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 27, 1999
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The CIT Group, 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) 536-1390
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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 the attached press releases, which are incorporated herein by
reference, regarding:
1. The 1999 first quarter earnings, filed as Exhibit 99.1; and
2. The declaration of a dividend for the quarter ending March 31, 1999 of
$.10 per share, payable on June 1, 1999 to holders of record at the
close of business on May 12, 1999, filed as Exhibit 99.2.
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<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99.1 Press Release, dated April 27, 1999, Regarding 1999
First Quarter Earnings.
99.2 Press Release, dated 04/27/1999, Regarding Declaration
of a Dividend for the Quarter Ending March 31, 1999.
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<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, 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: April 27, 1999
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<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, INC.
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(Registrant)
By:
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Joseph M. Leone
Executive Vice President and
Chief Financial Officer
Dated: April 27, 1999
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<PAGE>
Exhibit 99.1
[The CIT Group, Inc. Logo]
Contact: Jeffrey Simon
Senior Vice President
Investor Relations
(973) 535-5911
FROM: THE CIT GROUP, INC.
1211 AVENUE OF THE AMERICAS
NEW YORK, NY 10036
FOR IMMEDIATE RELEASE
THE CIT GROUP ANNOUNCES RECORD FIRST QUARTER NET INCOME OF $91.9
MILLION, EPS UP 14% TO $.57_PER DILUTED SHARE
NEW YORK, NEW YORK, April 27, 1999 --- The CIT Group, Inc. (NYSE: CIT)
today announced record first quarter 1999 net income of $91.9 million, up 12.5%
from $81.7 million reported for the same period of 1998. Earnings per diluted
share for the first quarter were $0.57, up 14.0% from $0.50 for the first
quarter of last year. The record first quarter 1999 earnings reflect continued
strong portfolio growth, low commercial credit losses, and further improvements
in operating efficiency.
"I am extremely pleased with our first quarter accomplishments. We
announced our plans for the important strategic acquisition of Newcourt Credit,
and the employees of CIT delivered another solid financial performance with
strong operating fundamentals and quality growth. Additionally, early in the
second quarter we acquired a factoring portfolio that will contribute
immediately to earnings and permit us to further leverage our infrastructure,"
said Albert R. Gamper, Jr., CIT President and Chief Executive Officer. "Our
plan to acquire Newcourt during the third quarter is on track. We have put
<PAGE>
together integration teams, which are hard at work in preparing the integration
plan that will be implemented as soon as the necessary approvals are received.
We look forward to this transforming transaction, which will add further scale
and diversity to CIT, making us the largest publicly owned commercial financing
company in the world. This will create enhanced growth opportunities for CIT
and its shareholders."
Financial highlights:
Total managed assets increased to $27.1 billion at March 31,1999, up 16.3%
from $23.3 billion at March 31, 1998 and up 3.4% from $26.2 billion at
December 31, 1998. Commercial financing and leasing assets grew to
$19.1 billion, an increase of $2.7 billion or 16.4% from a year ago, and up
$0.7 billion or 4.0% from year-end 1998. Consumer managed assets increased to
$7.9 billion, up approximately $1.1 billion or 16.2% from a year ago, and up
1.8% from December 31, 1998.
Net finance income improved to $268.2 million in the first quarter from
$228.0 million in the same period last year. First quarter net finance income
as a percentage of average earning assets was 4.75%, compared to 4.78% in the
first quarter of 1998 and 4.71% in the fourth quarter of 1998.
Fees and other income for the first quarter of 1999 were $64.7 million,
compared to $66.4 million for the first quarter of 1998.
Strong growth in lending and factoring fees and other income, which increased
approximately $10 million, were offset by lower gains on sales of equipment
coming off lease and venture capital investments.
Salaries and general operating expenses for the first quarter of 1999
totaled $109.0 million, compared with $101.7 million for the prior year,
reflecting continued product expansion in the equipment finance segment,
incremental costs relating to the restructuring of our sales finance business,
and normal expense increases. Productivity and operating efficiency improved,
as evidenced by the decrease in the efficiency ratio to 40.1% in the 1999 first
quarter from 40.5% a year ago. Salaries and general operating expenses as
a percentage of average managed assets decreased to 1.73% for the period ended
March 31, 1999 from 1.90% for the period ended March 31, 1998.
<PAGE>
The provision for credit losses was $21.9 million in the 1999 first quarter,
down slightly from the prior year. First quarter net charge-offs were
$20.9 million, 0.42% of average finance receivables, compared to $20.0 million,
0.45%, for the same period last year. At March 31, 1999, the reserve for credit
losses was $265.8 million, up from $263.7 million at December 31, 1998 and
$240.2 million at March 31, 1998.
The CIT Group, Inc. is a leading diversified finance organization offering
secured commercial and consumer financing primarily in the United States to
smaller, middle-market and larger businesses and to individuals through a
nationwide distribution network.
(SEE ATTACHED TABLES FOR ADDITIONAL FINANCIAL DATA).
