMERICAS NEW YORK, NY 10036 FOR IMMEDIATE RELEASE - --------------------- CIT ANNOUNCES HIGHLIGHTS OF FIRST QUARTER 2000: o Net Income $143.9 Million up 56.6% from 1999, EPS $0.55 Per Diluted Share o Managed Assets Exceed $53 Billion on Strong Business Volumes o Strong Non-Spread Revenues o Realized Integration Savings of Approximately $100 Million Annualized NEW YORK, NEW YORK, April 27, 2000 --- The CIT Group, Inc. (NYSE: CIT, TSE: CIT.U) today announced first quarter 2000 net income of $143.9 million, up 56.6% from $91.9 million reported for the same period of 1999. Earnings per diluted share for the first quarter were $0.55, compared to $0.57 for the first quarter of last year. Before the amortization of goodwill, earnings per diluted share were $0.62, compared to $0.58 for the same period of 1999. The first quarter 2000 earnings reflect growth from our 1999 acquisition activities, continued strong originations, excellent fee and other income as well as expense savings related to our operational integrations. "Revenue growth and new business volume were good. The higher interest rate environment and competitive conditions put modest pressure on lending spreads; however, strong fees and other non-spread revenues offset these factors. Fee generation from our commercial lending businesses and gains in our venture capital business were particularly strong," said Albert R. Gamper Jr., CIT Chairman, President and CEO. "The acquisitions we made in 1999 have added diversity to our origination platforms. While we have made real progress integrating operations, we recognize that considerable work is still ahead of us and additional expense reductions will be realized. In addition, we initiated programs to shed non-strategic businesses. I am especially proud of the commitment CIT employees have made to our first quarter accomplishments." Financial Highlights: Total managed assets increased to $53.1 billion at March 31, 2000, up 3.3% from $51.4 billion at year end, and $27.1 billion at March 31, 1999. New business volume was $13.2 billion, versus $6.4 billion during the first quarter of 1999. Commercial financing and leasing assets grew to $37.6 billion, up from $19.1 billion a year ago and a 5.8% increase from year end 1999. Commercial managed assets were $45.6 billion at March 31, 2000 compared to $44.0 billion at December 31, 1999. Consumer managed assets were $7.4 billion at March 31, 2000 compared to $7.3 billion at December 31, 1999, and were down from $7.9 billion a year ago reflecting our decision to exit certain lower return product lines. Net finance income improved to $656.9 million in the first quarter from $268.2 million in the same period last year. First quarter net finance income as a percentage of average earning assets was 6.74%, compared to 4.75% in the first quarter of 1999 and 5.80% in the fourth quarter of 1999 as a result of product mix changes. First quarter net finance margin as a percentage of average earning assets was 3.58%, up from 3.51% in the fourth quarter of 1999 and down from 3.75% in the first quarter of 1999. The margin improvement from last quarter largely reflects the full-quarter impact of the higher-yielding Vendor Technology 2 portfolio. The decline from the first quarter of last year results from the combination of a greater proportion of operating leases, higher leverage, and higher short term interest rates in a competitive environment. Non-spread revenues for the first quarter of 2000 were $238.2 million, compared to $64.7 million for the first quarter of 1999. The increase reflects successes in our initiatives to broaden our revenue sources. Fees and other income grew to $121.4 million from $30.9 million last year, reflecting syndication and other non-spread revenues from Vendor Technology Finance and Structured Finance. Factoring commissions grew $14.5 million to $38.5 million over the prior year period due to internal growth and 1999 acquisitions. Venture capital gains were $37.5 million, reflecting the harvesting of investments made in prior years. Securitization gains were $19.0 million, or 8.2% of pretax income, during the quarter, below our 15% target due to a lower level of receivables being securitized. Salaries and general