-----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, VljIA+NW3tIGVgO1GpRZsC1iZVXO5oRc/bFyPGtF9wyagd6GWbCtaXWLNPlRefrQ mf5IzhI+ajrJXCZsMJ56ag== 0000891092-01-500048.txt : 20010430 0000891092-01-500048.hdr.sgml : 20010430 ACCESSION NUMBER: 0000891092-01-500048 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010426 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIT GROUP INC CENTRAL INDEX KEY: 0000020388 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE LESSORS [6172] 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: 1613267 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 file001.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) April 26, 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 2001 first quarter earnings, filed as Exhibit 99.1; and 2. The declaration of a dividend for the quarter ending March 31, 2001 of $.10 per share, payable on May 31, 2001 to holders of record at the close of business on May 9, 2001, filed as Exhibit 99.2. -2- Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. 99.1 Press Release, dated April 26, 2001, regarding the 2001 first quarter earnings. 99.2 Press Release, dated April 26, 2001, regarding declaration of a dividend for the quarter ending March 31, 2001. -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 26, 2001 -4- EX-99.1 2 file002.txt PRESS RELEASE Exhibit 99.1 [The CIT Group, Inc. Logo] IMMEDIATE RELEASE CIT REPORTS 11.3 PERCENT FIRST QUARTER EARNINGS GROWTH Reflecting Increased Margins, Broad Based Non-Spread Revenues and Further Leverage Reductions NEW YORK, April 26, 2001 --- The CIT Group, Inc. (NYSE: CIT, TSE: CIT.U and Exchangeable Shares: TSE: CGX.U) today announced first quarter 2001 net income of $160.1 million, an increase of 11.3 percent over the same period last year. Earnings per diluted share were $0.61 for the first quarter compared to $0.55 in the first quarter of 2000. CIT's first quarter earnings growth was driven by improved finance margins and stable operating expenses, offset by lower venture capital gains. "Our first quarter results reflect CIT's diverse and balanced businesses, which have enabled us to sustain our consistent high quality growth for well over a decade regardless of the economic climate. We are well positioned to capitalize on a wide range of opportunities in the marketplace," said Albert R. Gamper Jr., CIT Chairman, President and CEO. "By creating multiple revenue streams, operating efficiently and maintaining our focus on credit quality, CIT has been successful in increasing earnings." "Additionally, we look forward to the second quarter closing of the Tyco transaction. We will bring Tyco a significant financial services platform with the ability to provide comprehensive financing solutions to Tyco's customers, while allowing CIT to continue to build scale in its core franchises. We are very excited to be joining Tyco and look forward to working with Dennis Kozlowski and his team in building Tyco's financial services enterprise." Financial Highlights: Margin. First quarter 2001 net finance margin improved to $404.7 million from $349.1 million in the first quarter of last year. As a percentage of average earning assets, first quarter net finance margin was 3.89 percent, up from 3.58 percent for the first quarter of 2000 reflecting CIT's continued focus on business mix and disciplined pricing and a declining interest rate environment. Improved margin also helped offset a decline in volume, which, excluding factoring, was $5.1 billion for the quarter. First quarter volume was impacted by reduced portfolio acquisition activity during the current year, and de-emphasis of lower margin business as well as some impact from the softer economy. Other Revenue. Other revenue for the three months ended March 31, 2001 totaled $211.6 million, compared to $238.2 million for the first quarter of 2000. Gains on venture capital investments were $4.9 million for the first quarter of 2001, down from $37.5 million in 2000, while securitization gains improved to $37.4 million from $19.0 million last year. Balance Sheet Leverage. Debt to tangible equity ratio ended the first quarter at 8.41 times, an improvement from 8.78 times at year end 2000. Similarly, the ratio of tangible stockholders' equity to managed assets improved to 8.23 percent from 7.82 percent at December 31, 2000. These improvements represent continued progress