Exhibit 99.1
[The CIT Group, Inc. Logo]
Contact:
James J. Egan, Jr.
Executive Vice President
Investor Relations
(973) 535-5911
FROM: THE CIT GROUP, INC.
1211 AVENUE OF THE AMERICAS
NEW YORK, NY 10036
FOR IMMEDIATE RELEASE
---------------------
o CIT REPORTS 61.2% RISE IN THIRD QUARTER NET INCOME
o PAST DUES DECLINE
o EFFICIENCY RATIO IMPROVES
NEW YORK, NEW YORK, October 26, 2000 --- The CIT Group, Inc. (Common
Stock: NYSE - CIT, TSE - CIT.U and Exchangeable Shares: TSE - CGX.U) today
announced record third quarter 2000 net income of $156.2 million, up 61.2% from
$96.9 million reported for the same period of 1999. Nine-month record earnings
totaled $451.5 million, up from $285.1 million in 1999. The third quarter 2000
net income performance reflects improved finance margin and continued expense
control, as well as consistent credit quality, in comparison to the second
quarter.
Earnings per diluted share for the third quarter were $0.60, unchanged
from the year ago quarter. Nine-month earnings per diluted share were $1.72,
compared to $1.76 for the same period of 1999. Before the amortization of
goodwill, third quarter 2000 earnings per diluted share were $0.67 compared to
$0.62 for the same period of 1999, and improved to $1.93 from $1.81 for the nine
months ended September 30, 2000 and 1999, respectively.
<PAGE>
"While recording the highest quarterly net income in our history, CIT also
continued our progress on integration goals, reduced credit delinquency rates,
and announced a major new vendor relationship with Agilent Technologies. We see
tremendous potential with our relationships with Avaya and Expanets, the
spin-offs of Lucent. We also extended the term of our joint venture agreement
with Dell," said Albert R. Gamper Jr., CIT Chairman, President and CEO. "We
continued to improve our operating efficiency ratio each quarter and have moved
up our returns in each successive quarter of the year 2000. We remain committed
to continue these improvements building upon our strong business franchises and
strengthening our already solid balance sheet."
Financial Highlights:
Total managed assets increased to $54.6 billion at September 30, 2000, up
2.4% from $53.4 billion at June 30, 2000 and up 6.2% from $51.4 billion at
year-end. Growth in equipment financing and seasonal growth in factoring were
somewhat offset by continued sales of non-strategic assets totaling over $300
million in the third quarter. Commercial managed assets increased to $47.3
billion at September 30, 2000 from $46.1 billion at June 30, 2000 and from $44.2
billion at December 31, 1999. Consumer managed assets were $7.3 billion at
September 30, 2000 up from $7.2 billion at June 30, 2000 and unchanged from
December 31, 1999. Total portfolio assets increased to $43.8 billion from $42.6
billion at June 30, 2000 and from $40.4 billion at year-end 1999. Third quarter
business volume, excluding factoring, was $6.1 billion, unchanged from the
second quarter of 2000, and an increase from $2.4 billion at September 30, 1999
due primarily to the Newcourt acquisition.
Net finance margin improved to $370.5 million in the third quarter from
$359.2 million for the second quarter of 2000 and $218.2 million in the third
quarter last year. Third quarter net
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<PAGE>
finance margin as a percentage of average earning assets was 3.61%, up from
3.53% for the second quarter of 2000 and down from 3.66% in the third quarter of
1999.
Non-spread revenue for the third quarter of 2000 was $224.2 million, down
from $232.3 million for the second quarter of 2000, compared to $81.9 million
for the third quarter of 1999. As a percent of average earning assets,
non-spread revenue was 2.18% for the third quarter of 2000 down from 2.28% in
the second quarter of 2000, but up from 1.38% last year. The increase from the
prior year reflects the broadened and more diversified revenue sources from 1999
acquisitions. The decrease from the second quarter reflects lower gains from
equipment sales, $19.6 million compared to $39.4 million, partially offset by
higher fees and other income, $126.8 million in the third quarter of 2000
compared to $121.1 million, and higher securitization gains, $26.9 million
(10.7% of pretax income) compared to $23.0 million last quarter.
