-----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, AcsqAEtqujQ2txVZAzMGBarFkJWbKKGqpBFS+rPIPncpitjz9MVB/IJ9R0uy/3/M JDlMO1bvmM4zfhFHT2vIjQ== 0000891092-01-000098.txt : 20010129 0000891092-01-000098.hdr.sgml : 20010129 ACCESSION NUMBER: 0000891092-01-000098 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010124 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010126 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: 1516540 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) January 25, 2001 ---------------- 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 fourth quarter and annual earnings, filed as Exhibit 99.1; and 2. The declaration of a dividend for the quarter ending December 31, 2000 of $.10 per share, payable on February 28, 2001 to holders of record at the close of business on February 7, 2001, filed as Exhibit 99.2. -2- Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. 99.1 Press Release, dated January 25, 2001, regarding the 2000 fourth quarter and annual earnings. 99.2 Press Release, dated January 25, 2001, regarding declaration of a dividend for the quarter ending December 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: January 25, 2001 -4- EX-99.1 2 0002.txt PRESS RELEASE Exhibit 99.1 [The CIT Group, Inc. Logo] IMMEDIATE RELEASE - ----------------- CIT REPORTS 13th CONSECUTIVE YEAR OF INCOME GROWTH Record 4th Quarter Results Reflect Improved Margins, Stable Charge-offs and Decreased Leverage NEW YORK, January 25, 2001 --- Delivering its 13th consecutive year of earnings growth, The CIT Group, Inc. (NYSE: CIT, TSE - CIT.U and Exchangeable Shares: TSE - CGX.U) today announced record fourth quarter 2000 net income of $160.1 million, or $0.61 per share on a fully diluted basis, compared to $104.3 million, or $0.49 per diluted share, in the prior year. For the twelve months ending December 31, 2000, net income totaled a record $611.6 million, an increase of 57.1 percent from the prior year. The earnings improvement over the prior year reflects growth from our 1999 acquisition activities, solid fee and other income generation as well as considerable expense savings related to operational integrations. On a diluted per share basis, earnings for 2000 were $2.33 compared to $2.22 in 1999. Fourth quarter 2000 earnings per diluted share, before the amortization of goodwill, was $0.69, improved from $0.54 in 1999. For the year, earnings per diluted share before the amortization of goodwill increased 12.4 percent from 1999 to $2.62. "Despite a softening economy, CIT produced record net income for the quarter and the year, driven by strong performances from its diversified franchises. For well over a decade, in both favorable and tough economies, CIT has consistently produced earnings growth while maintaining a strong balance sheet," said Albert R. Gamper, Jr., CIT Chairman, President and CEO. "With leadership positions in key industry sectors, a highly diversified revenue stream, and strong operating platforms, we are positioned for continued success. In the months ahead, we will continue to focus on the fundamentals of credit quality and operating efficiencies while progressing toward our goals with respect to improving balance sheet leverage and returns." Financial Highlights: Business Volume. Fourth quarter business volume, excluding factoring, was $6.3 billion, up from $6.1 billion for the third quarter and $5.3 billion for the same period last year. This is indicative of the continued improvement in business generation and boosted CIT's Year 2000 commercial and consumer business volume to $25.3 billion. --more-- Margins. Fourth quarter 2000 net finance margin improved to $390.6 million from $370.5 million in the third quarter and $272.7 million in the fourth quarter last year. Fourth quarter 2000 net finance margin as a percentage of average earning assets was 3.75 percent, up from 3.61 percent for the third quarter and from 3.51 percent in the fourth quarter of 1999. This improvement reflects the benefit of pricing initiatives and business mix. Credit Quality. Fourth quarter 2000 net charge-offs were $60.1 million, 0.70 percent of average finance receivables, compared to $61.9 million or 0.74 percent in the third quarter. Commercial net charge-offs for the fourth quarter were 0.62 percent compared to 0.67 percent for the third quarter, while consumer net charge-offs were 1.25 