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 13, 1995
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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 M. LEONE
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Joseph M. Leone
Executive Vice President and
Chief Financial Officer
Dated: July 19, 1995
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[Logo of The CIT Group, Inc.]
Contact: Joseph M. Leone
Chief Financial Officer
(201)740-5752
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 - $56.5 MILLION
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FOR SECOND QUARTER 1995 AND $109.3 MILLION FOR FIRST SIX MONTHS OF 1995;
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INCREASES OVER 10 PERCENT FROM 1994
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NEW YORK, NEW YORK, July 13, 1995 --- The CIT Group Holdings, Inc., one of
the nation's leading asset-based finance companies, today reported record net
income of $56.5 million for the quarter ended June 30, 1995, an increase of 10.9
percent from the $51.0 million reported for the 1994 second quarter. Net income
for the first six months of 1995, also a record, totaled $109.3 million, an
increase of 10.4 percent from $99.0 million in 1994. The improvements reflect
continuing growth in financing and leasing assets, lower net credit losses and
improved operating expense efficiencies offset, in part, by increased borrowing
costs due to higher market interest rates.
"CIT's 1995 earnings momentum continues across all operating units,
reflecting our key business fundamentals -- strong new business generation and
excellent credit quality. These results are particularly satisfying in light of
the economy's uneven performance this year," said Albert R. Gamper, Jr., CIT
president and chief executive officer. "Based on the significant decline in
long-term interest rates along with the Federal Reserve's recent easing of
short-term rates, we anticipate a positive business environment for CIT over the
balance of 1995."
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-2-
Other highlights:
o Financing and leasing assets totaled $16.09 billion, up $429.4 million from
$15.66 billion at December 31, 1994 and up $1.58 billion from $14.52
billion at June 30, 1994. The increases reflect continued strong volume in
most business units offset, in part, by a decline in factored receivable
volume due to seasonal influences and continued weak retail sales.
o Net finance income rose to $171.5 million in the second quarter of 1995, up
from $168.3 million in the second quarter of 1994. For the six months ended
June 30, 1995, net finance income totaled $336.1 million, an increase of
$10.7 million from $325.4 million in 1994. The increases reflect a higher
level of financing and leasing assets, offset by higher market interest
rates on borrowed funds.
o Fees and other income totaled $41.9 million in the 1995 second quarter
compared with $44.9 million in 1994 reflecting lower factoring commissions
and other income, which offset higher gains on asset sales. For the six
months ended June 30, 1995, fees and other income totaled $85.2 million, up
slightly from $84.8 million in 1994.
o Salaries and general operating expenses totaled $82.3 million in the 1995
second quarter, down $4.2 million (4.8%) from $86.4 million, in 1994.
Year-to-date, such expenses were relatively unchanged, totaling $167.1
million compared with $167.0 million in 1994. As a percent of average
financing and leasing assets, salaries and general operating expenses
improved to 2.16 percent for the quarter ended June 30, 1995 compared with
2.57 percent in 1994 and 2.22 percent for the first six months of 1995
compared with 2.52 percent for the comparable 1994 period. The improvements
reflect expense control initiatives and CIT's ability to grow and service
financing and leasing assets within the existing structure.
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-3-
o Net credit losses for the second quarter of 1995 were $17.3 million, 0.46
percent of average finance receivables, down from $23.1 million, 0.67
percent of average finance receivables for the second quarter of 1994.
Year-to-date net credit losses totaled $34.7 million, 0.46 percent of
average finance receivables, down from $48.9 million, 0.74 percent of
average finance receivables in 1994.
o Finance receivables past due 60 days or more totaled $194.9 million (1.28
percent of finance receivables) at June 30, 1995, compared with $176.9
million (1.20 percent of finance receivables) at December 31, 1994. Past
due finance receivables on nonaccrual status declined to $93.3 million
(0.62 percent of finance receivables) at June 30, 1995 from $110.2 million
(0.75 percent of finance receivables) at year-end 1994.
o Assets received in the settlement of loans were $84.8 million at June 30,
1995, compared with $86.5 million at December 31, 1994.
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, the
third largest bank holding company in the United States.