Salaries and general operating expenses for the third quarter of 2000
totaled $250.2 million, $7.3 million lower than the second quarter of 2000 as we
continued to realize integration savings. The efficiency ratio improved to 42.4%
for the third quarter from 43.9% in the second quarter. Headcount was 7,300 at
quarter end, down 955 and 100 from year-end 1999 and June 30, 2000,
respectively.
The provision for credit losses was $65.8 million in the 2000 third
quarter, versus $64.0 million in the second quarter. Third quarter net
charge-offs were $61.9 million, 0.74% of average finance receivables, compared
to $60.7 million, 0.73%, in the second quarter. Commercial net charge-offs for
the third quarter were 0.67% compared to 0.64% for the second quarter, while
consumer net charge-offs were 1.21% for the third quarter compared to 1.34% for
the second quarter. At September 30, 2000, the reserve for credit losses was
$468.2 million, up from $460.3 million at June 30, 2000 and $446.9 million at
December 31, 1999. As a percentage
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<PAGE>
of finance receivables, the reserve for credit losses was 1.37% at September 30,
2000 compared to 1.39% at June 30, 2000, reflecting continuing changes in
portfolio mix and seasonal growth in factoring.
Total past dues, as a percentage of finance receivables, declined to 2.67%
at September 30, 2000 from 2.80% at June 30, 2000. Commercial past dues as a
percentage of finance receivables improved to 2.40% at September 30, 2000 from
2.59% at June 30, 2000 due to the improvements at the servicing centers that we
consolidated earlier in the year. Consumer past dues, as a percentage of finance
receivables, were 4.64% at September 30, 2000, up from 4.33% at June 30, 2000
reflecting seasonal trends. Total managed past dues, as a percentage of managed
financial assets, declined to 3.02% at September 30, 2000 from 3.11% at June 30,
2000.
CIT is hosting a conference call and simultaneous Webcast on October 27,
2000 at 11:00 a.m. to discuss its third quarter financial results. Both the call
and Webcast are open to the general public. The conference call is available at
the following numbers:
o United States: (888)303-1233
o International: (212)271-4602
Interested parties may also access the live call on the internet at:
www.cit.com. Please go to the web site at least 15 minutes before the broadcast
to register, download and install any necessary audio software. Following its
completion, a replay of the call can be accessed 90 minutes after the call on
the internet via www.cit.com or by calling in the U.S. (800)633-8284 or
internationally (858)812-6440 using the passcode 16547888 (available until
midnight, October 31, 2000).
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<PAGE>
Forward-Looking Statements:
Certain statements contained in this document are forward-looking
statements concerning our future earnings, financial condition and operations.
These statements involve risks and uncertainties that may be difficult to
predict. Forward-looking statements are based upon management's estimates of
future economic conditions, fair values and future costs, using currently
available information. Therefore, actual results may differ materially from
those expressed or implied in those statements, due to various risks and
uncertainties identified more fully in our 1999 Form 10-K.
About CIT:
CIT is a leading diversified finance company offering vendor, equipment,
commercial, factoring, consumer and structured financing capabilities. CIT
operates extensively in the United States and Canada with strategic locations in
Europe, Latin and South America, and the Pacific Rim. CIT has been in business
since 1908 and is recognized as a leader in many of the markets it serves. For
more information on CIT, visit the website at www.cit.com.
(SEE ATTACHED TABLES FOR ADDITIONAL FINANCIAL DATA).
