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) October 13, 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: October 21, 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 OF $52.6 MILLION IN 1994 THIRD QUARTER;
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UP 10.8 PERCENT OVER 1993 THIRD QUARTER;
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NINE MONTH EARNINGS UP 10.2 PERCENT TO A RECORD $151.6 MILLION
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NEW YORK, NEW YORK, OCTOBER 13, 1994 --- The CIT Group Holdings, Inc.,
one of the nation's leading asset-based finance companies, today reported
record net income of $52.6 million for the quarter ended September 30, 1994,
an increase of 10.8 percent from $47.4 million reported for the third quarter
of 1993. Net income for the first nine months of 1994 was a record $151.6
million, a 10.2 percent increase over $137.6 million reported in the prior
year. The record 1994 earnings gains reflect improved interest income from
continued growth in financing and leasing assets, increased factoring
commissions, and lower charge-offs as a result of improved credit quality.
The 1994 earnings reflect the acquisition of Barclays Commercial Corporation
(BCC) on February 28, 1994 which added over $700.0 million of factored
receivables.
"CIT's strong third quarter and nine months performance continues the
trend of disciplined growth and excellent portfolio credit quality which
prompted the recent upgrades in our senior debt ratings to AA- by Duff &
Phelps and Aa3 by Moody's ," said Albert R. Gamper, Jr., CIT president and
CEO.
(more)
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OTHER HIGHLIGHTS:
- Financing and leasing assets totaled $15.2 billion, up 4.4 percent
from $14.5 billion at June 30, 1994 and 13.3 percent from $13.4
billion at December 31, 1993. The increases resulted from
continued growth in middle market financing, home equity lending,
traditional commercial finance, and a seasonal increase in factored
receivables.
- Net interest and fees rose to $181.5 million in the third quarter
of 1994, up 2.6 percent from $176.9 million in the third quarter of
1993. For the first nine months of 1994, net interest and fees
totaled $549.8 million, an increase of 8.2 percent from $508.4
million in 1993. The improvements reflect interest from the higher
levels of financing and leasing assets and increased factoring
commissions, offset in part by higher funding costs due to rising
1994 market interest rates.
- Operating expenses before the provision for credit losses totaled
$85.2 million, 2.48 percent of average financing and leasing assets
(AEA) in the third quarter of 1994, versus $73.0 million, 2.37
percent of AEA in the third quarter of 1993. For the nine months
ended September 30, 1994, operating expenses before the provision
for credit losses totaled $252.2 million, 2.51 percent of AEA,
compared with $209.5 million, 2.30 percent of AEA, in the
comparable 1993 period. Operating expenses in 1994 reflect
incremental expenses associated with the BCC acquisition and the
expanded Consumer Finance operation, and normal expense increases.
- Net charge-offs for the third quarter of 1994 were $18.2 million,
0.52 percent of average finance receivables (AFR), compared with
$27.2 million, 0.88 percent for the third quarter of 1993. For the
nine months ended September 30, 1994, net charge-offs totaled $67.1
million, 0.66 percent of AFR compared with $71.8 million, 0.79
percent in 1993.
(more)
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- The 1993 third quarter and nine month results include a $10.3
million net charge to record the effect of a one percent increase
in the corporate Federal income tax rate enacted in August 1993.
