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 12, 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: April 12, 1994
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NEWS
(THE CIT GROUP, INC. LETTERHEAD)
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 IN 1994 FIRST QUARTER
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OF $48.0 MILLION;
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10.3 PERCENT INCREASE OVER 1993 FIRST QUARTER
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NEW YORK, NEW YORK, APRIL 12, 1994 --- The CIT Group Holdings,
Inc., one of the nation's leading asset-based finance companies, today
reported record net income of $48.0 million for the first quarter
ended March 31, 1994, an increase of 10.3 percent from the
$43.5 million reported for the first quarter of 1993. The rise in
earnings was principally due to improved net interest and other
revenue, reflecting the excellent finance receivables growth over the
past year.
"CIT's improved performance and growth is a reflection of the overall
improvement in the U.S. economy," said Albert R. Gamper, Jr., CIT
president and CEO. "This improvement looks very sustainable for 1994
unless the recent rise in interest rates discourages business and
consumer spending," he added.
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During the first quarter, CIT completed the acquisition of Barclays
Commercial Corporation, a major provider of factoring, commercial
finance and credit-related services, from the Barclays Group. The
acquisition added over $700.0 million in finance receivables and
affirms CIT's leadership position in the factoring industry.
OTHER HIGHLIGHTS:
- - Financing and leasing assets totaled $14.3 billion, up 7.1
percent from $13.4 billion at December 31, 1993 and 13.5
percent from $12.6 billion at March 31, 1993. The increase
from year-end reflects continued growth from new business
financings in most operating units, the acquisition of Barclays
Commercial Corporation and a seasonal increase in factored
receivables.
- - Net interest revenue rose to $175.1 million in the first
quarter of 1994, up 7.4 percent from $163.0 million in the
first quarter of 1993, reflecting earnings on the higher level
of financing and leasing assets, offset in part by reduced
interest rate margins as rates charged on earning assets
increased more slowly than rates paid on the related
liabilities.
- - Gains on asset sales were $7.6 million, up sharply from $1.3
million in the first quarter of 1993 and included a gain from
securitizing $150 million of recreation vehicle receivables in
January 1994.
- - Operating expenses before the provision for credit losses
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totaled $80.5 million, 2.47 percent of average financing and
leasing assets, versus $67.7 million, 2.29 percent of average
financing and leasing assets in the first quarter of 1993. The
increases are primarily attributable to several factors,
including the recently completed Barclays acquisition,
continued expansion of the Consumer Finance operation, and
certain non-recurring charges associated with restructuring the
Sales Financing sales office network.
- - Net charge-offs for the first quarter of 1994 were $25.8
million, 0.80 percent of average finance receivables, compared
to $22.4 million, 0.75 percent of average finance receivables
for the first quarter of 1993.
- - Finance receivables past due 60 days or more fell to $198.2
million (1.46 percent of finance receivables) at March 31,
1994, down from $216.1 million (1.71 percent of finance
receivables) at December 31, 1993. Past due receivables on
nonaccrual status declined to $105.6 million (0.78 percent of
finance receivables) at March 31, 1994 from $139.9 million
(1.11 percent of finance receivables) at year-end 1993.
- - Assets received in the settlement of loans were $79.5 million
at March 31, 1994, compared to $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
March 31
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1994 % to AEA 1993 % to AEA
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Interest and fees earned $ 303,910 9.23%* $ 287,681 9.55%*
Interest expense 128,840 3.86 * 124,686 4.04 *
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Net interest revenue 175,070 5.37 162,995 5.51
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Gains on asset sales 7,625 .24 1,272 .04
Salaries and employee benefits 43,250 1.33 37,774 1.28
Other operating expenses 37,299 1.14 29,896 1.01
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Operating expenses before
provision for credit losses 80,549 2.47 67,670 2.29
Provision for credit losses
on net charge-offs 25,805 .80 ** 22,387 .75 **
Provision for credit losses
for reserve change (924) (.03) 1,914 .06
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Provision for credit losses 24,881 .77 24,301 .82
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Total operating expenses 105,430 3.24 91,971 3.11
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Income before provision for
income taxes 77,265 2.37 72,296 2.44
Provision for income taxes 29,230 .89 28,764 .97
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Net income $ 48,035 1.48% $ 43,532 1.47%
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Average financing and
leasing assets (AEA) $13,024,231 $11,837,338
Average finance receivables$12,850,556 $11,891,369
* 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)
March 31, December 31,
1994 1993
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ASSETS
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FINANCING AND LEASING ASSETS
Finance receivables (net of unearned
finance income of $1,438,677
and $1,482,069)
CORPORATE FINANCE
Capital Equipment Financing $ 4,270,205 $ 4,394,528
Business Credit 1,228,345 1,282,133
Credit Finance 690,761 645,642
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6,189,311 6,322,303
DEALER AND MANUFACTURER FINANCING
Industrial Financing 3,900,134 3,880,991
Sales Financing and Consumer Finance 1,536,750 1,438,865
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5,436,884 5,319,856
FACTORING
Commercial Services 1,963,950 981,935
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Finance receivables 13,590,145 12,624,094
Reserve for credit losses (180,046) (169,378)
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Net finance receivables 13,410,099 12,454,716
Equipment under operating lease, net 738,733 751,901
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Net financing and leasing assets 14,148,832 13,206,617
CASH AND CASH EQUIVALENTS
Cash 49,153 101,554
Interest-bearing deposits 17,000 -
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Cash and cash equivalents 66,153 101,554
OTHER ASSETS 391,261 420,310
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TOTAL ASSETS $14,606,246 $13,728,481
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LIABILITIES AND STOCKHOLDERS' EQUITY
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DEBT
Commercial paper $ 6,202,936 $ 6,516,139
Variable rate notes 2,187,500 1,686,500
Fixed rate notes 2,385,000 2,392,500
Subordinated fixed rate notes 300,000 200,000
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Total debt 11,075,436 10,795,139
Credit balances of factoring clients 1,009,940 521,728
Accrued liabilities and payables 410,370 324,520
Deferred Federal income taxes and
investment tax credits 394,826 394,859
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Total liabilities 12,890,572 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 1,057,354 1,033,915
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Total stockholders' equity 1,715,674 1,692,235
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $14,606,246 $13,728,481
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