<PAGE>
New Worlds New Rules
Newcourt
1997 First Quarter Report
To Shareholders
For the Three Months Ended March 31
NCT
<PAGE>
FINANCIAL SUMMARY
Newcourt Credit Group
<TABLE>
<CAPTION>
(unaudited, in thousands of Canadian dollars, except for share data)
Three months ended
March 31 March 31
1997 1996
<S> <C> <C>
Income Statement $ $
Securitization and syndication fees 22,737 14,526
Net income from affiliated companies
and management and other fees 9,920 7,339
Net finance income 16,008 7,666
Total asset finance income 48,665 29,531
Operating income before taxes 18,108 10,005
Net income 14,125 8,003
Fully diluted earnings per share (1) 0.23 0.17
Dividends per share (1) 0.035 0.03
As at
March 31 December 31
1997 1996
<S> <C> <C>
Balance Sheet $ $
Total assets 2,247,460 2,164,494
Debt 1,519,963 1,543,144
Shareholders' equity 651,687 515,934
Common shares outstanding 32,609,260 30,091,344
Three months ended
March 31 March 31
1997 1996
<S> <C> <C>
Asset Financings $ $
Originations during the period 1,368,777 1,024,996
As at
March 31 December 31
1997 1996
$ $
<S> <C> <C>
Total finance assets owned and managed 6,722,161 6,625,990
<Fn1> reflects 2 for 1 stock division of common shares effective
April 14, 1997
</Fn1>
</TABLE>
<PAGE>
MESSAGE TO SHAREHOLDERS
Newcourt Credit Group
Newcourt earned net income of $14.1 million for the three month period ending
March 31, 1997, representing a 76% increase over the $8.0 million reported
for the same period in 1996. First quarter earnings per share amounted to
$0.23 versus $0.17 for the same three month period last year. During the
period, the number of issued and outstanding common shares increased by
2,517,916 to 32,609,260 (pre-split) as of March 31, 1997.
Following the end of the period, the Company subdivided its common shares on
a two-for-one basis and as of April 14, 1997 had 65,218,520 common shares
issued and outstanding.
New loan originations for the quarter amounted to $1.4 billion versus $1.0
billion for the same period in 1996, representing a 34% increase. Of this
total, $911 million or 67% were attributable to transactions in the
commercial market. Fifty-eight percent (58%) of the new commercial
financings were sourced from the U.S. and international markets. Newcourt's
activities in the corporate finance market account for the remaining 33%
($458 million) of the Company's new loans during the quarter.
Total asset finance income for the three month period rose 65% to $48.7
million from approximately $29.5 million during the same quarter in 1996.
Fee-based income represented approximately two-thirds of the Company's
revenue mix, accounting for $32.7 million (67%) of total asset finance income
compared with $21.9 million (74%) in 1996.
These results are in line with management's 1997 business plan and, in part,
reflect the investment which the Company has made in geographically expanding
its loan origination capabilities, particularly in the United States market.
Following the end of the quarter, two strategic U.S.-based initiatives were
concluded by the Company, which together underscore the progress that
Newcourt has achieved in developing a broadly-based presence in the North
American market.
On April 14, 1997, the Company's commercial finance business unit, Newcourt
Financial, established a joint venture with Dell Computer Corporation to
create Dell Financial Services. This entity is the exclusive
page one
<PAGE>
MESSAGE TO SHAREHOLDERS
Newcourt Credit Group
provider of sales financing and asset management services to Dell in the United
States. Dell and Newcourt are in the process of expanding the
mandate of Dell Financial Services to facilitate the service needs of Dell's
international operations. Fundamental to Newcourt's growth strategy is the
development of long-term relationships with leading equipment manufacturers,
such as Dell.
On April 30, 1997, Newcourt Credit Group commenced trading of its common
shares on the New York Stock Exchange under the trading symbol "NCT".
Establishing its presence in the U.S. and internationally has been a key
element of Newcourt's growth strategy for the past three years. However,
care has been taken to ensure that as the Company moves into new regions it
remains focused on those segments of the asset-based lending market in which
it has already developed a high level of expertise. For example, the
strategic alliances which we have established with our major loan
origination and funding partners provide the primary incentive for the decision
to enter new geographic markets. Through these alliances, we are quickly able
to tap into the new sources of loan volume needed to offset the initial entry
costs.
Having successfully applied this strategy in securing our entry to the U.S.
market, Newcourt plans to follow this same approach as the Company
establishes its presence in other international markets. As the Company's
loan origination and funding partners seek access to these new markets,
Newcourt will be there to provide the services which these partners have come
to value from us in North America.
