-----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, TGbPrcUesFrGdd+rIKqhUewix6mkDfgJEOoVc9qvxPRPrwS1KXSL8mrulKCZJxaX U5NJXkqibqmsci/39JUTcg== /in/edgar/work/20000728/0000891092-00-000644/0000891092-00-000644.txt : 20000921 0000891092-00-000644.hdr.sgml : 20000921 ACCESSION NUMBER: 0000891092-00-000644 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000727 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIT GROUP INC CENTRAL INDEX KEY: 0000020388 STANDARD INDUSTRIAL CLASSIFICATION: [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: 681528 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 0001.txt 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) July 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 second quarter earnings, filed as Exhibit 99.1; and 2. The declaration of a dividend for the quarter ending June 30, 2000 of $.10 per share, payable on August 31, 2000 to holders of record at the close of business on August 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 July 27, 2000, regarding the 2000 second quarter earnings. 99.2 Press Release, dated July 27, 2000, regarding declaration of a dividend for the quarter ending June 30, 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: July 27, 2000 -4- EX-99.1 2 0002.txt 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 - --------------------- NEW YORK, NEW YORK, July 27, 2000 -- The CIT Group, Inc. (NYSE: CIT, TSE: CIT.U) today announced second quarter 2000 record net income of $151.4 million, up 57.2% from $96.3 million reported for the same period of 1999. Six-month earnings totaled $295.3 million, up from $188.2 million in 1999. Earnings per diluted share for the second quarter were $0.58, compared to $0.59 for the second quarter of last year. Six-month earnings per diluted share were $1.12, compared to $1.16 for the same period of 1999. Before the amortization of goodwill, second quarter 2000 earnings per diluted share improved to $0.66 from $0.62 for the same period of 1999, and improved to $1.28 from $1.21 for the six months ended June 30, 2000 and 1999, respectively. The second quarter 2000 net income reflects growth from our 1999 acquisition activities, solid fee and other income generation as well as considerable expense savings related to operational integrations. "The second quarter results reflect the continuation of progress toward our performance goals," said Albert R. Gamper Jr., CIT Chairman, President and CEO. "We have continued to focus on our core competencies of credit and expense management. As a result, we have achieved our original run rate $150 million expense target, but continue to set our sights higher. While we still have work ahead of us to achieve our objectives, I have confidence in the people of CIT who have consistently met these challenges. At a time of rising rates and signs of slowing economic activities, the broad diversification of CIT is proving to be very beneficial. However, in light of the net interest margins in the first half of 2000 being lower than our expectations, continued uncertainty regarding the interest rate environment and lower securitization activity, we are revising our EPS estimate for the year 2000 to a range of $2.37-$2.43." Financial Highlights: Total managed assets increased to $53.4 billion at June 30, 2000, up 3.8% from $51.4 billion at year-end, and $28.4 billion at June 30, 1999. The net increase in managed assets of $0.2 billion over March 31, 2000 was achieved after the sales of non-strategic portfolios amounting to approximately $0.5 billion during the quarter. Commercial managed assets were $45.9 billion at June 30, 2000, compared to $44.0 billion at December 31, 1999. Consumer managed assets were $7.2 billion at June 30, 2000, compared to $7.3 billion at December 31, 