- Finance receivables past due 60 days or more were $214.5 million
(1.49 percent of finance receivables) at September 30, 1994
compared with $187.8 million (1.36 percent of finance receivables)
at June 30, 1994 and $216.1 million (1.71 percent of finance
receivables) at December 31, 1993. Past due receivables on
nonaccrual status were $128.7 million (0.90 percent of finance
receivables) at September 30, 1994 up from $117.0 million (0.85
percent of finance receivables) at June 30, 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 $60.4 million at
September 30, 1994, compared to $67.6 million at June 30, 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, one of the
largest banks 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 BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS)
SEPTEMBER 30, DECEMBER 31,
ASSETS 1994 1993
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FINANCING AND LEASING ASSETS
Finance receivables (net of unearned finance
income of $1,359,980 and $1,482,069)
CORPORATE FINANCE
Capital Equipment Financing $ 4,313,364 $ 4,394,528
Business Credit 1,406,090 1,282,133
Credit Finance 714,346 645,642
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6,433,800 6,322,303
DEALER AND MANUFACTURER FINANCING
Industrial Financing 4,069,811 3,880,991
Sales Financing and Consumer Finance 1,751,936 1,438,865
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5,821,747 5,319,856
FACTORING
Commercial Services 2,115,161 981,935
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Finance receivables 14,370,708 12,624,094
Reserve for credit losses (185,321) (169,378)
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Net finance receivables 14,185,387 12,454,716
Equipment under operating lease, net 790,692 751,901
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Net financing and leasing assets 14,976,079 13,206,617
CASH AND CASH EQUIVALENTS
Cash 24,379 101,554
Interest-bearing deposits 40,000 -
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Cash and cash equivalents 64,379 101,554
OTHER ASSETS 396,826 420,310
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TOTAL ASSETS $15,437,284 $13,728,481
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LIABILITIES AND STOCKHOLDERS' EQUITY
DEBT
Commercial paper $ 6,541,220 $ 6,516,139
Variable rate notes 2,412,500 1,686,500
Fixed rate notes 2,473,150 2,392,500
Subordinated fixed rate notes 300,000 200,000
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Total debt 11,726,870 10,795,139
Credit balances of factoring clients 1,155,480 521,728
Accrued liabilities and payables 377,051 324,520
Deferred Federal income taxes and
investment tax credits 409,971 394,859
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Total liabilities 13,669,372 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 1,109,592 1,033,915
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Total stockholders' equity 1,767,912 1,692,235
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $15,437,284 $13,728,481
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<PAGE>
THE CIT GROUP HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)
THREE MONTHS ENDED
SEPTEMBER 30,
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1994 % TO AEA 1993 % TO AEA
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Interest and fees earned $342,838 9.90%* $304,691 9.75%*
Interest expense 161,349 4.61 * 127,782 4.00 *
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Net interest and fees 181,489 5.29 176,909 5.75
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Gains on asset sales 9,920 .29 18,850 .61
Salaries and employee benefits 46,861 1.36 38,209 1.24
Other operating expenses 38,333 1.12 34,741 1.13
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Operating expenses before
provision for credit losses 85,194 2.48 72,950 2.37
Provision for credit losses
on net charge-offs 18,225 .52 ** 27,201 .88**
Provision for credit losses
for reserve change 1,816 .05 1,203 .04
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Provision for credit losses 20,041 .59 28,404 .92
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Total operating expenses 105,235 3.07 101,354 3.29
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Income before provision for
income taxes 86,174 2.51 94,405 3.07
Provision for income taxes 33,587 .98 46,956 1.53
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Net income $52,587 1.53% 47,449 1.54%
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Average financing and
leasing assets (AEA) $13,732,106 $12,319,181
Average finance receivables $14,059,245 $12,341,396
* Excludes interest income and interest expense relating to interest-bearing
deposits
** Percent to average finance receivables
<PAGE>
THE CIT GROUP HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)
NINE MONTHS ENDED
. SEPTEMBER 30,
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1994 % TO AEA 1993 % TO AEA
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Interest and fees earned $987,252 9.72%* $887,562 9.58%*
Interest expense 437,444 4.25 * 379,201 4.01 *
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Net interest and fees 549,808 5.47 508,361 5.57
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Gains on asset sales 20,916 .21 23,028 .26
Salaries and employee benefits 139,168 1.39 112,892 1.24
Other operating expenses 113,021 1.12 96,586 1.06
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Operating expenses before
provision for credit losses 252,189 2.51 209,478 2.30
Provision for credit losses
on net charge-offs 67,139 .66** 71,762 .79**
Provision for credit losses
for reserve change 5,194 .05 7,835 .09
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Provision for credit losses 72,333 .72 79,597 .87
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Total operating expenses 324,522 3.23 289,075 3.17
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Income before provision for
income taxes 246,202 2.45 242,314 2.66
Provision for income taxes 94,609 .94 104,730 1.15
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Net income $ 151,593 1.51% $137,584 1.51%
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Average financing and
leasing assets (AEA) $13,408,639 $12,171,821
Average finance receivables $13,518,880 $12,172,469
* Excludes interest income and interest expense relating to interest-bearing
deposits
** Percent to average finance receivables
