EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CIT REPORTS THIRD QUARTER 2010 NET INCOME OF $131 MILLION, $0.66 PER DILUTED SHARE
FIRST AND SECOND QUARTER 2010 RESULTS REVISED UPWARD
- Portfolio optimization efforts advanced; $1.5 billion of assets sold
- Business activity increased; funded volume of $1.1 billion up 3% sequentially
- High-cost debt reduced; refinanced remaining first lien debt
- Capital ratios strong; Tier One Capital ratio exceeds 18%
- Book value grows to over $44 per share
NEW YORK– October 26, 2010 – CIT Group Inc. (NYSE: CIT), a leading provider of financing to small businesses and middle market companies, today reported net income for the quarter ended September 30, 2010 of $131.5 million, $0.66 per diluted share. CIT also announced that, after a review of fresh start accounting (“FSA”) balances and processes, it has revised its first and second quarter results higher. As a result, second quarter net income was revised from $142.1 million ($0.71 per diluted share) to $171.4 million ($0.85 per diluted share), while first quarter net income was revised from $97.3 million ($0.49 per diluted share) to $115.4 million ($0.58 per diluted share). Additional details on the revisions are provided in the “Prior Period Revisions” section and tables that follow. All comparisons to prior 2010 quarters are to the revised results.
“We continued to make steady progress advancing our key priorities in order to increase shareholder value,” said John A. Thain, Chairman and Chief Executive Officer. “Our balance sheet remains strong and capital ratios rose, as we paid down high-cost debt, further optimized our portfolio and improved our funding flexibility. Our increased business volume provided much needed credit to the small business and middle market companies that remain the backbone of the U.S. economy.”
Summary of Financial Results
Third quarter results reflect increased business activity as funded volume exceeded $1 billion, with increases in three of our four commercial businesses. In addition, credit metrics showed signs of stabilization, and we made continued progress optimizing the portfolio and reducing our funding costs. Net income decreased sequentially as lower interest expense, provision for credit losses and operating expenses were offset by a decline in interest income and fewer recoveries on assets charged-off prior to 2010. In aggregate, pre-tax benefits from FSA-related items of $266 million were down approximately $150 million from the second quarter, primarily due to lower asset levels, slower customer prepayments and the repayment of high cost debt.
2
Net finance revenue1(which includes operating lease rentals and depreciation) decreased $110 million from the second quarter as the revenue impact of a $2.7 billion contraction in average earning assets more than offset the interest savings from reducing high-cost debt. Net operating lease revenues were essentially flat. As a percentage of average earning assets, net finance revenue in the third quarter was 3.28%, down from 4.12% in the second quarter, and included a 2.62% benefit from FSA. Excluding FSA and the effect of prepayment penalties on high-cost debt in both quarters, margin was 0.92%, up 23 basis points from the second quarter, as the reduction in funding costs was partially offset by the lower asset yields that resulted from a change in the composition of interest-earning assets and lower yield-related fees.
Other income (excluding operating lease rentals) decreased from the second quarter primarily due to lower recoveries on receivables charged-off prior to the adoption of FSA. Results also reflect slightly higher factoring commissions on seasonal volume build.
Operating expenses decreased from the second quarter reflecting lower employee retention plan and benefit costs. Headcount declined 5% from June 30, 2010 to approximately 3,800. We recorded $6 million of restructuring charges in the third quarter for facility consolidation and severance costs. Improving operating efficiencies and lowering expense levels remains a priority.
The 31% year-to-date effective tax rate results from taxes on international operations and valuation allowances recorded against U.S. losses.
Total assets at September 30, 2010 were $53.0 billion, down $2.0 billion from June 30, 2010, reflecting the sale of $1.5 billion of non-core assets and portfolio run-off in excess of new business activity. Significant asset sales during the quarter included a $0.6 billion liquidating consumer portfolio in Vendor Finance, $0.6 billion of Corporate Finance loans, $0.2 billion of other Vendor assets and approximately $100 million of Transportation equipment. Assets held for sale at September 30, 2010 include essentially the entire private student loan portfolio, some government guaranteed student loans and certain energy-related Corporate Finance assets.
Preliminary Tier 1 and Total Capital ratios improved to 18.7% and 19.6%, respectively, up from 17.5% and 18.2% at June 30, 2010, benefiting from both growth in common equity and a decline in risk-weighted assets. Book value per share at September 30, 2010 was $44.09.
1Net finance revenue is a non-GAAP measure, see page 18 for reconciliation of non-GAAP to GAAP financial information.
3
Credit
Credit trends showed signs of stabilization, as the amount of net charge-offs and non-accrual loans each decreased modestly from the second quarter. Though down in amount, the corresponding ratios as a percentage of finance receivables increased from the prior quarter due to continued portfolio contraction. The reduction in non-accrual loans was driven largely by improvement in Corporate Finance, which was partially offset by an increase in Trade Finance. These credit metrics, which are after the application of FSA, include asset marks and other FSA-related items. Reported net charge-offs of $101 million for the third quarter, down from $106 million in the second quarter, do not reflect recoveries of pre-FSA charge-offs recorded in other income, which were $52 million in the third quarter and $113 million in the second quarter.
Management also evaluates credit performance using credit metrics that exclude the impact of FSA. On this basis, gross charge-offs were $233 million, down $19 million from the second quarter, while non-accrual loans of $2.6 billion decreased $447 million from the second quarter, including a decline of $195 million due to student loans that were reclassified as held for sale. New inflows into non-accrual loans decreased significantly on a pre-FSA basis from the preceding two quarters.
The reserve for credit losses increased to $397 million from $328 million at June 30, 2010 reflecting increases to specific reserves on impaired loans and non-specific reserves. Although credit metrics showed signs of stabilizing in the third quarter, we built reserves for incremental deterioration beyond the FSA discount on pre-emergence loans. The provision for credit losses decreased from the second quarter, as the build in non-specific reserves was partially offset by the reversal of reserves related to the liquidating Vendor Finance consumer portfolio that was sold.
Segment Highlights
Corporate Finance
Corporate Finance new business activity continued to improve with increases in both committed and funded loan volume. Funded loan volume increased 29% from the second quarter, which reflected a more than doubling of volume underwritten at CIT Bank. We were awarded agency roles and we continue to build our pipeline for new deals. Earnings declined sequentially, primarily due to lower FSA accretion benefits on slower portfolio prepayments, reduced gains on asset sales and fewer recoveries on loans charged-off prior to the adoption of FSA. Credit metrics improved; non-accrual loans and net charge-offs each declined on both a pre-FSA and reported basis. Operating expenses also improved from the prior quarter as headcount declined 6%. Assets declined by $711 million from June 30, 2010 as new volume was more than offset by asset sales and collections.
4
Transportation Finance
Transportation Finance continued to perform well, as our commercial air fleet remains effectively fully utilized and our rail fleet utilization improved to 94%. Earnings rose slightly from the second quarter, as the benefits of higher gains on asset sales and lower operating and tax expenses were largely offset by a higher provision for credit losses and the impact of FSA that dampened net operating lease rental income. Non-accrual loans rose, primarily due to the addition of one secured loan to a commercial airline, and there were no charge-offs during the quarter. We took delivery of and placed six new aircraft in the third quarter and have lease commitments for all aircraft to be delivered over the next 12 months.
Trade Finance
Trade Finance results reflected the benefit of the financing conduit that was established at the end of the second quarter and higher commissions. Third quarter factored volume increased to $7 billion, from $6.3 billion in the second quarter, reflecting normal seasonal trends. Factoring commissions improved modestly, as the increased volume was slightly offset by a modest reduction in rates charged. The sequential comparison is also impacted by a lower level of recoveries on accounts charged-off prior to the adoption of FSA. While net charge-offs declined and remain at modest levels, non-accrual loans increased to $199 million.
Vendor Finance
Vendor Finance earnings improved, reflecting the benefits of asset sales as well as lower credit and operating costs. Portfolio yields remained consistent and volume increased despite the impact of the sale of the Australia and New Zealand business at the end of the second quarter. We funded $542 million of new business volume in the quarter with increases across many programs and regions, including sequential growth in 7 of our top 10 vendor programs. We also extended our Lenovo Financial Services program to Western Europe. Total financing and leasing assets declined by approximately $1 billion, reflecting asset sales and collection activity. During the quarter we sold over $800 million of assets, including the liquidating consumer portfolio, the sale of which reduced credit loss reserve needs and lowered the current quarter provision for credit losses. Delinquencies and non-accrual loans each declined on both a reported and pre-FSA basis. Net charge-offs increased from the second quarter, and recoveries on assets charged-off prior to the adoption of FSA declined.
Consumer Finance
Consumer Finance results were negatively impacted by the transfer to assets held for sale of our private student loan portfolio and a pool of government-guaranteed loans, sales of which are anticipated to close during the fourth quarter. This transfer of $400 million of loans ($895 million pre-FSA) resulted in a $195 million decline of the pre-FSA non-accrual loans and a corresponding reduction in FSA discount of $486 million. We continue to manage the remaining $8.4 billion liquidating portfolio of government-
5
guaranteed student loans. Margin was negatively impacted during the quarter due to timing differences on the reset of asset yields and debt costs. Operating expenses declined from the prior quarter as we continue to focus on improving the efficiency of servicing this portfolio.
CIT Bank
CIT Bank continues to actively originate new loans. Committed loan volume increased to $314 million from $180 million in the second quarter, of which $226 million was funded. At September 30, 2010, total assets were $7.4 billion and total deposits were $4.8 billion. During the quarter, $279 million of student loan funding facilities were repaid. The preliminary Total Capital ratio at the Bank was 57.4% and the Tier 1 Leverage ratio was 22.1%.
Liquidity and Financing
Total cash rose to $11.2 billion at September 30, 2010, consisting of $6.5 billion at the bank holding company (BHC), $1.6 billion at CIT Bank, $1.5 billion at operating subsidiaries and $1.6 billion in other restricted cash.
Proceeds from asset sales and net portfolio collections enabled the paydown of over $2.5 billion of debt during the quarter, including $1.5 billion of high-cost first lien debt. We repaid a total of $4.5 billion of first lien debt in 2010 and refinanced the remaining $3 billion at a lower cost with more flexible terms and with a later maturity date. In late September and early October, we announced the redemption of $1.4 billion of the 10.25% Series B Second Lien Notes that mature from 2013 through 2016, which will be completed in the fourth quarter using cash at the BHC.