1999, and were down from $8.1 billion a year ago, reflecting our decision to exit certain lower return product lines. Total portfolio assets increased to $42.6 billion from $40.4 billion at year-end 1999 and $25.3 billion at June 30, 1999. New business volume, excluding factoring, was $6.1 billion, an increase from $2.9 billion for the June 30, 1999 quarter due primarily to the 2 Newcourt acquisition, but down from $6.8 billion during the first quarter of 2000 due to lower consumer and equipment portfolio acquisition activity in the second quarter. Net finance margin improved to $359.2 million in the second quarter from $349.1 million for the first quarter of 2000 and $214.4 million in the second quarter last year. Second quarter net finance margin as a percentage of average earning assets was 3.53%, down from 3.58% for the first quarter of 2000 and 3.70% in the second quarter of 1999. The declines were principally due to higher short-term interest rates and increased borrowing costs. Non-spread revenues for the second quarter of 2000 were $232.3 million, down slightly from $238.2 million for the first quarter of 2000, compared to $74.8 million for the second quarter of 1999. As a percent of average earning assets, non-spread revenues increased to 2.28% for the second quarter of 2000 from 1.29% last year, but are down from 2.45% in the first quarter of 2000. The increase from the prior year reflects the broadened and more diversified revenue sources from 1999 acquisitions. The decrease from the first quarter reflects venture capital gains of $10.6 million, down from $37.5 million in the first quarter. Fees and other income grew to $121.1 million in the second quarter of 2000 from $20.4 million last year, reflecting syndication and other non-spread revenues in Vendor Technology Finance and Structured Finance. Gains from equipment sales were $39.4 million, up $18.7 million over the prior year quarter due to the larger asset base. Factoring commissions grew 31.7% to $38.2 million over the prior year period. Securitization gains were $23.0 million, or 9.4% of pretax income during the quarter. 3 Salaries and general operating expenses for the second quarter of 2000 totaled $257.5 million, down $10.7 million from the first quarter of 2000 as we continued to realize benefits of integration. Accordingly, the efficiency ratio improved to 43.9% for the second quarter from 46.0% for the first quarter 2000. Salaries and general operating expenses as a percentage of average managed assets declined to 2.03% for the period ended June 30, 2000 from 2.15% for the first quarter of 2000. This compares to 1.66% for the period ended June 30, 1999, reflecting the effect of our 1999 acquisitions. Second quarter expense levels reflect annualized run rate savings of approximately $150 million from pro-forma combined pre-acquisition levels. Headcount was 7,400 at quarter end, down 855 and 250 from year-end 1999 and the first quarter, respectively. The provision for credit losses was $64.0 million in the 2000 second quarter, up from $61.6 million in the first quarter of 2000. Second quarter net charge-offs were $60.7 million, 0.73% of average finance receivables, up from $53.0 million, 0.67%, in the first quarter of 2000. At June 30, 2000, the reserve for credit losses was $460.3 million, up from $446.9 million at December 31, 1999. As a percentage of finance receivables, the reserve for credit losses was 1.39% at June 30, 2000 compared to 1.43% at March 31, 2000. The decline reflects changes in portfolio mix. Total past dues, as a percentage of finance receivables, declined to 2.80% at June 30, 2000 from 2.85% at March 31, 2000. Commercial past dues as a percentage of finance receivables improved to 2.59% at June 30, 2000 from 2.65% at March 31, 2000. Consumer