(SEE ATTACHED TABLES FOR ADDITIONAL FINANCIAL DATA)
# # #
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<TABLE>
THE CIT GROUP HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)
THREE MONTHS ENDED
JUNE 30
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1995 % TO AEA 1994 % TO AEA
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<S> <C> <C> <C> <C>
Finance income ............................................... $ 380,520 9.95%* $315,538 9.29%*
Interest expense ............................................. 208,988 5.44* 147,255 4.28*
------------ ---- -------- ----
Net finance income ......................................... 171,532 4.51 168,283 5.01
Fees and other income ........................................ 41,871 1.10 44,925 1.34
------------ ---- -------- ----
Operating revenue .......................................... 213,403 5.61 213,208 6.35
Salaries and general operating expenses ...................... 82,264 2.16 86,446 2.57
Net credit losses ............................................ 17,264 .46** 23,109 .67**
Provision for finance receivables increase ................... 4,994 .13 4,302 .13
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Provision for credit losses ................................ 22,258 .59 27,411 .82
Depreciation on operating lease equipment .................... 17,176 .45 16,588 .49
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Operating expenses ......................................... 121,698 3.20 130,445 3.88
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Income before provision for income taxes ..................... 91,705 2.41 82,763 2.47
Provision for income taxes ................................... 35,192 .92 31,792 .95
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Net income ................................................. $ 56,513 1.49% $ 50,971 1.52%
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Average financing and leasing assets (AEA) ................... $ 15,224,311 $13,437,698
Average finance receivables .................................. $ 15,051,602 $13,729,744
</TABLE>
* Excludes interest income and interest expense relating to interest-bearing
deposits
** Percent to average finance receivables
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<TABLE>
THE CIT GROUP HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)
SIX MONTHS ENDED
JUNE 30
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1995 % TO AEA 1994 % TO AEA
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<S> <C> <C> <C> <C>
Finance income ............................................ $ 744,263 9.86%* $601,506 8.98%*
Interest expense .......................................... 408,186 5.38* 276,095 4.06*
----------- ---- -------- ----
Net finance income ...................................... 336,077 4.48 325,411 4.92
Fees and other income ..................................... 85,215 1.13 84,782 1.28
----------- ---- -------- ----
Operating revenue ....................................... 421,292 5.61 410,193 6.20
Salaries and general operating expenses ................... 167,101 2.22 166,995 2.52
Net credit losses ......................................... 34,726 .46** 48,914 .74**
Provision for finance receivables increase ................ 8,458 .11 3,378 .05
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Provision for credit losses ............................. 43,184 .58 52,292 .79
Depreciation on operating lease equipment ................. 34,815 .46 30,878 .47
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Operating expenses ...................................... 245,100 3.26 250,165 3.78
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Income before provision for income taxes .................. 176,192 2.35 160,028 2.42
Provision for income taxes ................................ 66,867 .89 61,022 .92
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Net income .............................................. $ 109,325 1.46% $ 99,006 1.50%
=========== ==== ======== ====
Average financing and leasing assets (AEA) ................ $15,028,270 $13,246,944
Average finance receivables ............................... $14,904,367 $13,247,293
</TABLE>
* 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 BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS)
JUNE 30, DECEMBER 31,
1995 1994
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ASSETS
FINANCING AND LEASING ASSETS
Capital Equipment Financing .................... $ 4,406,207 $ 4,493,531
Business Credit ................................ 1,678,241 1,442,049
Credit Finance ................................. 761,635 719,642
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Corporate Finance ............................ 6,846,083 6,655,222
Commercial Services ............................ 1,559,047 1,896,233
Industrial Financing ........................... 4,535,344 4,269,693
Sales Financing ................................ 1,435,963 1,402,443
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Dealer and Manufacturer Financing ............ 5,971,307 5,672,136
Consumer Finance ............................... 788,317 570,772
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Finance receivables .......................... 15,164,754 14,794,363
Reserve for credit losses ...................... (200,345) (192,421)
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Net finance receivables ...................... 14,964,409 14,601,942
Operating lease equipment ...................... 926,959 867,914
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Net financing and leasing assets ............. 15,891,368 15,469,856
CASH AND CASH EQUIVALENTS ...................... 25,428 6,558
OTHER ASSETS ................................... 521,297 487,076
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TOTAL ASSETS ................................. $ 16,438,093 $ 15,963,490
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LIABILITIES AND STOCKHOLDERS' EQUITY
DEBT
Commercial paper ............................... $ 5,544,930 $ 5,660,194
Variable rate notes ............................ 3,977,500 3,812,500
Fixed rate notes ............................... 3,208,109 2,623,150
Subordinated fixed rate notes .................. 300,000 300,000
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Total debt ................................... 13,030,539 12,395,844
Credit balances of factoring clients ........... 698,331 993,394
Accrued liabilities and payables ............... 421,108 354,714
Deferred Federal income taxes .................. 440,548 426,511
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Total liabilities ............................ 14,590,526 14,170,463
STOCKHOLDERS' EQUITY
Common stock - authorized, issued and
outstanding - 1,000 shares ................... 250,000 250,000
Paid-in capital ................................ 408,320 408,320
Retained earnings .............................. 1,189,247 1,134,707
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Total stockholders' equity ................... 1,847,567 1,793,027
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ... $ 16,438,093 $ 15,963,490
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