6
Prior Period Revisions
In preparing the financial statements for the quarter ended September 30, 2010, the Company discovered and corrected immaterial errors that impacted the 2010 first and second quarter results and had a de minimis impact on the post-emergence December 31, 2009 balance sheet. As a result, pre-tax income was increased by $34.3 million and $22.5 million for the quarters ended June 30 and March 31, 2010 respectively, and goodwill was increased by $3.7 million at December 31, 2009. While the adjustments were primarily related to the complexities of FSA and the accounting for the related activity, some other errors were identified as well. While these errors did not, individually or in the aggregate, result in a material misstatement of the Company's December 31, 2009 balance sheet or the consolidated financial statements for the first or second quarters, correcting these items in the third quarter would have been material to the third quarter results. Accordingly, management has revised in this release and will revise in subsequent quarterly filings on Form 10-Q and its 2010 Form 10-K, its previously reported December 31, 2009 balance sheet and March 31, 2010 and June 30, 2010 financial statements.
Tables reflecting the previously reported balances, required adjustments and revised amounts impacting the income statements and balance sheets, along with descriptions of significant adjustments are included in the accompanying financial tables.
See attached tables for financial statements and supplemental financial information.
7
Conference Call and Web cast
Chairman and Chief Executive Officer John A. Thain and Chief Financial Officer Scott T. Parker will discuss these results on a conference call and audio Web cast today, October 26, 2010, at 8:00 a.m. (EDT). Interested parties may access the conference call live by dialing 866-831-6272 for U.S. and Canadian callers or 617-213-8859 for international callers and reference access code “CIT Group” or access the audio web cast at the following website: http://ir.cit.com. An audio replay of the call will be available until 11:59 p.m. (EDT) November 9, 2010, by dialing 888-286-8010 for U.S. and Canadian callers or 617-801-6888 for international callers with the access code 10162673, or at the following website: http://ir.cit.com.
About CIT
Founded in 1908, CIT (NYSE: CIT) is a bank holding company with more than $35 billion in finance and leasing assets. It provides financing and leasing capital to its more than one million small business and middle market clients and their customers across more than 30 industries. CIT maintains leadership positions in small business and middle market lending, factoring, retail finance, aerospace, equipment and rail leasing, and global vendor finance.www.cit.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of applicable federal securities laws that are based upon our current expectations and assumptions concerning future events, which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. The words “expect,” “anticipate,” “estimate,” “forecast,” “initiative,” “objective,” “plan,” “goal,” “project,” “outlook,” “priorities,” “target,” “intend,” “evaluate,” “pursue,” “commence,” “seek,” “may,” “would,” “could,” “should,” “believe,” “potential,” “continue,” or the negative of any of those words or similar expressions is intended to identify forward-looking statements. All statements contained in this press release, other than statements of historical fact, including without limitation, statements about our plans, strategies, prospects and expectations regarding future events and our financial performance, are forward-looking statements that involve certain risks and uncertainties. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results, and our actual results may differ materially. Important factors that could cause our actual results to be materially different from our expectations include, among others, the risk that CIT is unsuccessful in refining and implementing its strategy and business plan, the risk that CIT's changes in its senior management team affects CIT's ability to react to and address key business and regulatory issues, the risk that CIT is delayed in transitioning certain business platforms to CIT Bank and may not succeed in developing a stable, long-term source of funding, and the risk that CIT continues to be subject to liquidity constraints and higher funding costs. We describe these and other risks that could affect our actual results in Item 1A, “Risk Factors”, of our latest Annual Report on Form 10-K filed with the Securities and Exchange Commission. Accordingly, you should not place undue reliance on the forward-looking statements contained in this press release. These forward-looking statements speak only as of the date on which the statements were made. CIT undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except where expressly required by law.
Non GAAP Measurements
Net finance revenue is a non-GAAP measurement used by management to gauge portfolio performance. ‘Pre FSA’ is non-GAAP and provides the user with additional data that is more comparable to historical and peer disclosures.
###
| CIT MEDIA RELATIONS: | CIT INVESTOR RELATIONS: |
| C. Curtis Ritter | Ken Brause |
| Vice President - Director of External | Executive Vice President |
| Communications & Media Relations | |
| (212) 461-7711 | (212) 771-9650 |
| Curt.Ritter@cit.com | Ken.Brause@cit.com |
8
CIT GROUP INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED INCOME STATEMENT
(dollars in millions, except per share data)
| Quarters Ended | Nine Months Ended September 30, 2010 | ||||||||
| Interest income | September 30, 2010 | June 30, 2010 | |||||||
| Revised | |||||||||
| Interest and fees on loans | $ | 809.5 | $ | 993.6 | $ | 2,884.7 | |||
| Interest and dividends on investments | 6.2 | 6.3 | 18.0 | ||||||
| Total interest income | 815.7 | 999.9 | 2,902.7 | ||||||
| Interest expense | |||||||||
| Interest on long-term borrowings | (706.9 | ) | (786.0 | ) | (2,300.2 | ) | |||
| Interest on deposits | (25.3 | ) | (25.3 | ) | (77.5 | ) | |||
| Total interest expense | (732.2 | ) | (811.3 | ) | (2,377.7 | ) | |||
| Net interest revenue | 83.5 | 188.6 | 525.0 | ||||||
| Provision for credit losses | (165.2 | ) | (244.3 | ) | (636.0 | ) | |||
| Net interest revenue, after credit provision | (81.7 | ) | (55.7 | ) | (111.0 | ) | |||
| Other income | |||||||||
| Rental income on operating leases | 398.4 | 419.7 | 1,236.3 | ||||||
| Other | 269.4 | 339.5 | 760.3 | ||||||
| Total other income | 667.8 | 759.2 | 1,996.6 | ||||||
| Other expenses | |||||||||
| Depreciation on operating lease equipment | (161.7 | ) | (178.5 | ) | (512.9 | ) | |||
| Operating expenses | (228.8 | ) | (277.2 | ) | (767.2 | ) | |||
| Total other expenses | (390.5 | ) | (455.7 | ) | (1,280.1 | ) | |||
| Income before provision for income taxes | 195.6 | 247.8 | 605.5 | ||||||
| Provision for income taxes | (64.2 | ) | (76.1 | ) | (187.2 | ) | |||
| Net income before attribution of noncontrolling interests | 131.4 | 171.7 | 418.3 | ||||||
| Net (income) loss attributable to noncontrolling interests, after tax | 0.1 | (0.3 | ) | - | |||||
| Net income | $ | 131.5 | $ | 171.4 | $ | 418.3 | |||
| Basic earnings per common share | $ | 0.66 | $ | 0.86 | $ | 2.09 | |||
| Diluted earnings per common share | $ | 0.66 | $ | 0.85 | $ | 2.09 | |||
| Average number of common shares - basic (thousands) | 200,323 | 200,075 | 200,147 | ||||||
| Average number of common shares - diluted (thousands) | 200,668 | 200,644 | 200,464 | ||||||
9
CIT GROUP INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(dollars in millions, except per share data)
| At September 30, 2010 | At June 30, 2010 | At December 31, 2009 | ||||||
| Revised | Revised | |||||||
| Assets | ||||||||
| Total cash and deposits | $ | 11,178.0 | $ | 10,666.4 | $ | 9,825.9 | ||
| Trading assets at fair value - derivatives | 45.2 | 216.1 | 44.1 | |||||
| Assets held for sale | 887.7 | 572.5 | 343.8 | |||||
| Loans | 26,765.4 | 28,941.5 | 34,891.1 | |||||
| Allowance for loan losses | (397.1 | ) | (327.8 | ) | - | |||
| Total loans, net of allowance for loan losses | 26,368.3 | 28,613.7 | 34,891.1 | |||||
| Operating lease equipment, net | 10,964.5 | 10,952.1 | 10,910.0 | |||||
| Goodwill and intangible assets, net | 379.4 | 411.6 | 468.2 | |||||
| Unsecured counterparty receivable | 682.5 | 818.7 | 1,094.5 | |||||
| Other assets | 2,476.4 | 2,714.0 | 2,451.5 | |||||
| Total assets | $ | 52,982.0 | $ | 54,965.1 | $ | 60,029.1 | ||
| Liabilities | ||||||||
| Deposits | $ | 4,788.6 | $ | 4,708.9 | $ | 5,218.6 | ||
| Trading liabilities at fair value - derivatives | 123.0 | 46.9 | 41.9 | |||||
| Credit balances of factoring clients | 959.2 | 877.3 | 892.9 | |||||
| Other liabilities | 2,339.7 | 2,374.2 | 2,211.3 | |||||
| Long-term borrowings | ||||||||