percent compared to 1.21 percent for the third quarter. At December 31, 2000, total past dues as a percentage of finance receivables, were 2.98 percent, up from 2.67 percent at September 30, 2000, as both commercial and consumer delinquencies increased during the quarter. The commercial delinquency trend reflected higher past dues in the Equipment Financing and Leasing segment, in part offset by a decrease in the Vendor Technology Finance segment. Consumer delinquencies increased seasonally in the quarter. Efficiency and Expenses. The efficiency ratio was 43.0 percent in the fourth quarter, improved from 48.3 percent for the fourth quarter 1999. The efficiency ratio was 43.8 percent and 41.3 percent for the full year 2000 and 1999, respectively, reflecting the Newcourt acquisition late in 1999. Balance Sheet Leverage. Debt to tangible equity ratio closed the year at 8.78 times, an improvement from 9.09 times last quarter, reflecting management's ongoing initiatives to liquidate lower yielding assets and maintain pricing discipline. Similarly, the ratio of tangible stockholders' equity to managed assets improved to 7.82 percent from 7.55 percent last quarter. Segment Performance. Net income for the fourth quarter was highlighted by a strong performance across all business units, particularly in the Equipment Financing and Leasing segment, mitigated by modest losses in our Equity Investment portfolio. Fourth quarter volume was strong in Structured Finance, Vendor Technology Finance and Business Credit. (SEE ATTACHED TABLES FOR ADDITIONAL FINANCIAL DATA). -2- 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, global source of financing and leasing capital for companies in more than 30 industries. Managing more than $50 billion in assets across a diversified portfolio, CIT is the trusted financial engine empowering many of today's industry leaders and emerging businesses, offering vendor, equipment, commercial, factoring, consumer and structured financing capabilities. Founded in 1908, CIT operates extensively in the United States and Canada with strategic locations in Europe, Latin and South America, and the Pacific Rim. For more information on CIT, visit the Web site at www.cit.com. Earnings Conference Call and Web Cast: CIT is hosting a conference call and simultaneous Web cast on Thursday, January 25, 2001 at 11:00 a.m. EST to discuss its fourth quarter financial results. Both the call and Web cast are open to the general public. The conference call is available at the following numbers: United States: (800) 819-9193 Confirmation Code: 593740 International: (913) 981-4911 Confirmation Code: 593740 Interested parties may also access the call live over the Internet at: www.cit.com. Please go to the Web site at least 15 minutes before the broadcast to register, download and install any necessary audio software. Following its completion, a replay of the call can be accessed 90 minutes after the call on the Internet via www.cit.com or by calling in the U.S. (888) 203-1112 or internationally (719) 457-0820 using the passcode---593740. ### Media Contacts Investor Relations Contacts Joan Russo James J. Egan, Jr. CIT CIT Joan.Russo@cit.com Jim.Egan@cit.com (973) 740-5437 (973) 535-5911 or or Sammie Becker/Joseph LoBello Yvette K. Rudich Stanton Crenshaw Communications CIT Sbecker/jlobello@stanton-crenshaw.com Yvette.Rudich@cit.com (212) 780-1900 (973) 597-2095 -3- THE CIT GROUP, INC. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (In Millions, except per share amounts)
For the Quarter For the Year Ended December 31, Ended December 31, 2000 1999 2000 1999 -------- ------ -------- -------- Finance income $1,391.2 $886.1 $5,248.4 $2,565.9 Interest expense 652.2 435.2 2,497.7 1,293.4 -------- ------ -------- -------- Net finance income 739.0 450.9 2,750.7 1,272.5 Depreciation on operating lease equipment 348.4 178.2 1,281.3 355.1 -------- ------ -------- -------- Net finance margin 390.6 272.7 1,469.4 917.4 Other revenue 217.3 129.4 912.0 350.8 -------- ------ -------- -------- Operating revenue 607.9 402.1 2,381.4 1,268.2 -------- ------ -------- -------- Salaries and general operating expenses 259.3 192.0 1,035.2 516.0 Provision for credit losses 63.8 32.4 255.2 110.3 Goodwill amortization 22.5 12.6 86.3 25.7 Minority interest in subsidiary trust holding solely debentures of the Company 4.8 4.8 19.2 19.2 -------- ------ -------- -------- Operating expenses 350.4 241.8 1,395.9 671.2 -------- ------ -------- -------- Income before provision for income taxes 257.5 160.3 985.5 597.0 Provision for income taxes 97.4 56.0 373.9 207.6 -------- ------ -------- -------- Net income $ 160.1 $104.3 $ 611.6 $ 389.4 ======== ====== ======== ======== Basic net income per share $ 0.62 $ 0.49 $ 2.34 $ 2.24 Weighted average shares outstanding 260.0 213.1 261.1 174.0 Diluted net income per share $ 0.61 $ 0.49 $ 2.33 $ 2.22 Weighted average shares outstanding 262.5 214.2 262.7 175.2