<PAGE>
THE CIT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(Dollars in Millions, except Net Income per Share)
For the Quarter
Ended March 31,
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1999 1998
Finance income $ 541.5 $ 472.6
Interest expense 273.3 244.6
Net finance income 268.2 228.0
Fees and other income 64.7 66.4
Operating revenue 332.9 _ 294.4
Salaries and general operating expenses 109.0 101.7
Provision for credit losses 21.9 22.5
Depreciation on operating lease equipment 56.1 38.3
Minority interest in subsidiary trust holding
solely debentures of the Company 4.8 4.8
Operating expenses 191.8 167.3
Income before provision for income taxes 141.1 127.1
Provision for income taxes 49.2 45.4
Net income $ 91.9 $ 81.7
Basic net income per share $0.57 $0.50
Weighted average shares outstanding 161,166,060 162,225,000
Diluted net income per share $0.57 $0.50
Weighted average shares outstanding 162,421,027 163,498,384
<PAGE>
THE CIT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Millions)
March 31, December 31,
1999 1998
Assets
Financing and leasing assets
Loans
Commercial $11,715.6 $11,415.5
Consumer 4,147.7 4,266.9
Lease receivables 4,212.8 4,173.6
Finance receivables 20,076.1 19,856.0
Reserve for credit losses (265.8) (263.7)
Net finance receivables 19,810.3 19,592.3
Operating lease equipment, net 3,178.2 2,774.1
Consumer finance receivables held for sale 985.4 987.4
Cash and cash equivalents 188.9 73.6
Other assets 905.8 875.7
Total assets $ 25,068.6 $ 24,303.1
Liabilities and Stockholders' Equity
Debt
Commercial paper $ 5,809.3 $ 6,144.1
Variable rate senior notes 4,426.1 4,275.0
Fixed rate senior notes 8,530.7 8,032.3
Subordinated fixed rate notes 200.0 200.0
Total debt 18,966.1 18,651.4
Credit balances of factoring clients 1,584.3 1,302.1
Accrued liabilities and payables 764.6 694.3
Deferred federal income taxes 729.9 703.7
Total liabilities 22,044.9 21,351.5
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely debentures of the Company 250.0 250.0
Stockholders' equity
Class A common stock, par value $0.01 per share;
Authorized 700,000,000 shares
Issued: 163,202,941 shares in 1999 and 163,144,879
shares in 1998
Outstanding: 161,998,220 shares in 1999 and 1.7 1.7
162,176,949 shares in 1998
Paid-in capital 956.1 952.5
Retained earnings 1,848.5 1,772.8
967,930 shares in 1998; Class A) (32.6) (25.4)
Total stockholders' equity 2,773.7 2,701.6
Total liabilities and stockholders' equity $25,068.6 $24,303.1
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THE CIT GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
Selected Data and Ratios For the Quarter Ended March 31,
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Profitability 1999 1998
Net income per diluted share $0.57 $0.50
Return on average stockholders' equity 13.5% 13.2%
Return on AEA 1.63% 1.71%
Efficiency ratio 40.1% 40.5%
Other
Net interest margin as a percentage of AEA 4.75% 4.78%
Salaries and general operating expenses as
a percentage of AMA(1) 1.73% 1.90%
Net credit losses as a percentage of average:
Finance receivables 0.42% 0.45%
Managed assets 0.44% 0.45%
Commercial finance receivables 0.22% 0.27%
Consumer finance receivables 1.17% 1.17%
Consumer managed assets 0.97% 0.90%
Average Balances (in millions)
Average Stockholders' Equity $ 2,733.4 $ 2,471.3
Average Finance Receivables $19,904.3 $17,709.3
Average Earning Assets $22,603.8 $19,083.3
Average Managed Assets $25,177.5 $21,393.1
At March 31, At December 31, At March 31,
1999 1998 1998
Credit Quality
60+ days contractual delinquency
as a percentage of finance
receivables
Commercial 1.36% 1.17% 1.27%
Consumer 3.57% 3.89% 3.28%
Total 1.82% 1.75% 1.68%
Total nonperforming assets as a
percentage of finance receivables(2) 1.41% 1.40% 1.35%
Reserve for credit losses as a
percentage of finance receivables 1.32% 1.33% 1.33%
Ratio of reserve for credit losses to
trailing twelve-month net
credit losses 3.34x 3.35x 2.52x
Capital and Leverage
Total debt to stockholders' equity
and Company-obligated mandatorily
redeemable preferred securities
of subsidiary trust holding solely
debentures of the Company 6.27x 6.32x 5.96x
Total debt to stockholders' equity(3) 6.93x 7.00x 6.66x
(1) "AMA" means the sum of average earning assets, which are net of credit
balances of factoring clients, and the average of consumer finance
receivables previously securitized and currently managed by the Company.
(2) Total nonperforming assets reflect both commercial and consumer finance
receivables on nonaccrual status and assets received in satisfaction of
loans.
