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) January 18, 1996
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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: January 18, 1996
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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 1995 EARNINGS OF $225.3 MILLION
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UP 12.0 PERCENT OVER 1994
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FIFTH CONSECUTIVE YEAR OF RECORD EARNINGS
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NEW YORK, NEW YORK, January 18, 1996 -- The CIT Group Holdings, Inc., one
of the nation's leading asset-based finance companies, today reported net income
of $225.3 million for the year 1995, an increase of 12.0 percent from the $201.1
million for 1994. This represents the eighth consecutive increase in annual
earnings and the fifth consecutive year of record earnings. The 1995 results
reflect finance income from a higher level of financing and leasing assets,
improved other income, and lower net credit losses, offset by increased
borrowing costs. Fourth quarter earnings were particularly strong at $57.5
million, up 16.1 percent from the prior year. Total assets for 1995 reached a
record $17.42 billion.
"Outstanding marketing efforts, strong credit, technological improvements and
greater productivity make 1995 a most satisfying year and, more importantly,
positions CIT for even greater opportunities in the future," said Albert R.
Gamper, Jr., CIT president and chief executive officer.
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Financial highlights for 1995:
o Financing and leasing assets totaled $16.91 billion, up $1.25 billion
(8.0%) from $15.66 billion at December 31, 1994. The increase reflects
continued strong volume primarily in the Industrial Financing and Sales
Financing units as well as growth of the Consumer Finance business,
offset by securitizations of certain Sales Financing receivables.
o Net finance income rose to $697.7 million (4.54% of average financing
and leasing assets "AEA") in 1995, compared to $649.9 million (4.77% of
AEA) in 1994. The changes reflect the continued growth in financing and
leasing assets, offset partially by higher interest expense.
o Fees and other income totaled $184.7 million in 1995 compared to $174.4
million in 1994, reflecting higher gains on asset sales and improved
fee generation, partially offset by lower factoring commissions due to
a weak 1995 retailing environment.
o Salaries and general operating expenses for 1995 increased only 2.3
percent from 1994, reflecting significant productivity gains as
financing and leasing assets grew 8.0 percent during 1995. As a percent
of AEA, expenses improved to 2.25 percent during 1995 from 2.48 percent
in 1994. This productivity reflects further investments in operations
across most business units and the continued growth of the Consumer
Finance franchise.
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o Net credit losses during 1995 were $77.2 million, 0.50 percent of
average finance receivables, a decrease from $84.2 million, 0.61
percent of average finance receivables for the year 1994.
o Finance receivables past due 60 days or more were $263.9 million (1.67%
of finance receivables) at December 31, 1995 up from $176.9 million
(1.20% of finance receivables) at December 31, 1994. Past due finance
receivables on nonaccrual status totaled $139.5 million (0.88% of
finance receivables) at December 31, 1995 compared to $110.2 million
(0.75% of finance receivables) at the end of 1994.
o Assets received in the settlement of loans were $42.0 million at
December 31, 1995, down from $86.5 million at December 31, 1994.
o The reserve for credit losses stood at $206.0 million at year end 1995,
a $13.6 million increase from the prior year and represented 1.30
percent of finance receivables for both periods.
o The ratio of debt-to-equity was 7.09 to 1 at December 31, 1995 compared
to 6.91 to 1 at December 31, 1994.
The CIT Group Holdings, Inc., one of the nation's largest asset-based
lenders, is owned 80 percent by The Dai-Ichi Kangyo Bank, Limited, one of the
largest banks in the world, and 20 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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<TABLE>
THE CIT GROUP HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(Dollar Amounts in Thousands)
<CAPTION>
Years Ended
December 31
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1995 % to AEA 1994 % to AEA
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<S> <C> <C> <C> <C>
Finance income ....................................... $ 1,529,234 9.90%* $ 1,263,846 9.19%*
Interest expense ..................................... 831,531 5.36* 613,957 4.42*
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Net finance income ................................. 697,703 4.54 649,889 4.77
Fees and other income ................................ 184,709 1.20 174,365 1.28
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Operating revenue .................................. 882,412 5.74 824,254 6.05
Salaries and general operating expenses .............. 345,708 2.25 337,936 2.48
Net credit losses .................................... 77,241 .50** 84,152 .61**
Provision for increase in finance receivables ........ 14,683 .10 12,789 .09
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Provision for credit losses ........................ 91,924 .60 96,941 .71
Depreciation on operating lease equipment ............ 79,752 .52 64,308 .47
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Operating expenses ................................. 517,384 3.37 499,185 3.66
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Income before provision for income taxes ............. 365,028 2.37 325,069 2.39
Provision for income taxes ........................... 139,777 .91 123,941 .91
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Net income ......................................... $ 225,251 1.46% $ 201,128 1.48%
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Average financing and leasing assets (AEA) ........... $15,377,470 $13,630,256
Average finance receivables .......................... $15,397,762 $13,819,916
<FN>
* Excludes interest income and interest expense relating to interest-bearing deposits
** Percent to average finance receivables
</FN>
</TABLE>
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<TABLE>
THE CIT GROUP HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar Amounts in Thousands)
December 31, December 31,
<CAPTION>
1995 1994
<S> <C> <C>
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Assets
Financing and leasing assets
Capital Equipment Financing ....................................................................... $ 4,548,677 $ 4,493,531
Business Credit ................................................................................... 1,470,981 1,442,049
Credit Finance .................................................................................... 758,729 719,642
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Corporate Finance ............................................................................... 6,778,387 6,655,222
Commercial Services ............................................................................... 1,743,322 1,896,233
Industrial Financing .............................................................................. 4,929,858 4,269,693
Sales Financing ................................................................................... 1,304,921 1,402,443
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Dealer and Manufacturer Financing ............................................................... 6,234,779 5,672,136
Consumer Finance .................................................................................. 1,039,044 570,772
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Finance receivables ............................................................................. 15,795,532 14,794,363
Reserve for credit losses ......................................................................... (206,027) (192,421)
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Net finance receivables ......................................................................... 15,589,505 14,601,942
Operating lease equipment ......................................................................... 1,113,007 867,914
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Net financing and leasing assets ................................................................ 16,702,512 15,469,856
Cash and cash equivalents ......................................................................... 161,464 6,558
Other assets ...................................................................................... 556,322 483,276
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Total assets .................................................................................... $ 17,420,298 $ 15,959,690
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Liabilities and Stockholders' Equity
Debt
Commercial paper .................................................................................. $ 6,105,569 $ 5,660,194
Variable rate notes ............................................................................... 3,827,500 3,812,500
Fixed rate notes .................................................................................. 3,337,030 2,619,350
Subordinated fixed rate notes ..................................................................... 300,000 300,000
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Total debt ...................................................................................... 13,570,099 12,392,044
Credit balances of factoring clients .............................................................. 980,916 993,394
Accrued liabilities and payables .................................................................. 485,854 354,714
Deferred Federal income taxes ..................................................................... 469,238 426,511
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Total liabilities ............................................................................... 15,506,107 14,166,663
Stockholders' equity
Common stock - authorized, issued and outstanding - 1,000 shares .................................. 250,000 250,000
Paid-in capital ................................................................................... 408,320 408,320
Retained earnings ................................................................................. 1,255,871 1,134,707
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Total stockholders' equity ...................................................................... 1,914,191 1,793,027
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Total liabilities and stockholders' equity ...................................................... $ 17,420,298 $ 15,959,690
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</TABLE>
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