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 11, 1996
------------------
The CIT Group Holdings, Inc.
- ------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-1861 13-2994534
- ------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1211 Avenue of the Americas
New York, New York 10036
- ------------------------------------------------------------------
Registrant's telephone number, including area code (212) 536-1950
---------------
- ------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
-------------
See attached press release.
<PAGE>
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.
------------------------------
(Registrant)
By /s/ JOSEPH M. LEONE
----------------------------
Joseph M. Leone
Executive Vice President and
Chief Financial Officer
Dated: April 11, 1996
<PAGE>
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
THE CIT GROUP REPORTS RECORD QUARTERLY EARNINGS OF $59.8 MILLION
FOR FIRST QUARTER 1996;
13 PERCENT INCREASE OVER 1995 FIRST QUARTER
NEW YORK, NEW YORK, APRIL 11, 1996 --- The CIT Group Holdings,
Inc., one of the nation's leading asset-based finance companies, today reported
record net income of $59.8 million for the first quarter ended March 31, 1996, a
13 percent increase from the $52.8 million reported for the first quarter of
1995. The improvement was principally due to growth in average financing and
leasing assets, and increased fees and other income, partially offset by
increased operating expenses.
"We are pleased with our highest ever quarterly earnings
performance, particularly in light of the mixed signals in the U. S. economy,"
said Albert R. Gamper, Jr., CIT president and chief executive officer. "These
mixed signals are evidenced in our business with several units showing strong
growth in originations in the quarter while other units experienced modest
volume. We also see uneven patterns geographically and by industry. With CIT's
product and business diversity, and nationwide reach, I believe we are well
positioned for continued strong performance in this economic environment," added
Gamper.
1
<PAGE>
Other highlights:
o Financing and leasing assets totaled $17.03 billion, up $124.7 million
from $16.91 billion at December 31, 1995. Strong originations in the
consumer related business units and in Industrial Financing were offset
by higher liquidations, securitizations and syndications of finance
receivables.
o Net finance income rose to $195.4 million in the first quarter of 1996,
up 19 percent from $164.5 million in the first quarter of 1995. As a
percentage of average financing and leasing assets "AEA", net finance
income rose to 4.86 percent from 4.45 percent in last year's first
quarter. The improvements reflect a higher level of average financing
and leasing assets, up 8% from the first quarter of 1995, as well as
higher fees on account terminations and lower borrowing costs.
o Fees and other income totaled $52.7 million in 1996, up 22 percent
compared to $43.4 million in 1995. The increase is primarily
attributable to gains on sales of equipment and receivables which
totaled $12.5 million for the first quarter of 1996, up from $6.5
million in 1995. Factoring commissions were down slightly compared to
the same period last year.
o Salaries and general operating expenses totaled $95.9 million, 2.39
percent of AEA, versus $84.8 million, 2.29 percent of AEA in the first
quarter of 1995. The increase in operating expenses is generally
attributable to the growth in the consumer related business units. As a
percentage of average managed assets, operating expenses improved to
2.16 percent for the first quarter of 1996, compared to 2.19 percent in
1995.
2
<PAGE>
o Depreciation on operating lease equipment for the first quarter of 1996
was $27.5 million, up from $17.6 million for the same period in 1995,
as the operating lease portfolio grew 32% from March 31, 1995.
o Net credit losses for the first quarter of 1996 totaled $25.4 million,
0.64 percent of average finance receivables, up from $17.5 million,
0.47 percent of average finance receivables, for the first quarter of
1995. The increase was primarily attributable to repossession expenses
related to certain nonaccrual shipping and cruise line vessels.
o Finance receivables past due 60 days or more declined to $242.5 million
(1.52% of finance receivables) at March 31, 1996, from $263.9 million
(1.67% of finance receivables) at December 31, 1995. Past due finance
receivables on nonaccrual status decreased to $84.8 million (0.53% of
finance receivables) at March 31, 1996 from $139.5 million (0.88% of
finance receivables) at year-end 1995, reflecting transfers of certain
shipping and cruise line vessels to assets received in satisfaction of
loans.
o Assets received in satisfaction of loans were $90.3 million at March
31, 1996, compared to $42.0 million at December 31, 1995, due to the
previously mentioned transfers.
o Total nonperforming assets, comprised of past due finance receivables
on nonaccrual status and assets received in satisfaction of loans were
$175.1 million at March 31, 1996 down from $181.5 million at year end.