| Secured borrowings | 11,535.1 | 12,403.1 | 14,346.5 | |||||
| Secured credit facility and expansion facility | 3,044.2 | 4,596.9 | 7,716.6 | |||||
| Series A notes | 18,959.1 | 18,882.2 | 18,733.6 | |||||
| Series B notes | 2,192.9 | 2,194.7 | 2,198.2 | |||||
| Senior unsecured notes | 209.4 | 199.6 | 268.1 | |||||
| Total long-term borrowings | 35,940.7 | 38,276.5 | 43,263.0 | |||||
| Total liabilities | 44,151.2 | 46,283.8 | 51,627.7 | |||||
| Equity | ||||||||
| Stockholders’ equity | ||||||||
| Common stock | 2.0 | 2.0 | 2.0 | |||||
| Paid-in capital | 8,426.6 | 8,419.1 | 8,398.0 | |||||
| Accumulated earnings | 403.9 | 272.4 | - | |||||
| Accumulated other comprehensive (loss) income | 1.1 | (9.7 | ) | - | ||||
| Treasury stock, at cost | (4.0 | ) | (4.0 | ) | - | |||
| Total common stockholders’ equity | 8,829.6 | 8,679.8 | 8,400.0 | |||||
| Noncontrolling interests | 1.2 | 1.5 | 1.4 | |||||
| Total equity | 8,830.8 | 8,681.3 | 8,401.4 | |||||
| Total liabilities and equity | $ | 52,982.0 | $ | 54,965.1 | $ | 60,029.1 | ||
| Book Value Per Common Share | ||||||||
| Book value per common share | $ | 44.09 | $ | 43.34 | $ | 41.99 | ||
| Tangible book value per common share | $ | 42.20 | $ | 41.29 | $ | 39.65 | ||
10
CIT GROUP INC. AND SUBSIDIARIES
SELECT BALANCES
(dollars in millions)
| INCOME STATEMENT ITEMS | Quarters Ended | |||||||||||
| September 30, 2010 | June 30, 2010(1) | March, 2010(1) | Nine Months Ended September 30, 2010 | |||||||||
| Other Income (Non-spread revenue) | ||||||||||||
| Fees, commissions and other revenue | $ | 41.0 | $ | 34.6 | $ | 43.6 | $ | 119.2 | ||||
| Factoring commissions | 37.3 | 34.9 | 36.2 | 108.4 | ||||||||
| Gains on sales of leasing equipment | 44.1 | 54.2 | 27.9 | 126.2 | ||||||||
| Gains on loan and portfolio sales | 85.0 | 75.1 | 37.0 | 197.1 | ||||||||
| (Loss) gain on non-qualifying hedge derivatives and foreign | ||||||||||||
| currency exchange | (9.8 | ) | 3.7 | (73.1 | ) | (79.2 | ) | |||||
| Recoveries of pre-FSA charge-offs | 51.8 | 113.1 | 44.0 | 208.9 | ||||||||
| Counterparty receivable accretion | 20.0 | 23.9 | 35.8 | 79.7 | ||||||||
| Total other income | $ | 269.4 | $ | 339.5 | $ | 151.4 | $ | 760.3 | ||||
| Operating Expenses | ||||||||||||
| Salaries and general operating expenses: | ||||||||||||
| Compensation and benefits | $ | 137.6 | $ | 179.3 | $ | 140.1 | $ | 457.0 | ||||
| Professional fees | 23.1 | 25.6 | 29.7 | 78.4 | ||||||||
| Technology | 19.6 | 18.2 | 19.2 | 57.0 | ||||||||
| Occupancy expense | 11.9 | 11.3 | 14.9 | 38.1 | ||||||||
| Provision for severance and facilities exiting activities | 6.2 | 2.6 | 11.9 | 20.7 | ||||||||
| Other expenses | 30.4 | 40.2 | 45.4 | 116.0 | ||||||||
| Total operating expenses | $ | 228.8 | $ | 277.2 | $ | 261.2 | $ | 767.2 | ||||
| Fresh Start Accounting: | ||||||||||||
| Accretion / (Amortization) | ||||||||||||
| Interest income | $ | 331.6 | $ | 424.2 | $ | 489.7 | $ | 1,245.5 | ||||
| Interest expense | (122.5 | ) | (80.1 | ) | (100.7 | ) | (303.3 | ) | ||||
| Rental income on operating leases | (29.7 | ) | (24.8 | ) | (33.8 | ) | (88.3 | ) | ||||
| Other income | 20.0 | 23.9 | 35.8 | 79.7 | ||||||||
| Depreciation expense | 66.5 | 70.6 | 68.5 | 205.6 | ||||||||
| Total | $ | 265.9 | $ | 413.8 | $ | 459.5 | $ | 1,139.2 | ||||
| BALANCE SHEET ITEMS | ||||||||||||
| Fresh Start Accounting: | Accretable | Non-accretable | Accretable | Non-accretable | ||||||||
| (Discount) / Premium | ||||||||||||
| At September 30, 2010 | At June 30, 2010(1) | |||||||||||
| Loans | $ | (1,927.3 | ) | $ | (583.3 | ) | $ | (2,340.4 | ) | $ | (1,178.9 | ) |
| Operating lease equipment, net | (3,055.1 | ) | - | (3,107.9 | ) | - | ||||||
| Goodwill and Intangible assets | 136.3 | 243.1 | 168.5 | 243.1 | ||||||||
| Other assets | (241.2 | ) | - | (261.2 | ) | - | ||||||
| Total assets | $ | (5,087.3 | ) | $ | (340.2 | ) | $ | (5,541.0 | ) | $ | (935.8 | ) |
| Deposits | $ | 103.1 | $ | - | $ | 112.3 | $ | - | ||||
| Long-term borrowings | (3,063.8 | ) | - | (3,195.0 | ) | - | ||||||
| Other liabilities | - | 220.4 | - | 285.4 | ||||||||
| Total liabilities | $ | (2,960.7 | ) | $ | 220.4 | $ | (3,082.7 | ) | $ | 285.4 | ||
| At March 31, 2010(1) | At December 31, 2009(1) | |||||||||||
| Loans | $ | (3,077.8 | ) | $ | (1,490.1 | ) | $ | (3,556.5 | ) | $ | (1,683.7 | ) |
| Operating lease equipment, net | (3,152.7 | ) | - | (3,239.7 | ) | - | ||||||
| Goodwill and Intangible assets | 201.5 | 243.1 | 225.1 | 243.1 | ||||||||
| Other assets | (285.2 | ) | - | (321.0 | ) | - | ||||||
| Total assets | $ | (6,314.2 | ) | $ | (1,247.0 | ) | $ | (6,892.1 | ) | $ | (1,440.6 | ) |
| Deposits | $ | 121.6 | $ | - | $ | 131.4 | $ | - | ||||
| Long-term borrowings | (3,284.9 | ) | - | (3,394.4 | ) | - | ||||||
| Other liabilities | - | 306.7 | - | 336.6 | ||||||||
| Total liabilities | $ | (3,163.3 | ) | $ | 306.7 | $ | (3,263.0 | ) | $ | 336.6 | ||
| (1) Certain balances have been revised from previously reported amounts. | ||||||||||||
11
CIT GROUP INC. AND SUBSIDIARIES
(dollars in millions)
FINANCING AND LEASING ASSETS
| September 30, 2010 | June 30, 2010(1) | March 31, 2010(1) | December 31, 2009(1) | ||||||||
| Corporate Finance | |||||||||||
| Finance receivables | $ | 9,252.2 | $ | 9,880.4 | $ | 11,719.0 | $ | 12,174.9 | |||
| Operating lease equipment, net | 98.2 | 105.6 | 135.7 | 137.3 | |||||||
| Assets held for sale | 439.3 | 514.8 | 287.8 | 292.6 | |||||||
| Financing and leasing assets | 9,789.7 | 10,500.8 | 12,142.5 | 12,604.8 | |||||||
| Transportation Finance | |||||||||||
| Finance receivables | 1,607.0 | 1,672.7 | 1,818.6 | 1,853.7 | |||||||
| Operating lease equipment, net | 10,324.5 | 10,296.9 | 10,177.5 | 10,089.2 | |||||||
| Assets held for sale | 28.1 | 10.4 | 11.6 | 17.2 | |||||||
| Financing and leasing assets | 11,959.6 | 11,980.0 | 12,007.7 | 11,960.1 | |||||||
| Trade Finance | |||||||||||
| Finance receivables | 2,605.5 | 2,514.6 | 2,794.1 | 2,991.0 | |||||||
| Vendor Finance | |||||||||||
| Finance receivables | 5,094.3 | 6,085.8 | 6,792.3 | 8,187.8 | |||||||
| Operating lease equipment, net | 541.8 | 549.6 | 618.6 | 683.5 | |||||||
| Assets held for sale | - | 18.8 | 479.8 | - | |||||||
| Financing and leasing assets | 5,636.1 | 6,654.2 | 7,890.7 | 8,871.3 | |||||||
| Consumer | |||||||||||
| Finance receivables - student lending | 8,154.6 | 8,721.9 | 8,863.6 | 9,584.2 | |||||||
| Finance receivables - other | 51.8 | 66.1 | 81.2 | 99.5 | |||||||
| Assets held for sale | 420.3 | 28.5 | 589.6 | 34.0 | |||||||
| Financing and leasing assets | 8,626.7 | 8,816.5 | 9,534.4 | 9,717.7 | |||||||
| Total financing and leasing assets | $ | 38,617.6 | $ | 40,466.1 | $ | 44,369.4 | $ | 46,144.9 | |||
| OTHER ASSETS | September 30, 2010 | June 30, 2010(1) | March 31, 2010(1) | December 31, 2009(1) | |||||||
| Deposits on commercial aerospace equipment | $ | 582.5 | $ | 619.8 | $ | 647.7 | $ | 635.9 | |||
| Equity and debt investments | 349.9 | 344.7 | 338.4 | 373.6 | |||||||
| Accrued interest and dividend receivables | 139.5 | 170.4 | 205.0 | 214.7 | |||||||
| Prepaid expenses | 86.0 | 90.7 | 78.0 | 81.2 | |||||||
| Furniture and fixtures | 90.3 | 91.8 | 93.8 | 102.8 | |||||||
| Retained interests in securitizations | - | - | - | 139.7 | |||||||
| Miscellaneous receivables and other assets | 1,228.2 | 1,396.6 | 1,059.4 | 903.6 | |||||||
| Total other assets | $ | 2,476.4 | $ | 2,714.0 | $ | 2,422.3 | $ | 2,451.5 | |||
AVERAGE BALANCES AND RATES
| Quarter Ended September 30, 2010 | Quarter Ended June 30, 2010(1) | Quarter Ended March 31, 2010(1) | ||||||||||
| Average Balance | Average Balance | Average Balance | ||||||||||
| Assets | Rate | Rate | Rate | |||||||||
| Deposits with banks | $ | 10,400.8 | 0.2 | % | $ | 9,814.5 | 0.2 | % | $ | 9,498.6 | 0.2 | % |
| Investments | 349.0 | 0.8 | % | 348.5 | 2.0 | % | 348.3 | 2.0 | % | |||
| Loans (including held for sale assets) | 28,826.8 | 11.6 | % | 31,504.0 | 13.0 | % | 34,552.8 | 12.8 | % | |||
| Total interest earning assets / interest income | 39,576.6 | 8.4 | % | 41,667.0 | 9.8 | % | 44,399.7 | 10.0 | % | |||
| Operating lease equipment, net | 10,975.8 | 8.6 | % | 10,973.5 | 8.8 | % | 10,945.2 | 9.0 | % | |||
| Other | 3,325.8 | 3,536.2 | 3,862.4 | |||||||||
| Total average assets | $ | 53,878.2 | $ | 56,176.7 | $ | 59,207.3 | ||||||
| Liabilities | ||||||||||||
| Deposits | $ | 4,769.8 | 2.1 | % | $ | 4,753.7 | 2.1 | % | $ | 5,049.2 | 2.1 | % |
| Long-term borrowings | 36,849.2 | 7.7 | % | 39,476.6 | 8.0 | % | 42,461.0 | 7.6 | % | |||
| Total interest-bearing liabilities | 41,619.0 | 7.0 | % | 44,230.3 | 7.3 | % | 47,510.2 | 7.0 | % | |||
| Credit balances of factoring clients | 949.3 | 867.7 | 866.8 | |||||||||
| Other | 11,309.9 | 11,078.7 | 10,830.3 | |||||||||
| Total average liabilities and equity | $ | 53,878.2 | $ | 56,176.7 | $ | 59,207.3 | ||||||
(1) Certain balances have been revised from previously reported amounts.
