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 23, 1997
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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 23, 1997
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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 SIXTH CONSECUTIVE YEAR OF RECORD EARNINGS
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$260.1 MILLION, UP 15.5 PERCENT OVER 1995;
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NEW YORK, NEW YORK, January 23, 1997 --- The CIT Group Holdings, Inc.,
one of the nation's largest commercial and consumer lending organizations, today
reported record net income of $260.1 million for the year 1996, a 15.5 percent
increase from the $225.3 million reported for 1995. This represents the ninth
consecutive increase in annual earnings and the sixth consecutive year of record
earnings. Fourth quarter earnings were also strong, increasing to $62.8 million,
up 9.4 percent over 1995. The 1996 improvements were due to stronger revenues
from increased finance income, higher fees and other income, partially offset by
increased operating expenses.
"This year proved to be very rewarding for The CIT Group. Revenues
substantially increased as a result of improved fees, strong loan originations,
particularly in consumer and equipment financing, and gains on leased equipment
and venture capital investment sales," said Albert R. Gamper, Jr., president and
chief executive officer. "As we begin 1997, we believe that our broad base of
businesses and the growth we achieved in 1996 both position us well in this
highly competitive environment," added Gamper.
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FINANCIAL HIGHLIGHTS FOR 1996:
o Return on average financing and leasing assets ("AEA") for 1996 was 1.57
percent, up from 1.46 percent for 1995.
o Financing and leasing assets totaled $18.4 billion, up $1.5 billion (8.8%)
from $16.9 billion at December 31, 1995. This increase was driven by strong
growth in the consumer and small to medium ticket equipment portfolios.
o Net finance income rose to $797.9 million (4.82% of AEA) in 1996, compared
to $697.7 million (4.54% of AEA) in 1995. The improvements reflect the
increase in average financing and leasing assets, lower borrowing costs and
higher fees on account terminations.
o Feesand other income totaled $244.1 million in 1996, up sharply from $184.7
million in 1995. The increase reflects higher gains from equipment sales
and venture capital investment transactions, as well as increased servicing
fees and higher factoring commissions.
o Salaries and general operating expenses for 1996 totaled $393.1 million
(2.38% of AEA) for 1996 versus $345.7 million (2.25% of AEA) in 1995. The
increase in expenses is primarily related to the growth in the consumer and
small to medium ticket equipment portfolios, and the servicing of a higher
managed consumer asset portfolio.
o Depreciation on operating lease equipment in 1996 was $121.7 million
compared to $79.7 million in 1995 due to growth in the operating lease
portfolio.
o Net credit losses during 1996 were $101.5 million, 0.62% of average finance
receivables, up from $77.2 million, 0.50% of average finance receivables
for the year of 1995.
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o Finance receivables on nonaccrual status declined to $119.6 million (0.70%
of finance receivables) at December 31, 1996 from $139.5 million (0.88% of
finance receivables) at the end of 1995. Finance receivables past due 60
days or more increased to $292.3 million (1.72% of finance receivables) at
December 31, 1996, from $263.9 million (1.67% of finance receivables) at
December 31, 1995.
o Assets received in the settlement of loans increased to $47.9 million at
December 31, 1996, from $42.0 million at December 31, 1995.
o Total nonperforming assets, comprised of finance receivables on nonaccrual
status and assets received in satisfaction of loans, declined to $167.5
million at December 31, 1996 from $181.5 million at year end 1995. As a
percentage of finance receivables, total nonperforming assets were 0.99
percent at December 31, 1996 down from 1.15 percent at December 31, 1995.
o The reserve for credit losses was $220.8 million at year-end 1996, a $14.8
million increase from the prior year and represented 1.30 percent of
finance receivables for both periods.
o Stockholders' equity totaled $2.1 billion and the ratio of debt-to-equity
was 7.04 to 1 at December 31, 1996 compared to 7.09 to 1 at December 31,
1995.
The CIT Group Holdings, Inc. 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)
# # #
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THE CIT GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS)
YEARS ENDED
DECEMBER 31,
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1996 % TO AEA 1995 % TO AEA
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Finance income $ 1,646.2 9.90%* $ 1,529.2 9.90%*
Interest expense 848.3 5.08* 831.5 5.36 *
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Net finance income 797.9 4.82 697.7 4.54
Fees and other income 244.1 1.48 184.7 1.20
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Operating revenue 1,042.0 6.30 882.4 5.74
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Salaries and general operating expenses 393.1 2.38 345.7 2.25
Net credit losses 101.5 0.62** 77.2 0.50**
Provision for finance receivables increase 9.9 0.06 14.7 0.10
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Provision for credit losses 111.4 0.67 91.9 0.60
Depreciation on operating lease equipment 121.7 0.74 79.7 0.52
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Operating expenses 626.2 3.79 517.3 3.37
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Income before provision for income taxes 415.8 2.51 365.1 2.37
Provision for income taxes 155.7 0.94 139.8 0.91
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Net income $ 260.1 1.57% $ 225.3 1.46%
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Average financing and leasing assets (AEA)$16,543.1 $15,377.5
Average finance receivables $16,352.2 $15,397.8
* 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 MILLIONS)
DECEMBER 31, DECEMBER 31,
1996 1995
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ASSETS
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FINANCING AND LEASING ASSETS
Loans
Commercial $10,195.6 $10,356.3
Consumer 3,562.0 2,344.0
Lease receivables 3,239.0 3,095.2
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Finance receivables 16,996.6 15,795.5
Reserve for credit losses (220.8) (206.0)
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Net finance receivables 16,775.8 15,589.5
Operating lease equipment 1,402.1 1,113.0
CASH AND CASH EQUIVALENTS 103.1 161.5
OTHER ASSETS 651.5 556.3
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TOTAL ASSETS $18,932.5 $17,420.3
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LIABILITIES AND STOCKHOLDERS' EQUITY
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DEBT
Commercial paper $ 5,827.0 $ 6,105.6
Variable rate senior notes 3,717.5 3,827.5
Fixed rate senior notes 4,761.2 3,337.0
Subordinated fixed rate notes 300.0 300.0
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Total debt 14,605.7 13,570.1
Credit balances of factoring clients 1,134.1 980.9
Accrued liabilities and payables 594.0 485.9
Deferred Federal income taxes 523.3 469.2
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Total liabilities 16,857.1 15,506.1
STOCKHOLDERS' EQUITY
Common stock - authorized, issued and
outstanding - 1,000 shares 250.0 250.0
Paid-in capital 573.3 408.3
Retained earnings 1,252.1 1,255.9
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Total stockholders' equity 2,075.4 1,914.2
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $18,932.5 $17,420.3
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