operating expenses for the first quarter of 2000 totaled $268.2 million, compared with $105.8 million for the prior year, reflecting increased personnel and facilities due to the 1999 acquisitions and normal expense increases. The efficiency ratio increased to 46.0% from 38.9% a year ago. Salaries and general operating expenses as a percentage of average managed assets increased to 2.15% for the period ended March 31, 2000 from 1.68% for the period ended March 31, 1999, reflecting the effect of our 1999 acquisitions. However, the first quarter expenses include annualized run rate savings of approximately $100 million (of our target of $150 million) from pre-acquisition levels and we anticipate that additional integration cost savings will be realized later in 2000. Headcount was 7,650 at quarter end, down 600 from year end 1999. The provision for credit losses was $61.6 million in the 2000 first quarter, up from $21.9 million in the prior year reflecting higher charge-off levels and growth in the portfolios. First quarter net charge-offs were $53.0 million, 0.67% of 3 average finance receivables, up from $20.9 million, 0.42%, for the same period last year as a result of product mix changes due to the acquisitions. At March 31, 2000, the reserve for credit losses was $476.2 million, up from $446.9 million at December 31, 1999 and $265.8 million at March 31, 1999. As a percentage of finance receivables, the reserve for credit losses was 1.43% at March 31, 2000 compared to 1.44% and 1.32% at December 31, 1999 and March 31, 1999, respectively. Commercial past dues as a percentage of finance receivables were 2.65% at March 31, 2000, up from 2.42% at year end 1999 and 1.36% at March 31, 1999, reflecting higher delinquency levels in the acquired portfolios as well as increases due to the restructuring of our collection operations. Consumer past dues, as a percentage of finance receivables, were 4.32% at March 31, 2000 compared to 4.62% at December 31, 1999 and 3.57% at March 31, 1999. The decrease from December 31, 1999 reflects improvements across most product lines. The increased delinquency from March 31, 1999 is primarily attributable to the liquidation of certain consumer product lines. CIT is a leading diversified finance company offering vendor, equipment, commercial, factoring, consumer and structured financing capabilities. CIT operates extensively in the United States and Canada with strategic locations in Europe, Latin and South America, and the Pacific Rim. CIT has been in business since 1908 and is recognized as a leader in many of the markets it serves. For more information on CIT, visit the website at www.cit.com. (SEE ATTACHED TABLES FOR ADDITIONAL FINANCIAL DATA). 4 THE CIT GROUP, INC. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (Dollars in Millions, except per share amounts)
For the Quarters Ended March 31, 2000 1999 ---------- ---------- Finance income $ 1,228.8 $ 541.5 Interest expense 571.9 273.3 --------- ---------- Net finance income 656.9 268.2 Depreciation on operating lease equipment 307.8 56.1 --------- ---------- Net finance margin 349.1 212.1 Fees and other income 238.2 64.7 --------- ---------- Operating revenue 587.3 276.8 --------- ---------- Salaries and general operating expenses 268.2 105.8 Provision for credit losses 61.6 21.9 Goodwill amortization 20.5 3.2 Minority interest in subsidiary trust holding solely debentures of the Company 4.8 4.8 --------- ---------- Operating expenses 355.1 135.7 --------- ---------- Income before provision for income taxes 232.2 141.1 Provision for income taxes 88.3 49.2 --------- ---------- Net income $ 143.9 $ 91.9 ========== ========== Basic net income per share $ 0.55 $ 0.57 Weighted average shares outstanding 262,931,435 161,166,060 Diluted net income per share $ 0.55 $ 0.57 Weighted average shares outstanding 263,620,102 162,421,027
5 THE CIT GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in Millions)