12
CIT GROUP INC. AND SUBSIDIARIES
(dollars in millions)
CREDIT METRICS - AFTER FRESH START ACCOUNTING
| Gross Charge-offs To Average Finance Receivables | Quarter Ended September 30, 2010 | Quarter Ended June 30, 2010(1) | Quarter Ended March 31, 2010(1) | Nine Months Ended September 30, 2010 | ||||||||||||
| Corporate Finance | $ | 40.6 | 1.66 | % | $ | 53.2 | 1.88 | % | $ | 60.4 | 1.99 | % | $ | 154.2 | 1.86 | % |
| Transportation Finance | - | - | - | - | - | - | - | - | ||||||||
| Trade Finance | 7.8 | 1.18 | % | 12.5 | 1.90 | % | 2.7 | 0.38 | % | 23.0 | 1.13 | % | ||||
| Vendor Finance | 55.0 | 3.75 | % | 38.2 | 2.38 | % | 10.3 | 0.53 | % | 103.5 | 2.05 | % | ||||
| Commercial Segments | 103.4 | 2.08 | % | 103.9 | 1.88 | % | 73.4 | 1.19 | % | 280.7 | 1.68 | % | ||||
| Consumer | 8.0 | 0.37 | % | 9.4 | 0.42 | % | 4.5 | 0.19 | % | 21.9 | 0.32 | % | ||||
| Total | $ | 111.4 | 1.56 | % | $ | 113.3 | 1.46 | % | $ | 77.9 | 0.91 | % | $ | 302.6 | 1.29 | % |
| Net Charge-offs To Average Finance Receivables* | ||||||||||||||||
| Corporate Finance | $ | 40.0 | 1.64 | % | $ | 51.9 | 1.84 | % | $ | 59.1 | 1.94 | % | $ | 151.0 | 1.82 | % |
| Transportation Finance | - | - | - | - | - | - | - | - | ||||||||
| Trade Finance | 7.3 | 1.10 | % | 12.4 | 1.89 | % | 2.7 | 0.38 | % | 22.4 | 1.10 | % | ||||
| Vendor Finance | 45.8 | 3.13 | % | 32.7 | 2.04 | % | 9.5 | 0.49 | % | 88.0 | 1.74 | % | ||||
| Commercial Segments | 93.1 | 1.87 | % | 97.0 | 1.76 | % | 71.3 | 1.16 | % | 261.4 | 1.57 | % | ||||
| Consumer | 7.5 | 0.35 | % | 9.3 | 0.42 | % | 4.5 | 0.19 | % | 21.3 | 0.32 | % | ||||
| Total | $ | 100.6 | 1.41 | % | $ | 106.3 | 1.37 | % | $ | 75.8 | 0.89 | % | $ | 282.7 | 1.21 | % |
| Non-accruing Loans To Finance Receivables | September 30, 2010 | June 30, 2010(1) | March 31, 2010(1) | December 31, 2009 | ||||||||||||
| Corporate Finance | $ | 1,516.0 | 16.39 | % | $ | 1,644.7 | 16.65 | % | $ | 1,468.1 | 12.53 | % | $ | 1,374.8 | 11.29 | % |
| Transportation Finance | 182.7 | 11.37 | % | 160.5 | 9.60 | % | 172.8 | 9.50 | % | 6.8 | 0.37 | % | ||||
| Trade Finance | 198.7 | 7.63 | % | 96.0 | 3.82 | % | 90.5 | 3.24 | % | 90.5 | 3.03 | % | ||||
| Vendor Finance | 126.7 | 2.49 | % | 149.2 | 2.45 | % | 179.4 | 2.64 | % | 102.2 | 1.25 | % | ||||
| Commercial Segments | 2,024.1 | 10.91 | % | 2,050.4 | 10.17 | % | 1,910.8 | 8.26 | % | 1,574.3 | 6.25 | % | ||||
| Consumer | 1.2 | 0.01 | % | 1.5 | 0.02 | % | 0.7 | 0.01 | % | 0.1 | - | |||||
| Total | $ | 2,025.3 | 7.57 | % | $ | 2,051.9 | 7.09 | % | $ | 1,911.5 | 5.96 | % | $ | 1,574.4 | 4.51 | % |
* Net charge-offs do not include recoveries of $51.8 million, $113.1 million and $44.0 million recorded in Other Income for the quarters ended September 30, June 30, and March 31, 2010.
CREDIT METRICS - BEFORE FRESH START ACCOUNTING (NON-GAAP)**
| Gross Charge-offs To Average Finance Receivables | Quarter Ended September 30, 2010 | Quarter Ended June 30, 2010(1) | Quarter Ended March 31, 2010(1) | Nine Months Ended September 30, 2010 | ||||||||||||
| Corporate Finance | $ | 129.1 | 4.59 | % | $ | 164.2 | 4.91 | % | $ | 134.1 | 3.58 | % | $ | 427.4 | 4.31 | % |
| Transportation Finance | - | - | - | - | - | - | - | - | ||||||||
| Trade Finance | 7.8 | 1.17 | % | 12.5 | 1.90 | % | 4.7 | 0.66 | % | 25.0 | 1.23 | % | ||||
| Vendor Finance | 77.6 | 5.08 | % | 55.1 | 3.18 | % | 67.9 | 3.23 | % | 200.6 | 3.72 | % | ||||
| Commercial Segments | 214.5 | 3.93 | % | 231.8 | 3.73 | % | 206.7 | 2.93 | % | 653.0 | 3.47 | % | ||||
| Consumer | 18.2 | 0.76 | % | 19.8 | 0.79 | % | 28.6 | 1.08 | % | 66.6 | 0.88 | % | ||||
| Total | $ | 232.7 | 2.97 | % | $ | 251.6 | 2.89 | % | $ | 235.3 | 2.42 | % | $ | 719.6 | 2.73 | % |
| Non-accruing Loans To Finance Receivables | September 30, 2010 | June 30, 2010(1) | March 31, 2010(1) | December 31, 2009 | ||||||||||||
| Corporate Finance | $ | 1,990.0 | 18.56 | % | $ | 2,290.9 | 19.57 | % | $ | 2,280.2 | 15.85 | % | $ | 2,226.1 | 14.64 | % |
| Transportation Finance | 198.5 | 11.22 | % | 175.2 | 9.44 | % | 185.3 | 9.18 | % | 8.4 | 0.38 | % | ||||
| Trade Finance | 198.7 | 7.62 | % | 96.0 | 3.81 | % | 90.5 | 3.23 | % | 97.3 | 3.24 | % | ||||
| Vendor Finance | 191.3 | 3.52 | % | 267.7 | 4.11 | % | 324.6 | 4.42 | % | 295.9 | 3.14 | % | ||||
| Commercial Segments | 2,578.5 | 12.56 | % | 2,829.8 | 12.52 | % | 2,880.6 | 10.85 | % | 2,627.7 | 8.80 | % | ||||
| Consumer | 1.6 | 0.02 | % | 197.2 | 2.00 | % | 200.6 | 1.99 | % | 197.7 | 1.74 | % | ||||
| Total | $ | 2,580.1 | 8.81 | % | $ | 3,027.0 | 9.33 | % | $ | 3,081.2 | 8.41 | % | $ | 2,825.4 | 6.86 | % |
**Credit metrics before fresh start accounting are non-GAAP measurements and are used by management for credit trend analysis.
PROVISION AND ALLOWANCE COMPONENTS
| Provision for Credit Losses | Allowance for Loan Losses | ||||||||||||||||
| September 30, 2010 | Quarters Ended June 30, 2010(1) | March 31, 2010(1) | Nine Months Ended September 30, 2010 | September 30, 2010 | June 30, 2010(1) | ||||||||||||
| Specific reserves - impaired loans | $ | 18.0 | $ | 27.8 | $ | 20.0 | $ | 65.8 | $ | 65.8 | $ | 47.8 | |||||
| Non-specific reserves | 46.6 | 110.2 | 130.7 | 287.5 | 331.3 | 280.0 | |||||||||||
| Charge-offs | 100.6 | 106.3 | 75.8 | 282.7 | - | - | |||||||||||
| Totals | $ | 165.2 | $ | 244.3 | $ | 226.5 | $ | 636.0 | $ | 397.1 | $ | 327.8 | |||||
(1) Certain balances have been revised from previously reported amounts.