-4- THE CIT GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in Millions)
December 31, December 31, 2000 1999 ------------ ------------ Assets - ------ Financing and leasing assets Loans and leases Commercial $29,304.0 $27,119.2 Consumer 4,193.5 3,887.9 --------- --------- Finance receivables 33,497.5 31,007.1 Reserve for credit losses (468.5) (446.9) --------- --------- Net finance receivables 33,029.0 30,560.2 Operating lease equipment, net 7,190.6 6,125.9 Finance receivables held for sale 2,698.4 3,123.7 Cash and cash equivalents 812.1 1,073.4 Goodwill 1,964.6 1,850.5 Other assets 2,995.1 2,347.4 --------- --------- Total assets $48,689.8 $45,081.1 ========= ========= Liabilities and Stockholders' Equity - ------------------------------------ Debt Commercial paper $ 9,063.5 $ 8,974.0 Variable rate senior notes 11,130.5 7,147.2 Fixed rate senior notes 17,571.1 19,052.3 Subordinated fixed rate notes 200.0 200.0 --------- --------- Total debt 37,965.1 35,373.5 Credit balances of factoring clients 2,179.9 2,200.6 Accrued liabilities and payables 1,640.8 1,191.8 Deferred federal income taxes 646.8 510.8 --------- --------- Total liabilities 42,432.6 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 3,527.2 3,521.8 Retained earnings 2,603.3 2,097.6 Accumulated other comprehensive income 11.7 2.8 Treasury stock at cost (137.7) (70.5) --------- --------- Total stockholders' equity 6,007.2 5,554.4 --------- --------- Total liabilities and stockholders' equity $48,689.8 $45,081.1 ========= =========
-5- THE CIT GROUP, INC. AND SUBSIDIARIES (Amounts in Millions) MANAGED ASSETS BY STRATEGIC BUSINESS UNIT - -----------------------------------------
At December 31, At December 31, 2000 1999 --------------- --------------- Equipment Financing: Finance receivables (1) $12,469.2 $10,899.3 Operating lease equipment, net (1) 2,313.2 1,066.2 --------- --------- Total 14,782.4 11,965.5 --------- --------- Capital Finance: Finance receivables 1,863.1 1,838.0 Operating lease equipment, net 3,594.6 2,931.8 Liquidating portfolio (2) 185.9 281.4 --------- --------- Total 5,643.6 5,051.2 --------- --------- Total Equipment Financing and Leasing Segment 20,426.0 17,016.7 --------- --------- Vendor Technology Finance: Finance receivables (1) 6,549.0 7,488.9 Operating lease equipment, net (1) 1,224.0 2,108.8 --------- --------- Total Vendor Technology Finance Segment 7,773.0 9,597.7 --------- --------- Structured Finance: Finance receivables 2,347.3 1,933.9 Operating lease equipment, net 58.8 -- Other - Equity Investments 285.8 137.3 --------- --------- Total Structured Finance Segment 2,691.9 2,071.2 --------- --------- Commercial Services 4,277.9 4,165.1 Business Credit 3,415.8 2,837.0 --------- --------- Total Commercial Finance Segment 7,693.7 7,002.1 --------- --------- Total Commercial Segments 38,584.6 35,687.7 --------- --------- Home equity 2,451.7 2,215.4 Manufactured housing 1,802.1 1,666.9 Recreational vehicles 648.0 361.2 Liquidating portfolio (3) 298.2 462.8 --------- --------- Total Consumer Segment 5,200.0 4,706.3 --------- --------- TOTAL FINANCING AND LEASING PORTFOLIO ASSETS 43,784.6 40,394.0 --------- --------- Finance receivables previously securitized: Commercial 9,075.9 8,471.5 Consumer 1,582.7 1,987.0 Consumer liquidating portfolio (3) 457.7 580.8 --------- --------- Total 11,116.3 11,039.3 --------- --------- TOTAL MANAGED ASSETS $54,900.9 $51,433.3 ========= =========
(1) During the third quarter of 2000, we transferred approximately $1.7 billion of finance receivables and $1.0 billion of operating lease equipment from Vendor Technology Finance to Equipment Financing. (2) Consists primarily of ocean going maritime and project finance. Capital Finance discontinued marketing to these sectors in 1997. (3) In 1999, we decided to exit the recreational boat and wholesale loan product lines.