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<PAGE>
THE CIT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(In Millions, except per share amounts)
<TABLE>
<CAPTION>
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
--------- --------- --------- ---------
(unaudited)
<S> <C> <C> <C> <C>
Finance income $ 1,326.6 $ 583.9 $ 3,857.2 $ 1,679.8
Interest expense 642.7 304.1 1,845.5 858.2
--------- --------- --------- ---------
Net finance income 683.9 279.8 2,011.7 821.6
Depreciation on operating lease equipment 313.4 61.6 932.9 176.9
--------- --------- --------- ---------
Net finance margin 370.5 218.2 1,078.8 644.7
Non spread revenue 224.2 81.9 694.7 221.4
--------- --------- --------- ---------
Operating revenue 594.7 300.1 1,773.5 866.1
--------- --------- --------- ---------
Salaries and general operating expenses 250.2 110.2 775.9 324.0
Provision for credit losses 65.8 32.2 191.4 77.9
Goodwill amortization 22.7 4.9 63.8 13.1
Minority interest in subsidiary trust holding
solely debentures of the company 4.8 4.8 14.4 14.4
--------- --------- --------- ---------
Operating expenses 343.5 152.1 1,045.5 429.4
--------- --------- --------- ---------
Income before provision for income taxes 251.2 148.0 728.0 436.7
Provision for income taxes 95.0 51.1 276.5 151.6
--------- --------- --------- ---------
Net income $ 156.2 $ 96.9 $ 451.5 $ 285.1
========= ========= ========= =========
Basic net income per share $ 0.60 $ 0.60 $ 1.73 $ 1.77
Weighted average shares outstanding 259.9 160.5 261.5 160.9
Diluted net income per share $ 0.60 $ 0.60 $ 1.72 $ 1.76
Weighted average shares outstanding 262.0 161.5 262.8 162.0
</TABLE>
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<PAGE>
THE CIT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
September 30, December 31,
2000 1999
------------- ------------
(unaudited)
Assets
------
Financing and leasing assets
Loans and leases
Commercial $29,943.8 $27,119.2
Consumer 4,168.1 3,887.9
--------- ---------
Finance receivables 34,111.9 31,007.1
Reserve for credit losses (468.2) (446.9)
--------- ---------
Net finance receivables 33,643.7 30,560.2
Operating lease equipment, net 6,785.6 6,125.9
Finance receivables held for sale 2,616.2 3,123.7
Cash and cash equivalents 819.4 1,073.4
Goodwill 1,987.1 1,850.5
Other assets 2,475.3 2,347.4
--------- ---------
Total assets $48,327.3 $45,081.1
========= =========
Liabilities and Stockholders' Equity
------------------------------------
Debt
Commercial paper $ 9,292.3 $ 8,974.0
Variable rate senior notes 9,549.0 7,147.2
Fixed rate senior notes 18,758.6 19,052.3
Subordinated fixed rate notes 200.0 200.0
--------- ---------
Total debt 37,799.9 35,373.5
Credit balances of factoring clients 2,485.7 2,200.6
Accrued liabilities and payables 1,447.3 1,191.8
Deferred federal income taxes 485.5 510.8
--------- ---------
Total liabilities 42,218.4 39,276.7
Company-obligated mandatorily redeemable
preferred securities of subsidiary
trust holding solely debentures
of the Company 250.0 250.0
Stockholders' equity
Common stock 2.7 2.7
Paid-in capital 3,526.4 3,521.8
Retained earnings 2,469.3 2,097.6