past dues, as a percentage of finance receivables, were 4.33% at June 30, 2000, relatively unchanged from 4.32% at March 31, 2000. Total managed past dues, 4 as a percentage of managed financial assets, declined to 3.11% at June 30, 2000 from 3.23% at March 31, 2000. Goodwill related to the Newcourt acquisition was increased by approximately $200 million. The adjustment to the original purchase price allocations includes refinements to the fair value of certain retained interests in the securitized portfolios, particularly in the trucking industry, as well as additional charges related to integration activities. As a result, goodwill, net of amortization, for the first half of 2000, increased $159.3 million, or 8.6%, from December 31, 1999. Other Recent Events: We are extremely pleased with the recognition of being added to the S&P 500 index, which broadens our shareholder base and recognizes the breadth and strength of CIT. 5 Forward-Looking Statements: Certain statements contained in this document are forward-looking statements concerning our future earnings, financial condition and operations. These statements involve risks and uncertainties that may be difficult to predict. Forward-looking statements are based upon management's estimates of future economic conditions, fair values and future costs, using currently available information. Therefore, actual results may differ materially from those expressed or implied in those statements, due to various risks and uncertainties identified more fully in our 1999 Form 10-K. About CIT: 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). 6 THE CIT GROUP, INC. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (In Millions, except per share amounts)
For the Quarter For the Six Months Ended June 30, Ended June 30, 2000 1999 2000 1999 ---------- -------- ---------- ---------- (unaudited) Finance income $ 1,301.8 $ 554.4 $ 2,530.6 $ 1,095.9 Interest expense 630.9 280.8 1,202.8 554.1 ---------- -------- ---------- ---------- Net finance income 670.9 273.6 1,327.8 541.8 Depreciation on operating lease equipment 311.7 59.2 619.5 115.3 ---------- -------- ---------- ---------- Net finance margin 359.2 214.4 708.3 426.5 Fees and other income 232.3 74.8 470.5 139.5 ---------- -------- ---------- ---------- Operating revenue 591.5 289.2 1,178.8 566.0 ---------- -------- ---------- ---------- Salaries and general operating expenses 257.5 108.0 525.7 213.8 Provision for credit losses 64.0 23.8 125.6 45.7 Goodwill amortization 20.6 5.0 41.1 8.2 Minority interest in subsidiary trust holding solely debentures of the Company 4.8 4.8 9.6 9.6 ---------- -------- ---------- ---------- Operating expenses 346.9 141.6 702.0 277.3 ---------- -------- ---------- ---------- Income before provision for income taxes 244.6 147.6 476.8 288.7 Provision for income taxes 93.2 51.3 181.5 100.5 ---------- -------- ---------- ---------- Net income $ 151.4 $ 96.3 $ 295.3 $ 188.2 ========== ======== ========== ========== Basic net income per share $ 0.58 $ 0.60 $ 1.13 $ 1.17 Weighted average shares outstanding 261.6 160.9 262.3 161.0 Diluted net income per share $ 0.58 $ 0.59 $ 1.12 $ 1.16 Weighted average shares outstanding 262.6 162.1 263.1 162.3
7 THE CIT GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in Millions)