13
CIT GROUP INC. AND SUBSIDIARIES
(dollars in millions)
SEGMENT RESULTS
| Corporate Finance | Transportation Finance | Trade Finance | Vendor Finance | Commercial Segments | Consumer | Corporate and Other | Consolidated | ||||||||||||||||||
| Quarter ended September 30, 2010 | |||||||||||||||||||||||||
| Total interest income | $ | 370.3 | $ | 51.0 | $ | 23.2 | $ | 277.0 | $ | 721.5 | $ | 88.8 | $ | 5.4 | $ | 815.7 | |||||||||
| Total interest expense | (218.3 | ) | (237.6 | ) | (37.7 | ) | (160.8 | ) | (654.4 | ) | (69.3 | ) | (8.5 | ) | (732.2 | ) | |||||||||
| Provision for credit losses | (105.6 | ) | (17.2 | ) | (11.4 | ) | (38.5 | ) | (172.7 | ) | (7.5 | ) | 15.0 | (165.2 | ) | ||||||||||
| Rental income on operating leases | 6.1 | 308.4 | - | 83.9 | 398.4 | - | - | 398.4 | |||||||||||||||||
| Other income, excluding rental income | 132.5 | 28.7 | 44.1 | 65.8 | 271.1 | (8.3 | ) | 6.6 | 269.4 | ||||||||||||||||
| Depreciation on operating lease equipment | (3.2 | ) | (82.2 | ) | - | (76.3 | ) | (161.7 | ) | - | - | (161.7 | ) | ||||||||||||
| Other expenses | (69.7 | ) | (36.7 | ) | (30.7 | ) | (69.6 | ) | (206.7 | ) | (19.1 | ) | (3.0 | ) | (228.8 | ) | |||||||||
| Income (loss) before provision for income taxes | $ | 112.1 | $ | 14.4 | $ | (12.5 | ) | $ | 81.5 | $ | 195.5 | $ | (15.4 | ) | $ | 15.5 | $ | 195.6 | |||||||
| Net income (loss) | $ | 87.6 | $ | 10.3 | $ | (10.5 | ) | $ | 79.1 | $ | 166.5 | $ | (14.5 | ) | $ | (20.5 | ) | $ | 131.5 | ||||||
| Funded new business volume | $ | 316.5 | $ | 209.5 | $ | - | $ | 541.9 | $ | 1,067.9 | $ | - | $ | - | $ | 1,067.9 | |||||||||
| Average Earning Assets | $ | 10,251.6 | $ | 11,968.9 | $ | 1,703.4 | $ | 6,413.8 | $ | 30,337.7 | $ | 8,722.8 | $ | - | $ | 39,060.5 | |||||||||
| Average Finance Receivables | $ | 9,766.7 | $ | 1,639.8 | $ | 2,641.8 | $ | 5,857.2 | $ | 19,905.5 | $ | 8,608.6 | $ | - | $ | 28,514.1 | |||||||||
| Quarter ended June 30, 2010(1) | |||||||||||||||||||||||||
| Total interest income | $ | 487.5 | $ | 53.3 | $ | 24.4 | $ | 333.2 | $ | 898.4 | $ | 96.5 | $ | 5.0 | $ | 999.9 | |||||||||
| Total interest expense | (274.7 | ) | (234.6 | ) | (49.5 | ) | (190.4 | ) | (749.2 | ) | (64.2 | ) | 2.1 | (811.3 | ) | ||||||||||
| Provision for credit losses | (92.8 | ) | (3.0 | ) | (12.3 | ) | (111.9 | ) | (220.0 | ) | (9.3 | ) | (15.0 | ) | (244.3 | ) | |||||||||
| Rental income on operating leases | 7.3 | 316.8 | - | 96.1 | 420.2 | - | (0.5 | ) | 419.7 | ||||||||||||||||
| Other income, excluding rental income | 207.4 | 18.2 | 51.4 | 33.2 | 310.2 | 18.3 | 11.0 | 339.5 | |||||||||||||||||
| Depreciation on operating lease equipment | (5.1 | ) | (85.9 | ) | - | (87.8 | ) | (178.8 | ) | - | 0.3 | (178.5 | ) | ||||||||||||
| Other expenses | (89.7 | ) | (45.5 | ) | (33.0 | ) | (86.3 | ) | (254.5 | ) | (22.7 | ) | - | (277.2 | ) | ||||||||||
| Income (loss) before provision for income taxes | $ | 239.9 | $ | 19.3 | $ | (19.0 | ) | $ | (13.9 | ) | $ | 226.3 | $ | 18.6 | $ | 2.9 | $ | 247.8 | |||||||
| Net income (loss) | $ | 202.8 | $ | 8.9 | $ | (18.1 | ) | $ | (37.4 | ) | $ | 156.2 | $ | 18.3 | $ | (3.1 | ) | $ | 171.4 | ||||||
| Funded new business volume | $ | 245.1 | $ | 255.5 | $ | - | $ | 532.4 | $ | 1,033.0 | $ | - | $ | - | $ | 1,033.0 | |||||||||
| Average Earning Assets | $ | 11,497.1 | $ | 12,020.1 | $ | 1,701.1 | $ | 7,438.5 | $ | 32,656.8 | $ | 9,090.3 | $ | - | $ | 41,747.1 | |||||||||
| Average Finance Receivables | $ | 11,290.5 | $ | 1,747.6 | $ | 2,637.2 | $ | 6,416.9 | $ | 22,092.2 | $ | 8,861.9 | $ | - | $ | 30,954.1 | |||||||||
| Quarter ended March 31, 2010(1) | |||||||||||||||||||||||||
| Total interest income | $ | 539.5 | $ | 58.3 | $ | 30.5 | $ | 359.6 | $ | 987.9 | $ | 94.6 | $ | 4.6 | $ | 1,087.1 | |||||||||
| Total interest expense | (297.3 | ) | (258.5 | ) | (41.6 | ) | (167.9 | ) | (765.3 | ) | (70.9 | ) | 2.0 | (834.2 | ) | ||||||||||
| Provision for credit losses | (134.3 | ) | (1.3 | ) | (33.9 | ) | (52.5 | ) | (222.0 | ) | (4.5 | ) | - | (226.5 | ) | ||||||||||
| Rental income on operating leases | 8.8 | 299.2 | - | 110.8 | 418.8 | - | (0.6 | ) | 418.2 | ||||||||||||||||
| Other income, excluding rental income | 103.6 | 22.2 | 49.2 | 38.8 | 213.8 | 5.8 | (68.2 | ) | 151.4 | ||||||||||||||||
| Depreciation on operating lease equipment | (3.6 | ) | (78.6 | ) | - | (90.7 | ) | (172.9 | ) | - | 0.2 | (172.7 | ) | ||||||||||||
| Other expenses | (79.4 | ) | (39.6 | ) | (32.0 | ) | (86.9 | ) | (237.9 | ) | (21.5 | ) | (1.8 | ) | (261.2 | ) | |||||||||
| Income (loss) before provision for income taxes | $ | 137.3 | $ | 1.7 | $ | (27.8 | ) | $ | 111.2 | $ | 222.4 | $ | 3.5 | $ | (63.8 | ) | $ | 162.1 | |||||||
| Net income (loss) | $ | 133.1 | $ | 8.1 | $ | (26.0 | ) | $ | 90.3 | $ | 205.5 | $ | 3.2 | $ | (93.3 | ) | $ | 115.4 | |||||||
| Funded new business volume | $ | 145.4 | $ | 225.7 | $ | - | $ | 532.3 | $ | 903.4 | $ | - | $ | - | $ | 903.4 | |||||||||
| Average Earning Assets | $ | 12,607.3 | $ | 12,004.0 | $ | 1,855.5 | $ | 8,545.4 | $ | 35,012.2 | $ | 9,630.9 | $ | - | $ | 44,643.1 | |||||||||
| Average Finance Receivables | $ | 12,156.1 | $ | 1,841.4 | $ | 2,810.9 | $ | 7,779.1 | $ | 24,587.5 | $ | 9,460.2 | $ | - | $ | 34,047.7 | |||||||||
| Nine months ended September 30, 2010 | |||||||||||||||||||||||||
| Total interest income | $ | 1,397.3 | $ | 162.6 | $ | 78.1 | $ | 969.8 | $ | 2,607.8 | $ | 279.9 | $ | 15.0 | $ | 2,902.7 | |||||||||
| Total interest expense | (790.3 | ) | (730.7 | ) | (128.8 | ) | (519.1 | ) | (2,168.9 | ) | (204.4 | ) | (4.4 | ) | (2,377.7 | ) | |||||||||
| Provision for credit losses | (332.7 | ) | (21.5 | ) | (57.6 | ) | (202.9 | ) | (614.7 | ) | (21.3 | ) | - | (636.0 | ) | ||||||||||
| Rental income on operating leases | 22.2 | 924.4 | - | 290.8 | 1,237.4 | - | (1.1 | ) | 1,236.3 | ||||||||||||||||
| Other income, excluding rental income | 443.5 | 69.1 | 144.7 | 137.8 | 795.1 | 15.8 | (50.6 | ) | 760.3 | ||||||||||||||||
| Depreciation on operating lease equipment | (11.9 | ) | (246.7 | ) | - | (254.8 | ) | (513.4 | ) | - | 0.5 | (512.9 | ) | ||||||||||||
| Other expenses | (238.8 | ) | (121.8 | ) | (95.7 | ) | (242.8 | ) | (699.1 | ) | (63.3 | ) | (4.8 | ) | (767.2 | ) | |||||||||
| Income (loss) before provision for income taxes | $ | 489.3 | $ | 35.4 | $ | (59.3 | ) | $ | 178.8 | $ | 644.2 | $ | 6.7 | $ | (45.4 | ) | $ | 605.5 | |||||||
| Net income (loss) | $ | 423.5 | $ | 27.3 | $ | (54.6 | ) | $ | 132.0 | $ | 528.2 | $ | 7.0 | $ | (116.9 | ) | $ | 418.3 | |||||||
| Funded new business volume | $ | 707.0 | $ | 690.7 | $ | - | $ | 1,606.6 | $ | 3,004.3 | $ | - | $ | - | $ | 3,004.3 | |||||||||
| Average Earning Assets | $ | 11,457.6 | $ | 11,998.5 | $ | 1,752.8 | $ | 7,467.5 | $ | 32,676.4 | $ | 9,143.8 | $ | - | $ | 41,820.2 | |||||||||
| Average Finance Receivables | $ | 11,061.4 | $ | 1,743.0 | $ | 2,705.1 | $ | 6,735.1 | $ | 22,244.6 | $ | 8,999.7 | $ | - | $ | 31,244.3 | |||||||||
| (1) Certain balances have been revised from previously reported amounts. | |||||||||||||||||||||||||
14
CIT GROUP INC. AND SUBSIDIARIES
REVISED UNAUDITED CONSOLIDATED INCOME STATEMENTS
(dollars in millions, except per share data)
| Quarter Ended June 30, 2010 | Quarter Ended March 31, 2010 | Six Months Ended June 30, 2010 | |||||||||||||||||||||||||
| As Reported | Adjustments | As Revised | As Reported | Adjustments | As Revised | As Reported | Adjustments | As Revised | |||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||
| Interest and fees on loans(1) | $ | 987.2 | $ | 6.4 | $ | 993.6 | $ | 1,043.5 | $ | 38.1 | $ | 1,081.6 | $ | 2,030.7 | $ | 44.5 | $ | 2,075.2 | |||||||||
| Interest and dividends on investments | 6.3 | - | 6.3 | 5.5 | - | 5.5 | 11.8 | - | 11.8 | ||||||||||||||||||
| Total interest income | 993.5 | 6.4 | 999.9 | 1,049.0 | 38.1 | 1,087.1 | 2,042.5 | 44.5 | 2,087.0 | ||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||
| Interest on long-term borrowings(5) | (784.7 | ) | (1.3 | ) | (786.0 | ) | (807.7 | ) | 0.4 | (807.3 | ) | (1,592.4 | ) | (0.9 | ) | (1,593.3 | ) | ||||||||||
| Interest on deposits(2) | (28.9 | ) | 3.6 | (25.3 | ) | (30.1 | ) | 3.2 | (26.9 | ) | (59.0 | ) | 6.8 | (52.2 | ) | ||||||||||||
| Total interest expense | (813.6 | ) | 2.3 | (811.3 | ) | (837.8 | ) | 3.6 | (834.2 | ) | (1,651.4 | ) | 5.9 | (1,645.5 | ) | ||||||||||||
| Net interest revenue | 179.9 | 8.7 | 188.6 | 211.2 | 41.7 | 252.9 | 391.1 | 50.4 | 441.5 | ||||||||||||||||||
| Provision for credit losses(3) | (260.7 | ) | 16.4 | (244.3 | ) | (186.6 | ) | (39.9 | ) | (226.5 | ) | (447.3 | ) | (23.5 | ) | (470.8 | ) | ||||||||||