Accumulated other comprehensive
(loss) income (1.8) 2.8
Treasury stock at cost (137.7) (70.5)
--------- ---------
Total stockholders' equity 5,858.9 5,554.4
--------- ---------
Total liabilities and
stockholders' equity $48,327.3 $45,081.1
========= =========
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<PAGE>
THE CIT GROUP, INC. AND SUBSIDIARIES
(Amounts in Millions)
MANAGED ASSETS BY STRATEGIC BUSINESS UNIT
-----------------------------------------
<TABLE>
<CAPTION>
At September 30, At December 31, At September 30,
2000 1999 1999
---------------- --------------- ----------------
<S> <C> <C> <C>
Equipment Financing:
Finance receivables (1) $13,179.2 $10,899.3 $ 8,745.9
Operating lease equipment, net (1) 2,093.1 1,066.2 849.9
--------- --------- ---------
Total 15,272.3 11,965.5 9,595.8
--------- --------- ---------
Capital Finance:
Finance receivables 1,643.5 1,838.0 1,598.3
Operating lease equipment, net 3,447.3 2,931.8 2,807.0
Liquidating portfolio (2) 190.1 281.4 324.9
--------- --------- ---------
Total 5,280.9 5,051.2 4,730.2
--------- --------- ---------
Total Equipment Financing and Leasing Segment 20,553.2 17,016.7 14,326.0
--------- --------- ---------
Vendor Technology Finance:
Finance receivables (1) 6,436.0 7,488.9 --
Operating lease equipment, net (1) 1,209.5 2,108.8 --
--------- --------- ---------
Total Vendor Technology Finance Segment 7,645.5 9,597.7 --
--------- --------- ---------
Structured Finance:
Finance receivables 1,917.7 1,933.9 --
Operating lease equipment, net 35.7 -- --
Other - Equity Investments 274.4 137.3 115.8
--------- --------- ---------
Total Structured Finance Segment 2,227.8 2,071.2 115.8
--------- --------- ---------
Commercial Services 4,856.5 4,165.1 3,714.8
Business Credit 3,393.0 2,837.0 2,900.5
--------- --------- ---------
Total Commercial Finance Segment 8,249.5 7,002.1 6,615.3
--------- --------- ---------
Total Commercial Segments 38,676.0 35,687.7 21,057.1
--------- --------- ---------
Home equity 2,539.9 2,215.4 2,229.3
Manufactured housing 1,755.6 1,666.9 1,664.8
Recreational vehicles 547.6 361.2 486.8
Liquidating portfolio (2) 316.9 462.8 425.7
--------- --------- ---------
Total Consumer Segment 5,160.0 4,706.3 4,806.6
--------- --------- ---------
TOTAL FINANCING AND LEASING PORTFOLIO ASSETS 43,836.0 40,394.0 25,863.7
--------- --------- ---------
Finance receivables previously securitized:
Commercial 8,650.5 8,471.5 --
Consumer 1,662.5 1,987.0 2,106.9
Consumer liquidating portfolio (3) 480.1 580.8 643.1
--------- --------- ---------
Total 10,793.1 11,039.3 2,750.0
--------- --------- ---------
TOTAL MANAGED ASSETS $54,629.1 $51,433.3 $28,613.7
========= ========= =========
</TABLE>
(1) During the third quarter of 2000, we transferred approximately $1.7
billion of finance receivables and $1.0 billion of operating lease
equipment from Vendor Technology Finance to Equipment Financing.
(2) Consists primarily of ocean going maritime and project finance. Capital
Finance discontinued marketing to these sectors in 1997.
(3) In 1999, we decided to exit the recreational boat and wholesale loan
product lines.