June 30, December 31, 2000 1999 ----------- ------------ (unaudited) Assets - ------ Financing and leasing assets Loans and leases Commercial $ 29,098.2 $ 27,119.2 Consumer 4,023.4 3,887.9 ----------- ----------- Finance receivables 33,121.6 31,007.1 Reserve for credit losses (460.3) (446.9) ----------- ----------- Net finance receivables 32,661.3 30,560.2 Operating lease equipment, net 6,427.6 6,125.9 Finance receivables held for sale 2,874.9 3,123.7 Cash and cash equivalents 845.6 1,073.4 Goodwill 2,009.8 1,850.5 Other assets 2,270.2 2,347.4 ----------- ----------- Total assets $ 47,089.4 $ 45,081.1 =========== =========== Liabilities and Stockholders' Equity - ------------------------------------ Debt Commercial paper $ 9,356.2 $ 8,974.0 Variable rate senior notes 10,161.7 7,147.2 Fixed rate senior notes 17,626.7 19,052.3 Subordinated fixed rate notes 200.0 200.0 ----------- ----------- Total debt 37,344.6 35,373.5 Credit balances of factoring clients 2,129.5 2,200.6 Accrued liabilities and payables 1,102.8 1,191.8 Deferred federal income taxes 513.7 510.8 ----------- ----------- Total liabilities 41,090.6 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 3,525.7 3,521.8 Retained earnings 2,339.6 2,097.6 Accumulated other comprehensive income (0.7) 2.8 Treasury stock at cost (118.5) (70.5) ----------- ----------- Total stockholders' equity 5,748.8 5,554.4 ----------- ----------- Total liabilities and stockholders' equity $ 47,089.4 $ 45,081.1 =========== ===========
8 THE CIT GROUP, INC. AND SUBSIDIARIES (Amounts in Millions) MANAGED ASSETS BY STRATEGIC BUSINESS UNIT - -----------------------------------------
At June 30, At December 31, At June 30, 2000 1999 1999 ----------- --------------- ----------- Equipment Financing: Finance receivables $ 11,478.5 $ 10,899.3 $ 8,787.4 Operating lease equipment, net 1,030.5 1,066.2 822.0 ----------- ----------- ----------- Total 12,509.0 11,965.5 9,609.4 ----------- ----------- ----------- Capital Finance: Finance receivables 1,561.0 1,838.0 1,632.3 Operating lease equipment, net 3,235.8 2,931.8 2,589.6 Liquidating portfolio (1) (2) 202.9 281.4 339.1 ----------- ----------- ----------- Total 4,999.7 5,051.2 4,561.0 ----------- ----------- ----------- Total Equipment Financing and Leasing Segment 17,508.7 17,016.7 14,170.4 ----------- ----------- ----------- Vendor Technology Finance: Finance receivables 8,227.7 7,488.9 -- Operating lease equipment, net 2,105.8 2,108.8 -- ----------- ----------- ----------- Total Vendor Technology Finance Segment 10,333.5 9,597.7 -- ----------- ----------- ----------- Structured Finance: Finance receivables 1,980.6 1,933.9 -- Operating lease equipment, net 38.8 -- -- ----------- ----------- ----------- Total Structured Finance Segment 2,019.4 1,933.9 -- ----------- ----------- ----------- Commercial Services 4,287.1 4,165.1 3,215.0 Business Credit 3,294.7 2,837.0 2,769.0 ----------- ----------- ----------- Total Commercial Finance Segment 7,581.8 7,002.1 5,984.0 ----------- ----------- ----------- Total Commercial Segments 37,443.4 35,550.4 20,154.4 ----------- ----------- ----------- Home equity 2,459.7 2,215.4 2,432.4 Manufactured housing 1,684.2 1,666.9 1,658.5 Recreational vehicles 506.8 361.2 427.4 Liquidating portfolio (3) 330.0 462.8 522.5 ----------- ----------- ----------- Total Consumer Segment 4,980.7 4,706.3 5,040.8 ----------- ----------- ----------- Other - Equity Investments 203.4 137.3 91.7 ----------- ----------- ----------- Total Financing and Leasing Portfolio Assets 42,627.5 40,394.0 25,286.9 ----------- ----------- ----------- Finance receivables previously securitized: Commercial 8,478.1 8,471.5 -- Consumer 1,755.3 1,987.0 2,262.3 Consumer liquidating portfolio (3) 510.0 580.8 846.3 ----------- ----------- ----------- Total 10,743.4 11,039.3 3,108.6 ----------- ----------- ----------- Total Managed Assets $ 53,370.9 $ 51,433.3 $ 28,395.5 =========== =========== ===========
(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 $16.7 million, $19.1 million and $21.6 million are included in the liquidating portfolio for the six months ended June 30, 2000, the year ended December 31, 1999 and the six months ended June 30, 1999, respectively. (3) In 1999, we decided to exit the recreational boat and wholesale loan product lines.