| Net interest revenue, after credit provision | (80.8 | ) | 25.1 | (55.7 | ) | 24.6 | 1.8 | 26.4 | (56.2 | ) | 26.9 | (29.3 | ) | ||||||||||||||
| Other income | |||||||||||||||||||||||||||
| Rental income on operating leases | 419.7 | - | 419.7 | 418.2 | - | 418.2 | 837.9 | - | 837.9 | ||||||||||||||||||
| Other(4),(6) | 330.6 | 8.9 | 339.5 | 132.2 | 19.2 | 151.4 | 462.8 | 28.1 | 490.9 | ||||||||||||||||||
| Total other income | 750.3 | 8.9 | 759.2 | 550.4 | 19.2 | 569.6 | 1,300.7 | 28.1 | 1,328.8 | ||||||||||||||||||
| Other expenses | |||||||||||||||||||||||||||
| Depreciation on operating lease equipment | (179.0 | ) | 0.5 | (178.5 | ) | (173.5 | ) | 0.8 | (172.7 | ) | (352.5 | ) | 1.3 | (351.2 | ) | ||||||||||||
| Operating expenses | (277.0 | ) | (0.2 | ) | (277.2 | ) | (261.9 | ) | 0.7 | (261.2 | ) | (538.9 | ) | 0.5 | (538.4 | ) | |||||||||||
| Total other expenses | (456.0 | ) | 0.3 | (455.7 | ) | (435.4 | ) | 1.5 | (433.9 | ) | (891.4 | ) | 1.8 | (889.6 | ) | ||||||||||||
| Income before provision for income taxes | 213.5 | 34.3 | 247.8 | 139.6 | 22.5 | 162.1 | 353.1 | 56.8 | 409.9 | ||||||||||||||||||
| Provision for income taxes(7) | (71.1 | ) | (5.0 | ) | (76.1 | ) | (42.5 | ) | (4.4 | ) | (46.9 | ) | (113.6 | ) | (9.4 | ) | (123.0 | ) | |||||||||
| Net income before attribution of noncontrolling interests | 142.4 | 29.3 | 171.7 | 97.1 | 18.1 | 115.2 | 239.5 | 47.4 | 286.9 | ||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests, after tax | (0.3 | ) | - | (0.3 | ) | 0.2 | - | 0.2 | (0.1 | ) | - | (0.1 | ) | ||||||||||||||
| Net income | $ | 142.1 | $ | 29.3 | $ | 171.4 | $ | 97.3 | $ | 18.1 | $ | 115.4 | $ | 239.4 | $ | 47.4 | $ | 286.8 | |||||||||
| Basic earnings per common share | $ | 0.71 | $ | 0.15 | $ | 0.86 | $ | 0.49 | $ | 0.09 | $ | 0.58 | $ | 1.20 | $ | 0.23 | $ | 1.43 | |||||||||
| Average number of common shares - basic (thousands) | 200,075 | 200,075 | 200,040 | 200,040 | 200,057 | 200,057 | |||||||||||||||||||||
| Diluted earnings per common share | $ | 0.71 | $ | 0.14 | $ | 0.85 | $ | 0.49 | $ | 0.09 | $ | 0.58 | $ | 1.19 | $ | 0.24 | $ | 1.43 | |||||||||
| Average number of common shares - diluted (thousands) | 200,644 | 200,644 | 200,076 | 200,076 | 200,359 | 200,359 | |||||||||||||||||||||
Adjustments
(1) As noted in the Company's June 30, 2010 Form 10-Q, the Company corrected the accounting for performing loans in the Corporate Finance and Transportation Finance segments. As a result, $10.9 million of accretion income was incorrectly reported in the second quarter and now is correctly reflected in the first quarter. In the quarter ended September 30, 2010, management also identified an additional group of Corporate Finance segment loans for which accretion income had not been correctly recorded in the quarters ended March 31 and June 30, 2010.
(2) Interest on deposits was reduced to write-off fees that should have been written off at December 31, 2009 in conjunction with the application of FSA. The balance written off was approximately $30 million and was recorded as an increase to Goodwill.
(3) Provision for credit losses was increased for the March quarter primarily due to nonaccretable discounts that were incorrectly utilized to offset charge-offs for certain Corporate Finance loans. In the quarter ended June 30, 2010 the provision for credit losses was decreased, primarily related to a provision that was incorrectly recorded by the Company related to the nonaccretable discount noted above.
(4) Other income was increased reflecting fees received on a Vendor Finance liquidating portfolio that were incorrectly deferred.
(5) Interest expense on long-term borrowings was reduced due to incorrect recording of certain accruals. This correction resulted in decreases to the quarters ended March 31 and June 30, offset by a reclassification of certain funding related fees incorrectly recorded in Other income.
(6) Other income for the March quarter was increased, and the June quarter decreased, to correct the recording of gains recognized on asset sales and an ineffective hedge transaction, both of which were originally incorrectly recorded in the second quarter.
(7) Provision for income taxes was increased as a result of recording these adjustments.
15
CIT GROUP INC. AND SUBSIDIARIES
REVISED UNAUDITED CONSOLIDATED BALANCE SHEETS
(dollars in millions, except per share data)
| At June 30, 2010 | At March 31, 2010 | At December 31, 2009 | |||||||||||||||||||||||
| As Reported | Adjustments | As Revised | As Reported | Adjustments | As Revised | As Reported | Adjustments | As Revised | |||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Total cash and deposits | $ | 10,666.4 | $ | - | $ | 10,666.4 | $ | 10,015.6 | $ | - | $ | 10,015.6 | $ | 9,825.9 | $ | - | $ | 9,825.9 | |||||||
| Trading assets at fair value - derivatives | 216.1 | - | 216.1 | 93.5 | - | 93.5 | 44.1 | - | 44.1 | ||||||||||||||||
| Assets held for sale | 572.5 | - | 572.5 | 1,368.8 | - | 1,368.8 | 343.8 | - | 343.8 | ||||||||||||||||
| Loans(1) | 28,883.2 | 58.3 | 28,941.5 | 32,025.7 | 43.1 | 32,068.8 | 34,865.8 | 25.3 | 34,891.1 | ||||||||||||||||
| Allowance for loan losses(2) | (337.8 | ) | 10.0 | (327.8 | ) | (180.8 | ) | (6.3 | ) | (187.1 | ) | - | - | - | |||||||||||
| Total loans, net of allowance for loan | |||||||||||||||||||||||||
| losses | 28,545.4 | 68.3 | 28,613.7 | 31,844.9 | 36.8 | 31,881.7 | 34,865.8 | 25.3 | 34,891.1 | ||||||||||||||||
| Operating lease equipment, net | 10,950.7 | 1.4 | 10,952.1 | 10,931.0 | 0.8 | 10,931.8 | 10,910.0 | - | 10,910.0 | ||||||||||||||||
| Goodwill and intangible assets, net(3) | 407.9 | 3.7 | 411.6 | 440.9 | 3.7 | 444.6 | 464.5 | 3.7 | 468.2 | ||||||||||||||||
| Unsecured counterparty receivable | 818.7 | - | 818.7 | 914.6 | - | 914.6 | 1,094.5 | - | 1,094.5 | ||||||||||||||||
| Other assets(4) | 2,739.1 | (25.1 | ) | 2,714.0 | 2,451.2 | (28.9 | ) | 2,422.3 | 2,480.5 | (29.0 | ) | 2,451.5 | |||||||||||||
| Total assets | $ | 54,916.8 | $ | 48.3 | $ | 54,965.1 | $ | 58,060.5 | $ | 12.4 | $ | 58,072.9 | $ | 60,029.1 | $ | - | $ | 60,029.1 | |||||||
| Liabilities | |||||||||||||||||||||||||
| Deposits | $ | 4,708.9 | $ | - | $ | 4,708.9 | $ | 4,853.6 | $ | - | $ | 4,853.6 | $ | 5,218.6 | $ | - | $ | 5,218.6 | |||||||
| Trading liabilities at fair value - | |||||||||||||||||||||||||
| derivatives | 46.9 | - | 46.9 | 55.7 | - | 55.7 | 41.9 | - | 41.9 | ||||||||||||||||
| Credit balances of factoring clients | 877.3 | - | 877.3 | 881.1 | - | 881.1 | 892.9 | - | 892.9 | ||||||||||||||||
| Other liabilities | 2,373.3 | 0.9 | 2,374.2 | 2,372.0 | (1.7 | ) | 2,370.3 | 2,211.3 | - | 2,211.3 | |||||||||||||||
| Total long-term borrowings | 38,276.5 | - | 38,276.5 | 41,369.1 | - | 41,369.1 | 43,263.0 | - | 43,263.0 | ||||||||||||||||
| Total liabilities | 46,282.9 | 0.9 | 46,283.8 | 49,531.5 | (1.7 | ) | 49,529.8 | 51,627.7 | - | 51,627.7 | |||||||||||||||
| Equity | |||||||||||||||||||||||||
| Stockholders’ equity | |||||||||||||||||||||||||
| Common stock | 2.0 | - | 2.0 | 2.0 | - | 2.0 | 2.0 | - | 2.0 | ||||||||||||||||
| Paid-in capital | 8,419.1 | - | 8,419.1 | 8,403.8 | - | 8,403.8 | 8,398.0 | - | 8,398.0 | ||||||||||||||||
| Accumulated earnings(5) | 225.0 | 47.4 | 272.4 | 82.9 | 18.1 | 101.0 | - | - | - | ||||||||||||||||
| Accumulated other comprehensive | |||||||||||||||||||||||||
| (loss) income | (9.7 | ) | - | (9.7 | ) | 39.2 | (4.0 | ) | 35.2 | - | - | - | |||||||||||||
| Treasury stock, at cost | (4.0 | ) | - | (4.0 | ) | (0.1 | ) | - | (0.1 | ) | - | - | - | ||||||||||||
| Total common stockholders’ equity | 8,632.4 | 47.4 | 8,679.8 | 8,527.8 | 14.1 | 8,541.9 | 8,400.0 | - | 8,400.0 | ||||||||||||||||
| Noncontrolling interests | 1.5 | - | 1.5 | 1.2 | - | 1.2 | 1.4 | - | 1.4 | ||||||||||||||||
| Total equity | 8,633.9 | 47.4 | 8,681.3 | 8,529.0 | 14.1 | 8,543.1 | 8,401.4 | - | 8,401.4 | ||||||||||||||||
| Total liabilities and equity | $ | 54,916.8 | $ | 48.3 | $ | 54,965.1 | $ | 58,060.5 | $ | 12.4 | $ | 58,072.9 | $ | 60,029.1 | $ | - | $ | 60,029.1 | |||||||
| Book Value Per Common Share | |||||||||||||||||||||||||
| Book value per common share | $ | 43.11 | $ | 0.23 | $ | 43.34 | $ | 42.63 | $ | 0.07 | $ | 42.70 | $ | 41.99 | $ | - | $ | 41.99 | |||||||
| Tangible book value per common share | $ | 41.07 | $ | 0.22 | $ | 41.29 | $ | 40.43 | $ | 0.05 | $ | 40.48 | $ | 39.67 | $ | (0.02 | ) | $ | 39.65 | ||||||
(1) The increase in loans is due primarily to the incremental FSA accretion income recorded.