March 31, December 31, 2000 1999 ----------- ------------ Assets - ------ Financing and leasing assets Loans and leases Commercial $ 29,211.9 $ 27,119.2 Consumer 4,127.2 3,887.9 ----------- ----------- Finance receivables 33,339.1 31,007.1 Reserve for credit losses (476.2) (446.9) ----------- ----------- Net finance receivables 32,862.9 30,560.2 Operating lease equipment, net 6,495.6 6,125.9 Finance receivables held for sale 2,762.5 3,123.7 Cash and cash equivalents 388.8 1,073.4 Goodwill 1,830.1 1,850.5 Other assets 2,310.4 2,347.4 ----------- ----------- Total assets $ 46,650.3 $ 45,081.1 =========== =========== Liabilities and Stockholders' Equity - ------------------------------------ Debt Commercial paper $ 10,618.1 $ 8,974.0 Variable rate senior notes 7,914.7 7,147.2 Fixed rate senior notes 18,180.6 19,052.3 Subordinated fixed rate notes 200.0 200.0 ----------- ----------- Total debt 36,913.4 35,373.5 Credit balances of factoring clients 2,256.7 2,200.6 Accrued liabilities and payables 1,020.1 1,191.8 Deferred federal income taxes 558.5 510.8 ----------- ----------- Total liabilities 40,748.7 39,276.7 Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely debentures of the Company 250.0 250.0 Stockholders' equity Common stock 2.7 2.7 Paid-in capital 3,524.7 3,521.8 Retained earnings 2,214.9 2,097.6 Accumulated other comprehensive income 0.1 2.8 Treasury stock at cost (90.8) (70.5) ----------- ----------- Total stockholders' equity 5,651.6 5,554.4 ----------- ----------- Total liabilities and stockholders' equity $ 46,650.3 $ 45,081.1 =========== ===========
6 THE CIT GROUP, INC. AND SUBSIDIARIES (Amounts in Millions) MANAGED ASSETS BY STRATEGIC BUSINESS UNIT - ----------------------------------------- December 1999 managed asset balances have been adjusted to conform to the current quarter presentation
At March 31, At December 31, At March 31, 2000 1999 1999 ------------ --------------- ------------ Equipment Financing: Finance receivables $ 11,081.1 $ 10,899.3 $ 8,456.4 Operating lease equipment, net 1,170.9 1,066.2 862.9 ----------- ----------- ----------- Total 12,252.0 11,965.5 9,319.3 ----------- ----------- ----------- Capital Finance: Finance receivables 1,638.3 1,838.0 1,603.3 Operating lease equipment, net 3,187.0 2,931.8 2,289.5 Liquidating portfolio (1) (2) 259.7 281.4 428.1 ----------- ----------- ----------- Total 5,085.0 5,051.2 4,320.9 ----------- ----------- ----------- Total Equipment Financing and Leasing Segment 17,337.0 17,016.7 13,640.2 ----------- ----------- ----------- Vendor Technology Finance: Finance receivables 8,568.6 7,488.9 -- Operating lease equipment, net 2,091.0 2,108.8 -- ----------- ----------- ----------- Total Vendor Technology Finance Segment 10,659.6 9,597.7 -- ----------- ----------- ----------- Structured Finance: Finance receivables 2,014.4 1,933.9 -- Operating lease equipment, net 28.8 -- -- ----------- ----------- ----------- Total Structured Finance Segment 2,043.2 1,933.9 -- ----------- ----------- ----------- Commercial Services 4,482.0 4,165.1 2,863.5 Business Credit 3,103.8 2,837.0 2,602.9 ----------- ----------- ----------- Total Commercial Finance Segment 7,585.8 7,002.1 5,466.4 ----------- ----------- ----------- Total Commercial Segments 37,625.6 35,550.4 19,106.6 ----------- ----------- ----------- Home equity 2,408.4 2,215.4 2,342.8 Manufactured housing 1,687.1 1,666.9 1,516.6 Recreational vehicles 437.0 361.2 841.6 Liquidating portfolio (3) 439.1 462.8 432.1 ----------- ----------- ----------- Total Consumer Segment 4,971.6 4,706.3 5,133.1 ----------- ----------- ----------- Other - Equity Investments 160.7 137.3 84.6 ----------- ----------- ----------- Total Financing and Leasing Portfolio Assets 42,757.9 40,394.0 24,324.3 ----------- ----------- ----------- Finance receivables previously securitized: Commercial 7,963.2 8,471.5 -- Consumer 1,878.8 1,987.0 1,870.0 Consumer liquidating portfolio (3) 549.6 580.8 910.3 ----------- ----------- ----------- Total 10,391.6 11,039.3 2,780.3 ----------- ----------- ----------- Total Managed Assets $ 53,149.5 $ 51,433.3 $ 27,104.6 =========== =========== ===========