<TABLE>
<CAPTION>
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
NON SPREAD REVENUE 2000 1999 2000 1999
------------------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
Fees and other income $126.8 $ 36.2 $369.3 $ 87.5
Factoring commissions 39.2 31.1 115.9 84.1
Gains on securitizations 26.9 -- 68.9 5.3
Gains on sales of leasing equipment 19.6 14.6 80.8 44.5
Gains on venture capital investments 11.7 -- 59.8 --
------ ------ ------ ------
$224.2 $ 81.9 $694.7 $221.4
====== ====== ====== ======
</TABLE>
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<PAGE>
THE CIT GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
For the Quarter For the Nine Months
Selected Data and Ratios Ended September 30, Ended September 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Profitability
Net income per diluted share $ 0.60 $ 0.60 $ 1.72 $ 1.76
Net income per diluted share, excluding goodwill amortization $ 0.67 $ 0.62 $ 1.93 $ 1.81
Book value per common share $ 22.37 $ 18.09
Return on average stockholders' equity 10.8% 13.5% 10.6% 13.6%
Return on average tangible stockholders' equity(1) 16.5% 15.3% 15.9% 15.1%
Return on AEA 1.52% 1.63% 1.50% 1.64%
Return on AMA(2) 1.22% 1.45% 1.18% 1.46%
Other
Net finance income as a percentage of AEA 6.66% 4.70% 6.66% 4.72%
Net finance margin as a percentage of AEA 3.61% 3.66% 3.57% 3.70%
Efficiency ratio(3) 42.4% 37.3% 44.1% 38.0%
Salaries and general operating expenses as a percentage of AMA(2)(3) 1.96% 1.65% 2.03% 1.66%
Net credit losses as a percentage of average:
Total finance receivables 0.74% 0.48% 0.71% 0.44%
Commercial finance receivables 0.67% 0.31% 0.62% 0.25%
Consumer finance receivables 1.21% 1.17% 1.34% 1.16%
Volume securitized $ 1,331.3 $ -- $ 2,925.0 $ 1,036.0
Gains on securitizations as a percentage of pretax income 10.7% -- 9.5% 1.2%
Average Balances
Average Stockholders' Equity $ 5,777.8 $ 2,875.6 $ 5,682.7 $ 2,804.6
Average Finance Receivables $ 33,650.0 $ 21,082.1 $ 32,877.0 $ 20,549.5
Average Earning Assets $ 41,060.9 $ 23,818.5 $ 40,267.4 $ 23,213.9
Average Managed Assets $ 51,181.2 $ 26,750.8 $ 50,986.8 $ 25,969.2
</TABLE>
<TABLE>
<CAPTION>
At September 30, At June 30, At December 31,
Credit Quality 2000 2000 1999
---- ---- ----
<S> <C> <C> <C>
60+ days contractual delinquency as a percentage of
finance receivables
Commercial 2.40% 2.59% 2.42%
Consumer 4.64% 4.33% 4.62%
Total 2.67% 2.80% 2.71%
60+ days managed financial asset contractual delinquency
as a percentage of managed financial assets(4)
Commercial 2.93% 3.09% 2.72%
Consumer 3.49% 3.21% 3.49%
Total 3.02% 3.11% 2.84%
Total non-performing assets as a percentage of finance 2.34% 2.36% 2.05%
receivables(5)
Total non-performing managed assets as a percentage of managed
financial assets(4) 2.63% 2.55% 2.23%
Reserve for credit losses as a percentage of finance receivables 1.37% 1.39% 1.44%
Capital and Leverage
Tangible stockholders' equity to managed assets(1)(6) 7.55% 7.47% 7.69%
Debt (net of overnight deposits) to tangible stockholders'
equity(7) 9.09x 9.27x 8.75x
</TABLE>
(1) Tangible stockholders' equity excludes goodwill.
(2) "AMA" or "Average Managed Assets", represents the sum of average earning
assets, which are net of credit balances of factoring clients, and the
average of commercial and consumer finance receivables previously
securitized and currently managed by the Company.
(3) Amortization of goodwill is excluded from these ratios.
(4) Managed financial assets exclude operating leases and Equity Investments.
(5) Total non-performing assets reflect both commercial and consumer finance
receivables on non-accrual status and assets received in satisfaction of
loans.
(6) Tangible stockholders' equity includes $250.0 million of Company-obligated
mandatorily redeemable preferred securities of subsidiary trust holding
solely debentures of the Company.
(7) Total debt excludes, and stockholders' equity includes $250.0 million of
Company-obligated mandatorily redeemable preferred securities of
subsidiary trust holding solely debentures of the Company.
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