(2) The increase to the allowance for loan losses in the first quarter is due to the impact associated with the incremental FSA accretion income recorded. The decrease in the second quarter is due to the provision that was incorrectly recorded related to the incorrect utilization of nonaccretable discount.
(3) The goodwill adjustment reflects the net amount of FSA discount refinement and fees written off.
(4) Other assets decreased due to the write-off of fees.
(5) Accumulated earnings increased due to the adjustment to net income in the first and second quarters.
16
CIT GROUP INC. AND SUBSIDIARIES
REVISED FSA BALANCES
(dollars in millions)
| Fresh Start Accounting: (Discount) / Premium | Accretable | Non-accretable | |||||||||||||||
| As Reported | Adjustments | As Revised | As Reported | Adjustments | As Revised | ||||||||||||
| At June 30, 2010 | |||||||||||||||||
| Loans | $ | (2,369.8 | ) | $ | 29.4 | $ | (2,340.4 | ) | $ | (1,184.9 | ) | $ | 6.0 | $ | (1,178.9 | ) | |
| Operating lease equipment, net | (3,109.3 | ) | 1.4 | (3,107.9 | ) | - | - | - | |||||||||
| Goodwill and Intangible assets | 168.5 | - | 168.5 | 239.4 | 3.7 | 243.1 | |||||||||||
| Other assets | (261.2 | ) | - | (261.2 | ) | - | - | - | |||||||||
| Total assets | $ | (5,571.8 | ) | $ | 30.8 | $ | (5,541.0 | ) | $ | (945.5 | ) | $ | 9.7 | $ | (935.8 | ) | |
| Deposits | $ | 112.3 | $ | - | $ | 112.3 | $ | - | $ | - | $ | - | |||||
| Long-term borrowings | (3,195.0 | ) | - | (3,195.0 | ) | - | - | - | |||||||||
| Other liabilities | - | - | - | 285.4 | - | 285.4 | |||||||||||
| Total liabilities | $ | (3,082.7 | ) | $ | - | $ | (3,082.7 | ) | $ | 285.4 | $ | - | $ | 285.4 | |||
| At March 31, 2010 | |||||||||||||||||
| Loans | $ | (3,030.0 | ) | $ | (47.8 | ) | $ | (3,077.8 | ) | $ | (1,566.0 | ) | $ | 75.9 | $ | (1,490.1 | ) |
| Operating lease equipment, net | (3,153.4 | ) | 0.7 | (3,152.7 | ) | - | - | - | |||||||||
| Goodwill and Intangible assets | 201.5 | - | 201.5 | 239.4 | 3.7 | 243.1 | |||||||||||
| Other assets | (285.2 | ) | - | (285.2 | ) | - | - | - | |||||||||
| Total assets | $ | (6,267.1 | ) | $ | (47.1 | ) | $ | (6,314.2 | ) | $ | (1,326.6 | ) | $ | 79.6 | $ | (1,247.0 | ) |
| Deposits | $ | 121.6 | $ | - | $ | 121.6 | $ | - | $ | - | $ | - | |||||
| Long-term borrowings | (3,284.9 | ) | - | (3,284.9 | ) | - | - | - | |||||||||
| Other liabilities | - | - | - | 306.7 | - | 306.7 | |||||||||||
| Total liabilities | $ | (3,163.3 | ) | $ | - | $ | (3,163.3 | ) | $ | 306.7 | $ | - | $ | 306.7 | |||
| At December 31, 2009 | |||||||||||||||||
| Loans | $ | (3,507.3 | ) | $ | (49.2 | ) | $ | (3,556.5 | ) | $ | (1,755.1 | ) | $ | 71.4 | $ | (1,683.7 | ) |
| Operating lease equipment, net | (3,239.7 | ) | - | (3,239.7 | ) | - | - | - | |||||||||
| Goodwill and Intangible assets | 225.1 | - | 225.1 | 239.4 | 3.7 | 243.1 | |||||||||||
| Other assets | (321.0 | ) | - | (321.0 | ) | - | - | - | |||||||||
| Total assets | $ | (6,842.9 | ) | $ | (49.2 | ) | $ | (6,892.1 | ) | $ | (1,515.7 | ) | $ | 75.1 | $ | (1,440.6 | ) |
| Deposits | $ | 131.4 | $ | - | $ | 131.4 | $ | - | $ | - | $ | - | |||||
| Long-term borrowings | (3,394.4 | ) | - | (3,394.4 | ) | - | - | - | |||||||||
| Other liabilities | - | - | - | 336.6 | - | 336.6 | |||||||||||
| Total liabilities | $ | (3,263.0 | ) | $ | - | $ | (3,263.0 | ) | $ | 336.6 | $ | - | $ | 336.6 | |||
17
CIT GROUP INC. AND SUBSIDIARIES
(dollars in millions)
| REVISED SEGMENT RESULTS | Quarter Ended June 30, 2010 | Quarter Ended March 31, 2010 | Six Months Ended June 30, 2010 | ||||||||||||||||||||||||
| As Reported | Adjustments | As Revised | As Reported | Adjustments | As Revised | As Reported | Adjustments | As Revised | |||||||||||||||||||
| Corporate Finance | |||||||||||||||||||||||||||
| Total interest income | $ | 481.7 | $ | 5.8 | $ | 487.5 | $ | 504.0 | $ | 35.5 | $ | 539.5 | $ | 985.7 | $ | 41.3 | $ | 1,027.0 | |||||||||
| Total interest expense | (273.6 | ) | (1.1 | ) | (274.7 | ) | (297.0 | ) | (0.3 | ) | (297.3 | ) | (570.6 | ) | (1.4 | ) | (572.0 | ) | |||||||||
| Provision for credit losses | (109.2 | ) | 16.4 | (92.8 | ) | (94.4 | ) | (39.9 | ) | (134.3 | ) | (203.6 | ) | (23.5 | ) | (227.1 | ) | ||||||||||
| Rental income on operating leases | 7.3 | - | 7.3 | 8.8 | - | 8.8 | 16.1 | - | 16.1 | ||||||||||||||||||
| Other income, excluding rental income | 205.9 | 1.5 | 207.4 | 103.1 | 0.5 | 103.6 | 309.0 | 2.0 | 311.0 | ||||||||||||||||||
| Depreciation on operating lease equipment | (5.6 | ) | 0.5 | (5.1 | ) | (4.4 | ) | 0.8 | (3.6 | ) | (10.0 | ) | 1.3 | (8.7 | ) | ||||||||||||
| Other expenses | (89.7 | ) | - | (89.7 | ) | (79.4 | ) | - | (79.4 | ) | (169.1 | ) | - | (169.1 | ) | ||||||||||||
| Income (loss) before provision for income taxes | $ | 216.8 | $ | 23.1 | $ | 239.9 | $ | 140.7 | $ | (3.4 | ) | $ | 137.3 | $ | 357.5 | $ | 19.7 | $ | 377.2 | ||||||||
| Net income (loss) | $ | 206.4 | $ | (3.6 | ) | $ | 202.8 | $ | 128.3 | $ | 4.8 | $ | 133.1 | $ | 334.7 | $ | 1.2 | $ | 335.9 | ||||||||
| Transportation Finance | |||||||||||||||||||||||||||
| Total interest income | $ | 53.4 | $ | (0.1 | ) | $ | 53.3 | $ | 57.5 | $ | 0.8 | $ | 58.3 | $ | 110.9 | $ | 0.7 | $ | 111.6 | ||||||||
| Total interest expense | (234.6 | ) | - | (234.6 | ) | (258.5 | ) | - | (258.5 | ) | (493.1 | ) | - | (493.1 | ) | ||||||||||||
| Provision for credit losses | (3.0 | ) | - | (3.0 | ) | (1.3 | ) | - | (1.3 | ) | (4.3 | ) | - | (4.3 | ) | ||||||||||||
| Rental income on operating leases | 316.8 | - | 316.8 | 299.2 | - | 299.2 | 616.0 | - | 616.0 | ||||||||||||||||||
| Other income, excluding rental income | 18.2 | - | 18.2 | 22.2 | - | 22.2 | 40.4 | - | 40.4 | ||||||||||||||||||
| Depreciation on operating lease equipment | (85.9 | ) | - | (85.9 | ) | (78.6 | ) | - | (78.6 | ) | (164.5 | ) | - | (164.5 | ) | ||||||||||||
| Other expenses | (45.5 | ) | - | (45.5 | ) | (39.6 | ) | - | (39.6 | ) | (85.1 | ) | - | (85.1 | ) | ||||||||||||
| Income (loss) before provision for income taxes | $ | 19.4 | $ | (0.1 | ) | $ | 19.3 | $ | 0.9 | $ | 0.8 | $ | 1.7 | $ | 20.3 | $ | 0.7 | $ | 21.0 | ||||||||
| Net income (loss) | $ | 25.1 | $ | (16.2 | ) | $ | 8.9 | $ | (7.8 | ) | $ | 15.9 | $ | 8.1 | $ | 17.3 | $ | (0.3 | ) | $ | 17.0 | ||||||
| Trade Finance | |||||||||||||||||||||||||||
| Total interest income | $ | 24.4 | $ | - | $ | 24.4 | $ | 30.5 | $ | - | $ | 30.5 | $ | 54.9 | $ | - | $ | 54.9 | |||||||||
| Total interest expense | (45.1 | ) | (4.4 | ) | (49.5 | ) | (38.5 | ) | (3.1 | ) | (41.6 | ) | (83.6 | ) | (7.5 | ) | (91.1 | ) | |||||||||
| Provision for credit losses | (12.3 | ) | - | (12.3 | ) | (33.9 | ) | - | (33.9 | ) | (46.2 | ) | - | (46.2 | ) | ||||||||||||
| Rental income on operating leases | - | - | - | - | - | - | - | - | - | ||||||||||||||||||
| Other income, excluding rental income | 47.0 | 4.4 | 51.4 | 46.1 | 3.1 | 49.2 | 93.1 | 7.5 | 100.6 | ||||||||||||||||||
| Depreciation on operating lease equipment | - | - | - | - | - | - | - | - | - | ||||||||||||||||||