As a percentage of finance receivables, total nonperforming assets
declined to 1.10 percent at March 31, 1996 from 1.15 percent at
December 31, 1995.
o The reserve for credit losses grew to $208.6 million at quarter-end
from $206.0 million at year-end 1995.
3
<PAGE>
o The ratio of debt-to-equity was 7.02 to 1 at March 31, 1996 compared to
7.09 to 1 at December 31, 1995.
The CIT Group Holdings, Inc., one of the nation's largest
commercial and consumer lending organizations, is owned 80 percent by The
Dai-Ichi Kangyo Bank, Limited, one of the largest banks in the world, and 20
percent by The Chase Manhattan Corporation, the largest bank holding company in
the United States.
(SEE ATTACHED TABLES FOR ADDITIONAL FINANCIAL DATA)
# # #
4
<PAGE>
<TABLE>
THE CIT GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(Dollar Amounts in Millions)
<CAPTION>
Three Months Ended
March 31
1996 % to AEA 1995 % to AEA
--------- -------- ------ --------
<S> <C> <C> <C> <C>
Finance income ........................... $402.6 9.97%* $363.7 9.78%*
Interest expense ......................... 207.2 5.11* 199.2 5.33*
------ ---- ------ ----
Net finance income ..................... 195.4 4.86 164.5 4.45
Fees and other income .................... 52.7 1.31 43.4 1.17
------ ---- ------ ----
Operating revenue ...................... 248.1 6.17 207.9 5.62
------ ---- ----- ----
Salaries and general operating expenses .. 95.9 2.39 84.8 2.29
Net credit losses ........................ 25.4 0.64** 17.5 0.47**
Provision for finance receivables increase 2.4 0.06 3.5 0.09
------ ---- ----- ----
Provision for credit losses ............ 27.8 0.69 21.0 0.57
Depreciation on operating lease equipment 27.5 0.68 17.6 0.47
------ ---- ----- ----
Operating expenses ..................... 151.2 3.76 123.4 3.33
------ ---- ----- ----
Income before provision for income taxes . 96.9 2.41 84.5 2.29
Provision for income taxes ............... 37.1 0.92 31.7 0.86
------ ---- ----- ----
Net income ............................. $ 59.8 1.49% $ 52.8 1.43%
====== ==== ====== ====
Average financing and leasing assets (AEA) $16,065.6 $14,808.3
Average finance receivables $15,788.7 $14,884.3
<FN>
* Excludes interest income and interest expense relating to interest-bearing
deposits
** Percent to average finance receivables
</FN>
</TABLE>
<PAGE>
<TABLE>
THE CIT GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar Amounts in Millions)
<CAPTION>
March 31, December 31,
1996 1995
---------- -----------
<S> <C> <C>
ASSETS
Financing and leasing assets
Loans
Commercial ...................................................................... $10,382.2 $10,356.3
Consumer ........................................................................ 2,471.0 2,344.0
Lease receivables .................................................................. 3,057.3 3,095.2
--------- ---------
Finance receivables ............................................................. 15,910.5 15,795.5
Reserve for credit losses .......................................................... (208.6) (206.0)
--------- ---------
Net finance receivables ......................................................... 15,701.9 15,589.5
Operating lease equipment .......................................................... 1,122.7 1,113.0
Cash and cash equivalents .......................................................... 104.2 161.5
Other assets ....................................................................... 554.2 556.3
--------- ---------
Total assets .................................................................... $17,483.0 $17,420.3
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Debt
Commercial paper ................................................................... $ 5,947.4 $ 6,105.6
Variable rate senior notes ......................................................... 4,127.5 3,827.5
Fixed rate senior notes ............................................................ 3,221.5 3,337.0
Subordinated fixed rate notes ...................................................... 300.0 300.0
--------- ---------
Total debt ...................................................................... 13,596.4 13,570.1
Credit balances of factoring clients ............................................... 985.8 980.9
Accrued liabilities and payables ................................................... 498.8 485.9
Deferred Federal income taxes ...................................................... 465.9 469.2
--------- ---------
Total liabilities ............................................................... 15,546.9 15,506.1
Stockholders' equity
Common stock - authorized, issued and
outstanding - 1,000 shares ...................................................... 250.0 250.0
Paid-in capital .................................................................... 408.3 408.3
Retained earnings .................................................................. 1,277.8 1,255.9
--------- ---------
Total stockholders' equity ...................................................... 1,936.1 1,914.2
--------- ---------
Total liabilities and stockholders' equity ...................................... $17,483.0 $17,420.3
========= =========
</TABLE>