David J. Sharpless Steven K. Hudson
Chairman President and
Chief Executive Officer
page two
<PAGE>
FINANCIAL HIGHLIGHTS
Newcourt Credit Group
NEW ASSET FINANCINGS INCREASED OVER Q1/96
During the first quarter of 1997, Newcourt originated $1.4 billion of new
asset-based financings.
Originations in the commercial finance market totaled $911 million, up 59%
from the $574 million recorded in 1996. Volumes in the corporate market
were $458 million compared with $451 million in the previous year.
REVENUE INCREASES
Total asset finance income for the first quarter totaled $48.7 million
versus $29.5 million for the first quarter of 1996, representing an increase
of 65%. Fee-based and affiliate income accounted for two-thirds of revenue
growing from $21.9 million in the first quarter of 1996 to $32.7 million in
the current period.
page three
<PAGE>
FINANCIAL HIGHLIGHTS
Newcourt Credit Group
NET INCOME UP 76%
Net income for the 3 months ending March 31, 1997 was $14.1 million
representing a 76% increase over the $8.0 million reported for the same
period last year.
OWNED AND MANAGED LOANS
EXCEED $6.7 BILLION
At the end of the first quarter of 1997, Newcourt's portfolio of owned and
managed assets grew to more than $6.7 billion. The owned portion of the
portfolio was $2.0 billion, while the managed portion accounted for the
remaining $4.7 billion.
page four
<PAGE>
BUSINESS HIGHLIGHTS
Newcourt Credit Group
LOAN ORIGINATION - COMMERCIAL FINANCE
New vendor programs established
During the period, Newcourt Financial established new vendor agreements in
each of the Company's core market segments. Newcourt currently has more
than 170 significant vendor programs in place across North America.
Significant joint venture created with Dell
In early April, after a thorough six-month search and selection process,
U.S.-based computer manufacturer Dell Computer Corporation announced its
selection of Newcourt as its exclusive partner in the creation of a joint
venture. Dell Financial Services is the exclusive financing source for
Dell in the United States and will eventually provide similar services on a
worldwide basis.
LOAN ORIGINATION - CORPORATE FINANCE
$214 million of refinancing and advisory services for
aircraft
Newcourt Capital provided advisory services to ATR for a transaction
involving 15 ATR 42-500 aircraft acquired by Air Littoral. As well,
Newcourt provided refinancing for 3 ATR 72 aircraft operated by Royal Air
Cambodge.
$2.7 billion backlog of mandated transactions
Newcourt Capital's backlog of $2.7 billion of mandated transactions for the
first quarter is a 58% increase over the $1.7 billion reported for the same
three month period of 1996.
LOAN FUNDING & MANAGEMENT
$126.2 million equity issue completed
Late in the first quarter, Newcourt announced it successfully completed a
treasury offering of 2,475,000 common shares at $51.00 per share. The
transaction, completed March 11, 1997, succeeded in raising $126.2 million
of new equity.
Final approval for New York Stock Exchange listing attained
During the quarter, final approval was given to Newcourt for an April 30,
1997 listing of the Company's common shares on the New York Stock Exchange.
Canadian and U.S. commercial loans securitized
Newcourt's Treasury department completed the securitization of $714 million
of commercial loans in the first quarter. Of that amount, $316 million were
sold to Canadian investors, with the remaining $398 million purchased by U.S.
investors.