toward CIT's balance sheet targets. Credit Quality. At March 31, 2001, total past dues as a percentage of finance receivables were 3.25 percent, up from 2.98 percent at year end 2000 due to the softer economic environment. First quarter net charge-offs were $66.7 million, 0.80 percent of average finance receivables, up from $53.0 million, or 0.67 percent, in the first quarter 2000. Commercial net charge-offs for the first quarter were $51.6 million, 0.71 percent, compared to $38.1 million, 0.55 percent, last year, while consumer net charge-offs were $15.1 million, 1.42 percent, compared to $14.9 million, 1.48 percent, for first quarter 2000. Adoption of New Derivative Accounting Standard. During the quarter, the new derivative accounting standard was adopted, with a $0.8 million non-cash reduction in net income. CIT's hedging strategies are principally designed to convert floating interest rate debt into fixed rate instruments to match fund fixed rate receivables. Accordingly, pursuant to this new accounting standard, an unrealized mark to market loss was included in accumulated other comprehensive (loss) income at March 31, 2001. Tyco Acquisition of CIT During the first quarter, Tyco International Ltd. (NYSE:TYC, BSX:TYC, LSE:TYI), a diversified manufacturing and service company, announced that it would acquire CIT in a tax-free, stock-for-stock exchange. A registration statement with respect to the acquisition has been filed by Tyco with the Securities and Exchange Commission and declared effective. A special meeting of CIT shareholders with respect to the acquisition has been scheduled for May 23, 2001, with an expected date of closing of June 1, 2001. Once completed, CIT will continue to file with the SEC relating to its public debt. -2- Earnings Conference Call and Web Cast CIT is hosting a conference call and simultaneous Web cast with visuals on April 26, 2001 at 11:00 a.m. EDT to discuss its first quarter financial results. Both the call and Web cast are open to the general public. The conference call is available at the following numbers: o United States: (800) 810-0924 Passcode: 454217 o International: (913) 981-4900 Passcode: 454217 Interested parties may also access the live call on the Internet at http://www.cit.com Please go to the Web site at least 15 minutes before the broadcast to register, download and install any necessary software. A replay of the call can be accessed 90 minutes after the call on the Internet via http://www.cit.com or by calling in the U.S. (800) 810-0924 or internationally (913) 981-4900 using the passcode 454217 (available until midnight, April 30, 2001). 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 2000 Form 10-K. -3- About CIT: CIT is a leading, global source of financing and leasing capital and an advisor 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 http://www.cit.com Investor Relations Contacts Media Contacts James J. Egan, Jr. Sammie Becker CIT Stanton Crenshaw (973) 535-5911 (212) 780-1900, Ext. 506 jim.egan@cit.com sbecker@stanton-crenshaw.com or or Yvette K. Rudich Joseph LoBello CIT Stanton Crenshaw (973) 597-2095 (212) 780-1900, ext. 535 yvette.rudich@cit.com jlobello@stanton-crenshaw.com -4- THE CIT GROUP, INC. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (dollars in millions, except per share amounts)
For the Quarters Ended March 31, 2001 2000 --------- --------- Finance income $ 1,376.8 $ 1,228.8 Interest expense 625.7 571.9 --------- --------- Net finance income 751.1 656.9 Depreciation on operating lease equipment 346.4 307.8 --------- --------- Net finance margin 404.7 349.1 Other revenue 211.6 238.2 --------- --------- Operating revenue 616.3 587.3 --------- --------- Salaries and general operating expenses 263.5 268.2 Provision for credit losses 68.3 61.6 Goodwill amortization 22.5 20.5 Minority interest in subsidiary trust holding solely debentures of the Company 4.8 4.8 --------- --------- Operating expenses 359.1 355.1 --------- --------- Income before provision for income taxes 257.2 232.2 Provision for income taxes 97.1 88.3 --------- --------- Net income $ 160.1 $ 143.9 ========= ========= Basic net income per share $ 0.61 $ 0.55 Weighted average shares outstanding 260.6 262.9 Diluted net income per share $ 0.61 $ 0.55 Weighted average shares outstanding 264.3 263.6
