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 14, 1994
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The CIT Group Holdings, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-1861 13-2994534
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1211 Avenue of the Americas
New York, New York 10036
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Registrant's telephone number, including area code (212) 536-1950
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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See attached press release.
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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 HOLDINGS, INC.
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(Registrant)
By /s/ JOSEPH J. CARROLL
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Joseph J. Carroll
Executive Vice President and
Chief Financial Officer
Dated: July 19, 1994
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NEWS
(THE CIT GROUP, INC. LETTERHEAD)
Contact: Joseph J. Carroll
Chief Financial Officer
(201) 740-5214
FROM: THE CIT GROUP HOLDINGS, INC.
1211 AVENUE OF THE AMERICAS
NEW YORK, NY 10036
FOR IMMEDIATE RELEASE
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THE CIT GROUP REPORTS RECORD EARNINGS OF $51.0 MILLION IN 1994 SECOND QUARTER;
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9.4 PERCENT INCREASE OVER 1993 SECOND QUARTER;
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SIX MONTH NET INCOME OF $99.0 MILLION, ALSO A RECORD;
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NEW YORK, NEW YORK, JULY 14, 1994 --- The CIT Group Holdings, Inc., one
of the nation's leading asset-based finance companies, today reported record
net income of $51.0 million for the quarter ended June 30, 1994, an increase
of 9.4 percent from the $46.6 million reported for the second quarter of 1993.
Net income for the first six months of 1994 was $99.0 million, also a record
and a 9.8 percent increase over the prior year. The record earnings were
principally due to improved fees and other revenue, coupled with increased net
interest revenue from higher financing and leasing assets in 1994. These
improvements benefited from the revenues of Barclays Commercial Corporation
(BCC) which was acquired on February 28, 1994.
"CIT's performance is a reflection of the generally expanding economy we
are experiencing," said Albert R. Gamper, Jr., CIT president and CEO. "This
strength is broad-based and hopefully will not be impacted by dampening tax or
monetary actions," he added.
"The recent upgrade of our senior debt rating by Duff & Phelps to AA- and
the announcement last week that Moody's is reviewing our A1 rating for
possible upgrade are tangible evidence that CIT's consistent growth and
earnings improvement is recognized in the marketplace," noted Gamper.
"On the lending side, we are now seeing aggressive practices relative to
rates and structure in the marketplace. We are concerned that this may be a
revival of practices characteristic of the '80s when lenders forgot the
concept of risk/reward," said Gamper.
OTHER HIGHLIGHTS:
- Financing and leasing assets totaled $14.5 billion, up 1.3 percent
from $14.3 billion at March 31, 1994 and 14.3 percent from $12.7
billion at June 30, 1993. The increase from last year includes the
acquisition of BCC and continued growth in most operating units.
- Net interest revenue rose to $193.2 million in the second quarter
of 1994, up 14.7 percent from $168.5 million in the second quarter
of 1993, reflecting the improved fee income and interest from the
higher levels of financing and leasing assets, offset in part by a
rise in short-term market interest rates during 1994.
- Operating expenses before the provision for credit losses totaled
$86.4 million, 2.58 percent of average financing and leasing
assets, versus $68.9 million, 2.24 percent of average financing and
leasing assets in the second quarter of 1993. The increases are
largely attributable to incremental expenses of the recently
acquired BCC factoring unit and the expanded Consumer Finance
operation.
- Net charge-offs for the second quarter of 1994 were $23.1 million,
0.67 percent of average finance receivables, compared to $22.2
million, 0.72 percent of average finance receivables for the second
quarter of 1993.
- Finance receivables past due 60 days or more declined to $187.8
million (1.36 percent of finance receivables) at June 30, 1994
from $198.2 million (1.46 percent of finance receivables) at
March 31, 1994 and $216.1 million (1.71 percent of finance
receivables) at December 31, 1993. Past due receivables
on nonaccrual status were $117.0 million (0.85 percent of finance
receivables) at June 30, 1994 up from $105.6 million (0.78 percent
of finance receivables) at March 31, 1994 but improved from
$139.9 million (1.11 percent of finance receivables) at year-end
1993.
- Assets received in the settlement of loans were $67.6 million at
June 30, 1994, compared to $79.5 million at March 31, 1994 and
$87.0 million at December 31, 1993.
# # #
The CIT Group Holdings, Inc., one of the nation's largest asset-based
lenders, is owned 60 percent by The Dai-Ichi Kangyo Bank Limited, the largest
bank in the world, and 40 percent by Chemical Banking Corporation, one of the
largest bank holding companies in the United States.