| Other expenses | (33.0 | ) | - | (33.0 | ) | (32.0 | ) | - | (32.0 | ) | (65.0 | ) | - | (65.0 | ) | ||||||||||||
| (Loss) before provision for income taxes | $ | (19.0 | ) | $ | - | $ | (19.0 | ) | $ | (27.8 | ) | $ | - | $ | (27.8 | ) | $ | (46.8 | ) | $ | - | $ | (46.8 | ) | |||
| Net income (loss) | $ | (16.0 | ) | $ | (2.1 | ) | $ | (18.1 | ) | $ | (27.8 | ) | $ | 1.8 | $ | (26.0 | ) | $ | (43.8 | ) | $ | (0.3 | ) | $ | (44.1 | ) | |
| Vendor Finance | |||||||||||||||||||||||||||
| Total interest income | $ | 333.2 | $ | - | $ | 333.2 | $ | 359.6 | $ | - | $ | 359.6 | $ | 692.8 | $ | - | $ | 692.8 | |||||||||
| Total interest expense | (190.4 | ) | - | (190.4 | ) | (167.9 | ) | - | (167.9 | ) | (358.3 | ) | - | (358.3 | ) | ||||||||||||
| Provision for credit losses | (111.9 | ) | - | (111.9 | ) | (52.5 | ) | - | (52.5 | ) | (164.4 | ) | - | (164.4 | ) | ||||||||||||
| Rental income on operating leases | 96.1 | - | 96.1 | 110.8 | - | 110.8 | 206.9 | - | 206.9 | ||||||||||||||||||
| Other income, excluding rental income | 26.2 | 7.0 | 33.2 | 27.2 | 11.6 | 38.8 | 53.4 | 18.6 | 72.0 | ||||||||||||||||||
| Depreciation on operating lease equipment | (87.8 | ) | - | (87.8 | ) | (90.7 | ) | - | (90.7 | ) | (178.5 | ) | - | (178.5 | ) | ||||||||||||
| Other expenses | (86.3 | ) | - | (86.3 | ) | (86.9 | ) | - | (86.9 | ) | (173.2 | ) | - | (173.2 | ) | ||||||||||||
| Income (loss) before provision for income taxes | $ | (20.9 | ) | $ | 7.0 | $ | (13.9 | ) | $ | 99.6 | $ | 11.6 | $ | 111.2 | $ | 78.7 | $ | 18.6 | $ | 97.3 | |||||||
| Net income (loss) | $ | (62.1 | ) | $ | 24.7 | $ | (37.4 | ) | $ | 96.6 | $ | (6.3 | ) | $ | 90.3 | $ | 34.5 | $ | 18.4 | $ | 52.9 | ||||||
| Consumer | |||||||||||||||||||||||||||
| Total interest income | $ | 95.8 | $ | 0.7 | $ | 96.5 | $ | 92.8 | $ | 1.8 | $ | 94.6 | $ | 188.6 | $ | 2.5 | $ | 191.1 | |||||||||
| Total interest expense | (64.2 | ) | - | (64.2 | ) | (70.9 | ) | - | (70.9 | ) | (135.1 | ) | - | (135.1 | ) | ||||||||||||
| Provision for credit losses | (9.3 | ) | - | (9.3 | ) | (4.5 | ) | - | (4.5 | ) | (13.8 | ) | - | (13.8 | ) | ||||||||||||
| Rental income on operating leases | - | - | - | - | - | - | - | - | - | ||||||||||||||||||
| Other income, excluding rental income | 18.3 | - | 18.3 | 5.8 | - | 5.8 | 24.1 | - | 24.1 | ||||||||||||||||||
| Depreciation on operating lease equipment | - | - | - | - | - | - | - | - | - | ||||||||||||||||||
| Other expenses | (22.7 | ) | - | (22.7 | ) | (21.5 | ) | - | (21.5 | ) | (44.2 | ) | - | (44.2 | ) | ||||||||||||
| Income before provision for income taxes | $ | 17.9 | $ | 0.7 | $ | 18.6 | $ | 1.7 | $ | 1.8 | $ | 3.5 | $ | 19.6 | $ | 2.5 | $ | 22.1 | |||||||||
| Net income (loss) | $ | 14.2 | $ | 4.1 | $ | 18.3 | $ | 5.2 | $ | (2.0 | ) | $ | 3.2 | $ | 19.4 | $ | 2.1 | $ | 21.5 | ||||||||
| Corporate and Other | |||||||||||||||||||||||||||
| Total interest income | $ | 5.0 | $ | - | $ | 5.0 | $ | 4.6 | $ | - | $ | 4.6 | $ | 9.6 | $ | - | $ | 9.6 | |||||||||
| Total interest expense | (5.7 | ) | 7.8 | 2.1 | (5.0 | ) | 7.0 | 2.0 | (10.7 | ) | 14.8 | 4.1 | |||||||||||||||
| Provision for credit losses | (15.0 | ) | - | (15.0 | ) | - | - | - | (15.0 | ) | - | (15.0 | ) | ||||||||||||||
| Rental income on operating leases | (0.5 | ) | - | (0.5 | ) | (0.6 | ) | - | (0.6 | ) | (1.1 | ) | - | (1.1 | ) | ||||||||||||
| Other income, excluding rental income | 15.0 | (4.0 | ) | 11.0 | (72.2 | ) | 4.0 | (68.2 | ) | (57.2 | ) | - | (57.2 | ) | |||||||||||||
| Depreciation on operating lease equipment | 0.3 | - | 0.3 | 0.2 | - | 0.2 | 0.5 | - | 0.5 | ||||||||||||||||||
| Other expenses | 0.2 | (0.2 | ) | - | (2.5 | ) | 0.7 | (1.8 | ) | (2.3 | ) | 0.5 | (1.8 | ) | |||||||||||||
| Income (loss) before provision for income taxes | $ | (0.7 | ) | $ | 3.6 | $ | 2.9 | $ | (75.5 | ) | $ | 11.7 | $ | (63.8 | ) | $ | (76.2 | ) | $ | 15.3 | $ | (60.9 | ) | ||||
| Net income (loss) | $ | (25.5 | ) | $ | 22.4 | $ | (3.1 | ) | $ | (97.2 | ) | $ | 3.9 | $ | (93.3 | ) | $ | (122.7 | ) | $ | 26.3 | $ | (96.4 | ) | |||
For description of Adjustments, see Revised Unaudited Consolidated Income Statements page 14.
18
CIT GROUP INC. AND SUBSIDIARIES
(dollars in millions)
NON-GAAP DISCLOSURES
Non-GAAP financial measures disclosed by management are meant to provide additional information and insight relative to business trends to investors and, in certain cases, to present financial information as measured by rating agencies and other users of financial information. These measures are not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies.
| Quarters Ended September 30, 2010 | Nine Months Ended September 30, 2010 | |||||
| Total net revenues(1) | ||||||
| Interest income | $ | 815.7 | $ | 2,902.7 | ||
| Rental income on operating leases | 398.4 | 1,236.3 | ||||
| Finance revenue | 1,214.1 | 4,139.0 | ||||
| Interest expense | (732.2 | ) | (2,377.7 | ) | ||
| Depreciation on operating lease equipment | (161.7 | ) | (512.9 | ) | ||
| Net finance revenue | 320.2 | 1,248.4 | ||||
| Other income | 269.4 | 760.3 | ||||
| Total net revenues | $ | 589.6 | $ | 2,008.7 | ||
| Quarter Ended June 30, 2010 | Quarter Ended March 31, 2010 | Six Months Ended June 30, 2010 | ||||||||||||||||||||||
| As Reported | Adjustments | As Revised | As Reported | Adjustments | As Revised | As Reported | Adjustments | As Revised | ||||||||||||||||
| Total net revenues(1) | ||||||||||||||||||||||||
| Interest income | $ | 993.5 | $ | 6.4 | $ | 999.9 | $ | 1,049.0 | $ | 38.1 | $ | 1,087.1 | $ | 2,042.5 | $ | 44.5 | $ | 2,087.0 | ||||||
| Rental income on operating leases | 419.7 | - | 419.7 | 418.2 | - | 418.2 | 837.9 | - | 837.9 | |||||||||||||||
| Finance revenue | 1,413.2 | 6.4 | 1,419.6 | 1,467.2 | 38.1 | 1,505.3 | 2,880.4 | 44.5 | 2,924.9 | |||||||||||||||
| Interest expense | (813.6 | ) | 2.3 | (811.3 | ) | (837.8 | ) | 3.6 | (834.2 | ) | (1,651.4 | ) | 5.9 | (1,645.5 | ) | |||||||||
| Depreciation on operating lease equipment | (179.0 | ) | 0.5 | (178.5 | ) | (173.5 | ) | 0.8 | (172.7 | ) | (352.5 | ) | 1.3 | (351.2 | ) | |||||||||
| Net finance revenue | 420.6 | 9.2 | 429.8 | 455.9 | 42.5 | 498.4 | 876.5 | 51.7 | 928.2 | |||||||||||||||
| Other income | 330.6 | 8.9 | 339.5 | 132.2 | 19.2 | 151.4 | 462.8 | 28.1 | 490.9 | |||||||||||||||
| Total net revenues | $ | 751.2 | $ | 18.1 | $ | 769.3 | $ | 588.1 | $ | 61.7 | $ | 649.8 | $ | 1,339.3 | $ | 79.8 | $ | 1,419.1 | ||||||
| Net Finance Revenue as a % of Average Earning Assets | ||||||
| Quarters Ended | ||||||
| September 30, 2010 | June 30, 2010 | March 31, 2010 | ||||
| As Revised | As Revised | |||||
| GAAP - net finance revenue % | 3.28 | % | 4.12 | % | 4.47 | % |
| FSA | -2.62 | % | -3.79 | % | -3.90 | % |
| Secured credit facility prepayment penalty fee | 0.26 | % | 0.36 | % | 0.11 | % |
| Non-GAAP - adjusted net finance revenue % | 0.92 | % | 0.69 | % | 0.68 | % |
1) Total net revenues are combination of net finance revenues after depreciation on operating leases and other income.