-5- THE CIT GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in millions) March 31, December 31, 2001 2000 --------- ------------ Assets Financing and leasing assets: Loans and leases: Commercial $29,102.2 $29,304.0 Consumer 4,198.5 4,193.5 --------- --------- Finance receivables 33,300.7 33,497.5 Reserve for credit losses (462.0) (468.5) --------- --------- Net finance receivables 32,838.7 33,029.0 Operating lease equipment, net 7,186.7 7,190.6 Finance receivables held for sale 2,624.8 2,698.4 Cash and cash equivalents 740.0 812.1 Goodwill 1,942.1 1,964.6 Other assets 3,053.1 2,995.1 --------- --------- Total assets $48,385.4 $48,689.8 ========= ========= Liabilities and Stockholders' Equity Debt Commercial paper $ 9,662.9 $ 9,063.5 Variable rate senior notes 10,798.3 11,130.5 Fixed rate senior notes 17,157.0 17,571.1 Subordinated fixed rate notes 100.0 200.0 --------- --------- Total debt 37,718.2 37,965.1 Credit balances of factoring clients 2,131.4 2,179.9 Accrued liabilities and payables 1,691.4 1,640.8 Deferred federal income taxes 623.8 646.8 --------- --------- Total liabilities 42,164.8 42,432.6 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 3,535.9 3,527.2 Retained earnings 2,736.9 2,603.3 Treasury stock at cost (133.1) (137.7) --------- --------- 6,142.4 5,995.5 Accumulated other comprehensive (loss) income (171.8) 11.7 --------- --------- Total stockholders' equity 5,970.6 6,007.2 --------- --------- Total liabilities and stockholders' equity $48,385.4 $48,689.8 ========= ========= -6- THE CIT GROUP, INC. AND SUBSIDIARIES (dollars in millions) MANAGED ASSETS BY STRATEGIC BUSINESS UNIT
At March 31, At December 31, At March 31, 2001 2000 2000 ------------ --------------- ------------ Equipment Financing: Finance receivables (1) $10,396.9 $12,153.7 $11,081.1 Operating lease equipment, net (1) 1,520.8 2,280.7 1,170.9 --------- --------- --------- Total 11,917.7 14,434.4 12,252.0 --------- --------- --------- Capital Finance: Finance receivables 1,722.9 1,863.1 1,638.3 Operating lease equipment, net 3,632.1 3,594.6 3,187.0 Liquidating portfolio (2) 171.7 185.9 259.7 --------- --------- --------- Total 5,526.7 5,643.6 5,085.0 --------- --------- --------- Total Equipment Financing and Leasing Segment 17,444.4 20,078.0 17,337.0 --------- --------- --------- Vendor Technology Finance: Finance receivables (1) 6,910.4 6,864.5 8,568.6 Operating lease equipment, net (1) 1,849.0 1,256.5 2,091.0 --------- --------- --------- Total Vendor Technology Finance Segment 8,759.4 8,121.0 10,659.6 --------- --------- --------- Commercial Services 4,434.3 4,277.9 4,482.0 Business Credit 3,561.0 3,415.8 3,103.8 --------- --------- --------- Total Commercial Finance Segment 7,995.3 7,693.7 7,585.8 --------- --------- --------- Structured Finance: Finance receivables 2,507.0 2,347.3 2,014.4 Operating lease equipment, net 54.9 58.8 28.8 Equity Investments 309.4 285.8 160.7 --------- --------- --------- Total Structured Finance Segment 2,871.3 2,691.9 2,203.9 --------- --------- --------- Specialty Finance: Consumer 5,071.8 4,901.8 4,532.5 Small ticket commercial assets (1)(3) 1,056.3 -- -- Liquidating portfolio (4) 254.5 298.2 439.1 --------- --------- --------- Total Specialty Finance Segment 6,382.6 5,200.0 4,971.6 --------- --------- --------- TOTAL FINANCING AND LEASING PORTFOLIO ASSETS 43,453.0 43,784.6 42,757.9 --------- --------- --------- Finance receivables previously securitized and still managed by us: Commercial 8,605.7 9,075.9 7,963.2 Consumer 1,502.1 1,582.7 1,878.8 Consumer liquidating portfolio (4) 432.6 457.7 549.6 --------- --------- --------- Total 10,540.4 11,116.3 10,391.6 --------- --------- --------- TOTAL MANAGED ASSETS $53,993.4 $54,900.9 $53,149.5 ========= ========= =========
- ---------- (1) During the first quarter of 2001, we transferred approximately $637.4 million of finance receivables and $658.1 million of operating lease equipment from Equipment Financing to Vendor Technology Finance, $729.7 million of finance receivables and $112.7 million of operating lease equipment from Equipment Financing to Specialty Finance and $315.6 million of finance receivables and $32.5 million of operating lease equipment from Vendor Technology Finance to Specialty Finance. (2) Ocean going maritime and project finance receivables. (3) Includes $129.9 million of operating lease equipment. (4) Recreational boat and wholesale loan receivables. For the Quarters Ended March 31, OTHER REVENUE 2001 2000 - ------------- ------ ------ Fees and other income $106.6 $121.4 Gains on securitizations 37.4 19.0 Factoring commissions 36.7 38.5 Gains on sales of leasing equipment 26.0 21.8 Gains on venture capital investments 4.9 37.5 ------ ------ $211.6 $238.2 ====== ====== -7- THE CIT GROUP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA Selected Data and Ratios