(SEE ATTACHED TABLES FOR ADDITIONAL FINANCIAL DATA)
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THE CIT GROUP HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)
THREE MONTHS ENDED
JUNE 30,
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1994 % TO AEA 1993 % TO AEA
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Interest and fees earned $ 340,504 10.04%* $ 295,190 9.48%*
Interest expense 147,255 4.28 * 126,733 4.00 *
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Net interest revenue 193,249 5.76 168,457 5.48
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Gains on asset sales 3,371 .10 2,906 .10
Salaries and employee benefits 49,057 1.46 36,909 1.20
Other operating expenses 37,389 1.12 31,949 1.04
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Operating expenses before
provision for credit losses 86,446 2.58 68,858 2.24
Provision for credit losses
on net charge-offs 23,109 .67 ** 22,174 .72 **
Provision for credit losses
for reserve change 4,302 .13 4,718 .15
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Provision for credit
losses 27,411 .82 26,892 .88
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Total operating expenses 113,857 3.39 95,750 3.12
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Income before provision for
income taxes 82,763 2.47 75,613 2.46
Provision for income taxes 31,792 .95 29,010 .94
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Net income $ 50,971 1.52% $ 46,603 1.52%
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Average financing and
leasing assets (AEA) $13,426,457 $12,290,608
Average finance receivables $13,729,744 $12,280,962
* Excludes interest income and interest expense relating to interest-bearing
deposits
** Percent to average finance receivables
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THE CIT GROUP HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)
SIX MONTHS ENDED
JUNE 30,
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1994 % to AEA 1993 % to AEA
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Interest and fees earned $ 644,414 9.62%* $ 582,871 9.51%*
Interest expense 276,095 4.06 * 251,419 4.02 *
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Net interest revenue 368,319 5.56 331,452 5.49
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Gains on asset sales 10,996 .17 4,178 .07
Salaries and employee benefits 92,307 1.39 74,683 1.24
Other operating expenses 74,688 1.13 61,845 1.02
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Operating expenses before
provision for credit losses 166,995 2.52 136,528 2.26
Provision for credit losses
on net charge-offs 48,914 .74 ** 44,561 .74 **
Provision for credit losses
for reserve change 3,378 .05 6,632 .11
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Provision for credit losses 52,292 .79 51,193 .85
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Total operating expenses 219,287 3.31 187,721 3.11
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Income before provision for
income taxes 160,028 2.42 147,909 2.45
Provision for income taxes 61,022 .92 57,774 .96
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Net income $ 99,006 1.50% $ 90,135 1.49%
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Average financing and
leasing assets (AEA) $13,246,944 $12,069,068
Average finance receivables $13,247,293 $12,077,141
* Excludes interest income and interest expense relating to interest-bearing
deposits
** Percent to average finance receivables
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THE CIT GROUP HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar Amounts in Thousands)
June 30, December 31,
ASSETS 1994 1993
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Financing and leasing assets
Finance receivables (net of unearned finance
income of $1,541,365 and $1,482,069)
CORPORATE FINANCE
Capital Equipment Financing $ 4,322,804 $ 4,394,528
Business Credit 1,330,403 1,282,133
Credit Finance 709,059 645,642
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6,362,266 6,322,303
DEALER AND MANUFACTURER FINANCING
Industrial Financing 3,960,577 3,880,991
Sales Financing and Consumer Finance 1,604,720 1,438,865
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5,565,297 5,319,856
FACTORING
Commercial Services 1,851,670 981,935
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Finance receivables 13,779,233 12,624,094
Reserve for credit losses (183,112) (169,378)
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Net finance receivables 13,596,121 12,454,716
Equipment under operating lease, net 736,717 751,901
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Net financing and leasing assets 14,332,838 13,206,617
CASH AND CASH EQUIVALENTS
Cash 50,013 101,554
Interest-bearing deposits 24,000 -
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Cash and cash equivalents 74,013 101,554
Other assets 433,553 420,310
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TOTAL ASSETS $14,840,404 $13,728,481
LIABILITIES AND STOCKHOLDERS' EQUITY
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DEBT
Commercial paper $ 6,227,088 $ 6,516,139
Variable rate notes 2,462,500 1,686,500
Fixed rate notes 2,408,677 2,392,500
Subordinated fixed rate notes 300,000 200,000
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Total debt 11,398,265 10,795,139
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Credit balances of factoring clients 953,484 521,728
Accrued liabilities and payables 343,604 324,520
Deferred Federal income taxes and investment tax
credits 403,286 394,859
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Total liabilities 13,098,639 12,036,246
STOCKHOLDERS' EQUITY
Common stock - authorized, issued and
outstanding - 1,000 shares 250,000 250,000
Paid-in capital 408,320 408,320
Retained earnings 1,083,445 1,033,915
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Total stockholders' equity 1,741,765 1,692,235
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $14,840,404 $13,728,481
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