For the Quarter For the Six Months Ended June 30, Ended June 30, FEES AND OTHER INCOME 2000 1999 2000 1999 -------- -------- -------- -------- Fees and other income $ 121.1 $ 20.4 $ 242.5 $ 51.3 Gains on sales of leasing equipment 39.4 20.7 61.2 29.9 Factoring commissions 38.2 29.0 76.7 53.0 Gains on securitizations 23.0 4.7 42.0 5.3 Gains on venture capital investments 10.6 -- 48.1 -- -------- -------- -------- -------- $ 232.3 $ 74.8 $ 470.5 $ 139.5 ======== ======== ======== ========
9 THE CIT GROUP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA
For the Quarter For the Six Months Selected Data and Ratios Ended June 30, Ended June 30, 2000 1999 2000 1999 ---- ---- ---- ---- Profitability Net income per diluted share $ 0.58 $ 0.59 $ 1.12 $ 1.16 Net income per diluted share, excluding goodwill amortization $ 0.66 $ 0.62 $ 1.28 $ 1.21 Book value per common share $ 21.85 $ 17.60 Return on average stockholders' equity 10.7% 13.7% 10.5% 13.6% Return on average tangible stockholders' equity(1) 15.9% 15.5% 15.6% 15.1% Return on AEA 1.49% 1.66% 1.48% 1.64% Return on AMA(2) 1.20% 1.48% 1.17% 1.47% Other Net finance income as a percentage of AEA 6.60% 4.72% 6.68% 4.73% Net finance margin as a percentage of AEA 3.53% 3.70% 3.56% 3.72% Efficiency ratio(3) 43.9% 38.0% 45.0% 38.4% Salaries and general operating expenses as a percentage of AMA(2)(3) 2.03% 1.66% 2.09% 1.67% Net credit losses as a percentage of average: Total finance receivables 0.73% 0.41% 0.70% 0.41% Commercial finance receivables 0.64% 0.23% 0.60% 0.22% Consumer finance receivables 1.34% 1.14% 1.41% 1.16% Volume securitized $ 913.7 $ 565.5 $ 1,593.7 $ 1,036.0 Gains on securitizations as a percentage of pretax income 9.40% 3.18% 8.81% 1.84% Average Balances Average Stockholders' Equity $ 5,675.6 $ 2,807.6 $ 5,634.9 $ 2,770.1 Average Finance Receivables $ 33,484.9 $ 20,633.2 $ 32,457.5 $ 20,358.8 Average Earning Assets $ 40,690.9 $ 23,166.2 $ 39,778.6 $ 22,905.3 Average Managed Assets $ 50,674.3 $ 26,019.7 $ 50,402.7 $ 25,608.6
At June 30, At March 31, At December 31, Credit Quality 2000 2000 1999 ---- ---- ---- 60+ days contractual delinquency as a percentage of finance receivables Commercial 2.59% 2.65% 2.42% Consumer 4.33% 4.32% 4.62% Total 2.80% 2.85% 2.71% 60+ days managed financial asset contractual delinquency as a percentage of managed financial assets(4) Commercial 3.09% 3.22% 2.72% Consumer 3.21% 3.26% 3.49% Total 3.11% 3.23% 2.84% Total non-performing assets as a percentage of finance receivables(5) 2.36% 2.46% 2.05% Total non-performing managed assets as a percentage of managed financial assets(4) 2.55% 2.65% 2.23% Reserve for credit losses as a percentage of finance receivables 1.39% 1.43% 1.44% Capital and Leverage Debt (net of overnight deposits) to stockholders' equity(6) 6.16x 6.23x 5.96x Debt (net of overnight deposits) to tangible stockholders' equity(1) (6) 9.27x 9.04x 8.75x
(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 exclude operating leases and Equity Investments. 10 (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. 11 EX-99.2 3 0003.txt PRESS RELEASE Exhibit 99.2 [The CIT Group, Inc. Logo] Contact: Michael J. McGowan Senior Vice President Communications Services (973) 535-3506 michael.mcgowan@cit.com FROM: THE CIT GROUP, INC. 1211 AVENUE OF THE AMERICAS NEW YORK, NY 10036 FOR IMMEDIATE RELEASE THE CIT GROUP, INC. DECLARES REGULAR QUARTERLY DIVIDEND LIVINGSTON, NEW JERSEY, July 27, 2000 --- The Board of Directors of The CIT Group, Inc. (NYSE:CIT; TSE:CIT.U) today declared a regular quarterly cash dividend of $.10 per common share for shareholders of record on August 10, 2000. The cash dividend is payable on August 31, 2000. CIT is one of the largest commercial and consumer financing companies in the world. Founded in 1908, CIT provides diversified financing products and services to a broad range of customers through strategically focused business units. # # # -----END PRIVACY-ENHANCED MESSAGE-----