(1) Consists primarily of ocean going maritime and project finance. Capital Finance discontinued marketing to these sectors in 1997. (2) Operating lease equipment, net, of $17.9 million, $19.1 million and $25.8 million are included in the liquidating portfolio for the quarter ended March 31, 2000, the year ended December 31, 1999 and the quarter ended March 31, 1999, respectively. (3) In 1999, we decided to exit the recreational boat and wholesale loan product lines. For the Quarters Ended March 31, FEES AND OTHER INCOME 2000 1999 - --------------------- ------ ------ Fees and other income $121.4 $30.9 Factoring commissions 38.5 24.0 Gains on venture capital investments 37.5 -- Gains on sales of leasing equipment 21.8 9.2 Gains on securitizations 19.0 0.6 ------ ----- $238.2 $64.7 ====== ===== 7 THE CIT GROUP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA
Selected Data and Ratios For the Quarters Ended March 31, 2000 1999 -------------- ------------ Profitability Net income per diluted share $ 0.55 $ 0.57 Net income per diluted share, excluding goodwill amortization $ 0.62 $ 0.58 Book value per common share $ 21.45 $ 17.12 Return on average stockholders' equity 10.3% 13.5% Return on average tangible stockholders' equity(1) 15.3% 14.6% Return on AEA 1.48% 1.63% Return on AMA(2) 1.16% 1.46% Other Net finance income as a percentage of AEA 6.74% 4.75% Net finance margin as a percentage of AEA 3.58% 3.75% Efficiency ratio(3) 46.0% 38.9% Salaries and general operating expenses as a percentage of AMA(2)(3) 2.15% 1.68% Net credit losses as a percentage of average: Total finance receivables 0.67% 0.42% Commercial finance receivables 0.55% 0.22% Consumer finance receivables 1.48% 1.17% Volume securitized $ 680.0 $ 470.5 Gains on Securitizations as a percentage of pretax income 8.18% 0.43% Average Balances Average Stockholders' Equity $ 5,597.7 $ 2,733.4 Average Finance Receivables $31,612.6 $19,904.3 Average Earning Assets $38,968.1 $22,603.8 Average Managed Assets $49,793.2 $25,177.5
At March 31, At December 31, At March 31, 2000 1999 1999 ----------------- -------------------- ----------------- Credit Quality 60+ days contractual delinquency as a percentage of finance receivables Commercial 2.65% 2.42% 1.36% Consumer 4.32% 4.62% 3.57% Total 2.85% 2.71% 1.82% 60+ days managed financial asset contractual delinquency as a percentage of managed financial assets(4) Commercial 3.22% 2.72% 1.36% Consumer 3.26% 3.49% 2.84% Total 3.23% 2.84% 1.85% Total non-performing assets as a percentage of finance receivables(5) 2.46% 2.05% 1.41% Total non-performing managed assets as a percentage of managed financial assets(4) 2.65% 2.23% 1.52% Reserve for credit losses as a percentage of finance receivables 1.43% 1.44% 1.32% Capital and Leverage Debt (net of overnight deposits) to stockholders' equity(6) 6.23x 5.96x 6.27x Debt (net of overnight deposits) to tangible stockholders' equity(1) (6) 9.04x 8.75x 6.74x
(1) Tangible stockholders' equity excludes goodwill. (2) "AMA" or "Average Managed Assets", represents the sum of average earning assets, which are net of credit balances of factoring clients, and the average of commercial and consumer finance receivables previously securitized and currently managed by the Company. (3) Amortization of goodwill is excluded from these ratios. (4) Managed financial assets excludes operating leases and Equity Investments. (5) Total non-performing assets reflect both commercial and consumer finance receivables on non-accrual status and assets received in satisfaction of loans. (6) Total debt excludes, and stockholders' equity includes $250.0 million of Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely debentures of the Company. 8 EX-99.2 3 PRESS RELEASE Exhibit 99.2 [The CIT Group, Inc. Logo] Contact: Joan Russo Vice President Corporate Communications (973) 740-5437 joan.russo@cit.com FROM: THE CIT GROUP, INC. 650 CIT DRIVE LIVINGSTON, NEW JERSEY 07039 FOR IMMEDIATE RELEASE THE CIT GROUP, INC. DECLARES REGULAR QUARTERLY DIVIDEND ------------------------------------------------------- LIVINGSTON, NEW JERSEY, April 27, 2000 --- The Board of Directors of The CIT Group, Inc. (NYSE:CIT; TSE:CIT.U) declared a regular quarterly cash dividend of $.10 per common share for shareholders of record on May 10, 2000. The cash dividend is payable on May 31, 2000. CIT is one of the largest commercial and consumer financing companies in the world. Founded in 1908, the Company (www.cit.com) provides diversified financing products and services to a broad range of customers through strategically focused business units. # # # -----END PRIVACY-ENHANCED MESSAGE-----