(3) Total debt includes, and stockholders' equity excludes, $250.0 million of
Company-obligated mandatorily redeemable preferred securities of subsidiary
trust holding solely debentures of the Company.
<PAGE>
THE CIT GROUP, INC. AND SUBSIDIARIES
(Amounts in Millions)
MANAGED ASSETS BY SEGMENT & STRATEGIC BUSINESS UNIT
At March 31, At December 31, At March 31,
1999 1998 1998
Equipment Financing:
Finance receivables $ 8,456.4 $ 8,497.6 $ 7,559.6
Operating lease equipment, net 862.9 765.1 603.9
Total 9,319.3 9,262.7 8,163.5
Capital Finance:
Finance receivables 1,603.3 1,655.4 1,694.2
Operating lease equipment, net 2,289.5 1,982.0 1,421.4
3,892.8 3,637.4 3,115.6
Liquidating portfolio* 428.1 466.9 627.7
Total 4,320.9 4,104.3 3,743.3
Total Equipment
Financing & Leasing 13,640.2 13,367.0 11,906.8
Commercial Services 2,863.5 2,481.8 2,312.4
Business Credit 1,609.6 1,477.9 1,298.2
Credit Finance 993.3 1,036.5 903.8
Total Commercial Finance 5,466.4 4,996.2 4,514.4
Total Commercial Segments 19,106.6 18,363.2 16,421.2
Other - Equity Investments 84.6 81.9 63.3
Consumer Finance 2,342.8 2,244.4 2,284.9
Sales Financing 2,790.3 3,009.9 2,294.4
Total Consumer Segment 5,133.1 5,254.3 4,579.3
Total Financing and
Leasing Assets 24,324.3 23,699.4 21,063.8
Finance receivables previously
securitized:
Consumer Finance 554.9 607.6 419.6
Sales Financing 2,225.4 1,909.3 1,812.0
Total 2,780.3 2,516.9 2,231.6
Total Managed Assets -
Consumer Segment 7,913.4 7,771.2 6,810.9
Total Managed Assets $ 27,104.6 $ 26,216.3 $ 23,295.4
Sales Financing managed assets by product line:
Recreation vehicles $ 1,891.8 $ 1,884.6 $ 1,664.3
Manufactured housing 1,781.5 1,695.9 1,488.4
Recreational boat 1,077.6 1,038.6 799.8
Wholesale inventory financing 264.8 300.1 153.9
$ 5,015.7 $ 4,919.2 $ 4,106.4
* Consists primarily of oceangoing maritime and project finance.
FEES AND OTHER INCOME For the Quarter Ended
March 31,
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1999 1998
Factoring commissions $24.0 $23.0
Fees and other income 30.9 22.1
Gains on sales of
leasing equipment 9.2 14.8
Gains on securitizations 0.6 -
Gains on sales of venture
capital investments -_ 6.5
$64.7 $66.4
<PAGE>
Exhibit 99.2
[The CIT Group, Inc. Logo]
Jeffrey D. Simon
Senior Vice President
Investor Relations
(973)535-5911
FROM: THE CIT GROUP, INC.
1211 AVENUE OF THE AMERICAS
NEW YORK, NY 10036
FOR IMMEDIATE RELEASE
THE CIT GROUP, INC. DECLARES REGULAR QUARTERLY DIVIDEND;
ALSO NAMES NEW DIRECTORS TO BOARD, INCREASING ITS SIZE
NEW YORK, NY, April 27, 1999 --- The Board of Directors of
The CIT Group, Inc. (NYSE:CIT) today declared a regular quarterly cash dividend
of $.10 per common share for shareholders of record on May 12, 1999. The cash
dividend is payable on June 1, 1999.
The Company also announced that William M. O'Grady, 59, Executive Vice
President and Chief Administrative Officer of The CIT Group, Inc., has been
appointed to its Board. Mr. O'Grady's appointment expands the Board to 12
members. In addition, Keiji Torii, 51, General Manager of the Americas and the
New York Branch of The Dai-Ichi Kangyo Bank, Limited (DKB) has been named to the
Board to replace Yoshiro Aoki, 53, Managing Director, DKB and a Board member
since July 1997.
Mr. O'Grady joined CIT as Vice President - Human Resources in 1981. He
was named Executive Vice President in 1985 and is responsible for CIT's Human
Resources, Real Estate, Purchasing and Systems and Technology Departments.
Prior to joining CIT, he was Vice President of RCA Records and, earlier, held
other human resources and industrial relations positions with RCA.
Mr. Torii returns to the CIT Board on which he served from May 1993
through April 1997. He was a Director and Senior Executive Vice President of
CIT from 1996 to 1997. From 1993 to 1996, he served as a Director and Senior
Vice President of CIT. Prior to his current position, he was General Manager of
the DKB International Planning and Coordination Division.
The CIT Group, Inc. (http://www.citgroup.com) is one of the nation's
largest commercial and consumer financing companies. Founded in 1908, the
Company provides diversified financing products and services to a broad range of
customers through strategically focused business units.
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