page five
<PAGE>
CONSOLIDATED STATEMENTS OF
INCOME AND RETAINED EARNINGS
Newcourt Credit Group
<TABLE>
<CAPTION>
(unaudited, in thousands of Canadian dollars, except for per share data)
Three Months Ended
March 31 March 31
1997 1996
<S> <C> <C>
$ $
Fee and affiliate income
Securitization and syndication fees 22,737 14,526
Net income from affiliated companies 4,055 1,672
Management and other fees 5,865 5,667
32,657 21,865
Net finance income 16,008 7,666
Total asset finance income 48,665 29,531
Operating expenses 30,557 19,526
Operating income before taxes 18,108 10,005
Provision for income taxes 3,983 2,002
Net income for the period 14,125 8,003
Retained earnings, beginning of period 100,774 56,942
Dividends paid ( 2,107) ( 1,372)
Options purchased ( 173) 0
Retained earnings, end of period 112,619 63,573
Earnings per share:
Basic (1) $ 0.23 $ 0.17
Fully diluted (1) $ 0.23 $ 0.17
<Fn1> reflects 2 for 1 stock division of common shares effective April 14,
1997
</Fn1>
</TABLE>
page six
<PAGE>
CONSOLIDATED BALANCE SHEETS
Newcourt Credit Group
<TABLE>
<CAPTION>
(unaudited, in thousands of Canadian dollars)
March 31 December 31
1997 1996
$ $
<S> <C> <C>
Assets
Investment in finance assets 1,111,352 1,072,277
Assets held for securitization
and syndication 774,882 774,000
Investment in affiliated companies 170,254 162,308
Accounts receivable 51,598 36,900
Fixed assets 49,267 40,859
Other assets 90,107 78,150
Total Assets 2,247,460 2,164,494
Liabilities and Shareholders' Equity
Liabilities
Accounts payable and accrued liabilities 62,342 93,338
Debt 1,519,963 1,543,144
Deferred income taxes 13,468 12,078
Total Liabilities 1,595,773 1,648,560
Shareholders' Equity
Share capital 539,068 415,160
Retained earnings 112,619 100,774
Total Shareholders' Equity 651,687 515,934
Total Liabilities and Shareholders' Equity 2,247,460 2,164,494
</TABLE>
page seven
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Newcourt Credit Group
<TABLE>
<CAPTION>
(unaudited, in thousands of Canadian dollars)
Three Months Ended
March 31 March 31
1997 1996
$ $
<S> <C> <C>
Operating Activities
Net income for the period 14,125 8,003
Add items not requiring an outlay of cash
Deferred income taxes 2,782 1,206
Depreciation and amortization 2,711 1,066
Net change in non-cash assets and liabilities
related to operations ( 59,957) ( 12,376)
Cash used in operating activities ( 40,339) ( 2,101)
Investing Activities
Finance assets, underwritten and purchased (946,532) (694,519)
Finance assets, securitized and syndicated 714,064 219,352
Finance assets, repayments and others 192,511 54,376
Finance assets and assets
held for securitization and syndication ( 39,957) (420,791)
Investment in affiliated companies ( 7,946) 1,913
Purchase of fixed assets ( 10,205) ( 3,183)
Cash used in investing activities ( 58,108) (422,061)
Financing Activities
Debt issued, net ( 23,181) 424,736
Issue of common shares, net 121,400 798
Deferred tax on share issue 2,508 0
Dividends paid ( 2,107) ( 1,372)
Options purchased ( 173) 0
Cash provided by financing activities 98,447 424,162
</TABLE>
page eight
<PAGE>
INFORMATION
Newcourt Credit Group
HEAD OFFICE
BCE Place
181 Bay Street
Suite 3500, P.O. Box 827
Toronto, Ontario
Canada M5J 2T3
Telephone: (416) 594-2400
Facsimile: (416) 594-5995
STOCK EXCHANGE LISTINGS
Toronto
Montreal
New York
STOCK SYMBOL
NCT
TRANSFER AGENT AND
REGISTRAR
Montreal Trust
151 Front Street West
8th Floor
Toronto, Ontario
M5J 2N1
Telephone: (416) 981-9500
Facsimile: (416) 981-9800
INVESTOR RELATIONS CONTACT
John Sadler
Senior Vice President
Corporate Affairs
Telephone: (416) 777-6126
Facsimile: (416) 594-5230
<TABLE>
<CAPTION>
COMMON SHARE PRICE
FOR THE QUARTER
Pre Post
Split
<S> <C> <C> <C>
High $ 55.45 27.73
Low $ 46.10 23.05
Close $ 55.10 27.55
Number of common shares issued and outstanding: 65,218,520 (1)
<Fn1> reflects 2 for 1 stock division of common shares effective
April 14, 1997.
</Fn1>
</TABLE>
Foreign Exchange Rates
All amounts are expressed in Canadian dollars, unless otherwise specified. For
the periods indicated, the average U.S. exchange rates for the quarter ended
March 31 and the quarter end mid-market rates, payable in Canadian dollars,
based on Bloomberg are:
<TABLE>
<CAPTION>
1997 1996
(Canadian Dollars per U.S. Dollar)
<S> <C> <C>
Average $1.36 $1.37
Quarter End $1.38 $1.36
</TABLE>
<PAGE>
PROFILE
Newcourt Credit Group
Newcourt Credit Group is a North American non-bank financial services company
active in the origination, management and sale of asset-based loans.
Through its network of 34 offices in North America, Europe and Australia, the
Company serves two distinct segments of the asset-based finance market -
commercial finance and corporate finance. In these markets, Newcourt
specializes in financing a broad range of equipment and capital assets
through secured loans, conditional sales contracts and leases.
Newcourt Credit Group has over $6.7 billion in owned and managed loans.