For the Quarters Ended March 31, 2001 2000 ---------- ---------- Profitability Net income per diluted share $ 0.61 $ 0.55 Net income per diluted share, excluding goodwill amortization $ 0.68 $ 0.62 Book value per common share (1) $ 23.40 $ 21.45 Return on average stockholders' equity (1) 10.6% 10.3% Return on average tangible stockholders' equity(1) (2) 15.6% 15.3% Return on average stockholders' equity (1) (ex. goodwill amortization) 11.9% 11.6% Return on AEA 1.54% 1.48% Return on AMA(3) 1.23% 1.16% Other Net finance income as a percentage of AEA 7.22% 6.74% Net finance margin as a percentage of AEA 3.89% 3.58% Efficiency ratio(4) 43.1% 46.0% Salaries and general operating expenses as a percentage of AMA(3)(4) 2.03% 2.15% Net credit losses as a percentage of average: Total finance receivables 0.80% 0.67% Commercial finance receivables 0.71% 0.55% Consumer finance receivables 1.42% 1.48% Volume securitized (dollars in millions) $ 1,096.4 $ 680.0 Gains on securitizations as a percentage of pretax income 14.5% 8.2% Average Balances (dollars in millions) Average Stockholders' Equity (1) $ 6,055.6 $ 5,597.7 Average Finance Receivables $ 33,395.4 $ 31,612.6 Average Earning Assets $ 41,635.3 $ 38,968.1 Average Managed Assets $ 51,961.8 $ 49,793.2
At March 31, At December 31, At March 31, 2001 2000 2000 ------------ --------------- ------------ Credit Quality 60+ days contractual delinquency as a percentage of finance receivables Commercial 3.03% 2.69% 2.65% Consumer 4.76% 5.03% 4.32% Total 3.25% 2.98% 2.85% 60+ days managed contractual delinquency as a percentage of managed financial assets(5) Commercial 3.52% 3.18% 3.22% Consumer 3.63% 3.86% 3.26% Total 3.54% 3.29% 3.23% Total non-performing assets as a percentage of finance receivables(6) 2.70% 2.47% 2.46% Total non-performing managed assets as a percentage of managed financial assets(5) 2.90% 2.74% 2.65% Reserve for credit losses as a percentage of finance receivables 1.39% 1.40% 1.43% Capital and Leverage Tangible stockholders' equity to managed assets (1) (2) (7) 8.23% 7.82% 7.65% Debt (net of overnight deposits) to tangible stockholders' equity(1) (8) 8.41x 8.78x 9.04x
- ---------- (1) For these 2001 calculations, stockholders' equity excludes the impact of accounting changes for derivative financial instruments. (2) Tangible stockholders' equity excludes goodwill. (3) "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 still managed by the Company. (4) Amortization of goodwill is excluded from these ratios. (5) Managed financial assets exclude operating leases and Equity Investments. (6) Total non-performing assets reflect both commercial and consumer finance receivables on non-accrual status and assets received in satisfaction of loans. (7) Tangible stockholders' equity (excludes the impact of accounting changes for derivative financial instruments) includes $250.0 million of Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely debentures of the Company ("Preferred Capital Securities"). (8) Total debt excludes, and stockholders' equity includes $250.0 million of Preferred Capital Securities. -8- EX-99.2 3 file003.txt PRESS RELEASE Exhibit 99.2 [The CIT Group, Inc. Logo] IMMEDIATE RELEASE CIT ANNOUNCES QUARTERLY DIVIDEND NEW YORK, New York, April 26, 2001-- The CIT Group, Inc. (NYSE: CIT, TSE: CIT.U and Exchangeable Shares: TSE: CGX.U) today announced that its Board of Directors has declared a regular quarterly cash dividend of $.10 per share, payable on May 31, 2001, to shareholders of record on May 9, 2001. About CIT: CIT is a leading, global source of financing and leasing capital and an advisor 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. Investor Relations Contacts Media Contacts James J. Egan, Jr. Sammie Becker CIT Stanton Crenshaw (973) 535-5911 (212) 780-1900, Ext. 506 jim.egan@cit.com sbecker@stanton-crenshaw.com or or Yvette K. Rudich Joseph LoBello CIT Stanton Crenshaw (973) 597-2095 (212) 780-1900, ext. 535 yvette.rudich@cit.com jlobello@stanton-crenshaw.com -----END PRIVACY-ENHANCED MESSAGE-----