For the Quarter For the Year Ended December 31, Ended December 31, OTHER REVENUE 2000 1999 2000 1999 - ------------- -------- --------- -------- -------- Fees and other income $ 111.6 $ 73.5 $ 480.9 $ 161.0 Gains on securitizations 40.6 9.4 109.5 14.7 Factoring commissions 38.8 34.6 154.7 118.7 Gains on sales of leasing equipment 32.4 11.9 113.2 56.4 Gains (losses) on venture capital investments (6.1) -- 53.7 -- -------- -------- -------- -------- $ 217.3 $ 129.4 $ 912.0 $ 350.8 ======== ======== ======== ========
-6- THE CIT GROUP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA
For the Quarter For the Year Selected Data and Ratios Ended December 31, Ended December 31, 2000 1999 2000 1999 ---- ---- ---- ---- Profitability Net income per diluted share $ 0.61 $ 0.49 $ 2.33 $ 2.22 Net income per diluted share, excluding goodwill amortization $ 0.69 $ 0.54 $ 2.62 $ 2.33 Book value per common share $ 22.94 $ 20.97 Return on average stockholders' equity 10.8% 9.9% 10.7% 12.0% Return on average tangible stockholders' equity(1) 16.3% 12.7% 16.0% 14.2% Return on average stockholders' equity (ex. goodwill amortization) 12.2% 10.9% 12.0% 12.6% Return on AEA 1.54% 1.34% 1.50% 1.52% Return on AMA(2) 1.22% 1.11% 1.19% 1.32% Other Net finance income as a percentage of AEA 7.09% 5.80% 6.76% 4.98% Net finance margin as a percentage of AEA 3.75% 3.51% 3.61% 3.59% Efficiency ratio(3) 43.0% 48.3% 43.8% 41.3% Salaries and general operating expenses as a percentage of AMA(2)(3) 1.97% 2.05% 2.01% 1.75% Net credit losses as a percentage of average: Total finance receivables 0.70% 0.41% 0.71% 0.42% Commercial finance receivables 0.62% 0.26% 0.62% 0.25% Consumer finance receivables 1.25% 1.26% 1.32% 1.19% Volume securitized $ 1,204.2 $ 476.9 $ 4,129.2 $ 1,512.9 Gains on securitizations as a percentage of pretax income 15.8% 5.9% 11.1% 2.5% Average Balances Average Stockholders' Equity $ 5,906.9 $ 4,233.6 $ 5,738.2 $ 3,235.7 Average Finance Receivables $34,245.7 $26,740.0 $33,325.3 $22,426.8 Average Earning Assets $41,669.0 $31,104.1 $40,682.5 $25,569.5 Average Managed Assets $52,628.7 $37,476.5 $51,436.9 $29,438.8 At December 31, At December 31, Credit Quality 2000 1999 ---- ---- 60+ days contractual delinquency as a percentage of finance receivables Commercial 2.69% 2.42% Consumer 5.03% 4.62% Total 2.98% 2.71% 60+ days managed financial asset contractual delinquency as a percentage of managed financial assets(4) Commercial 3.18% 2.72% Consumer 3.86% 3.49% Total 3.29% 2.84% Total non-performing assets as a percentage of finance receivables(5) 2.47% 2.05% Total non-performing managed assets as a percentage of managed financial assets(4) 2.74% 2.23% Reserve for credit losses as a percentage of finance receivables 1.40% 1.44% Capital and Leverage Tangible stockholders' equity to managed assets(1)(6) 7.82% 7.69% Debt (net of overnight deposits) to tangible stockholders' equity(7) 8.78x 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. (5) Total non-performing assets reflect both commercial and consumer finance receivables on non-accrual status and assets received in satisfaction of loans. (6) Tangible stockholders' equity includes $250.0 million of Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely debentures of the Company. (7) 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. -7- EX-99.2 3 0003.txt PRESS RELEASE Exhibit 99.2 [The CIT Group, Inc. Logo] IMMEDIATE RELEASE CIT DECLARES REGULAR QUARTERLY DIVIDEND NEW YORK, New York, January 25, 2001-- The Board of Directors of The CIT Group, Inc. (NYSE:CIT; TSE:CIT U; CGX.U) declared a regular quarterly cash dividend of $.10 per common share for shareholders of record on Feb. 7, 2001. The cash dividend is payable on Feb. 28, 2001. About CIT: CIT is a leading, global source of financing and leasing capital for companies in more than 30 industries. Managing more than $50 billion in assets across a diversified portfolio, CIT is the trusted financial engine empowering many of today's industry leaders and emerging businesses, offering vendor, equipment, commercial, factoring, consumer and structured financing capabilities. Founded in 1908, CIT operates extensively in the United States and Canada with strategic locations in Europe, Latin and South America, and the Pacific Rim. For more information on CIT, visit the Web site at www.cit.com. ### Media Contacts Investor Relations Contacts Joan Russo James J. Egan, Jr. CIT CIT Joan.Russo@cit.com Jim.Egan@cit.com (973) 740-5437 (973) 535-5911 or or Sammie Becker/Joseph LoBello Yvette K. Rudich Stanton Crenshaw Communications CIT Sbecker/jlobello@stanton-crenshaw.com Yvette.Rudich@cit.com (212) 780-1900 (973) 597-2095 -----END PRIVACY-ENHANCED MESSAGE-----