Exhibit 99.1
For Information: Valerie L. Gerard
Vice President - Investor Relations
(973) 422-3284
or
Yvette K. Rudich
Director - Corporate Communications
(973) 597-2095
CIT ANNOUNCES FIRST QUARTER NET INCOME OF $0.60 EPS AND IMPROVED CREDIT QUALITY
o First quarter net income of $127.0 million - diluted EPS of $0.60
o Lower delinquent and non-performing loans - second consecutive quarterly
decline
o Charge-offs decline over 25% from the prior quarter
NEW YORK, April 24, 2003 - CIT Group Inc. (NYSE: CIT) today reported net income
of $127.0 million, $0.60 diluted earnings per share, for the quarter ended March
31, 2003, compared to $141.3 million, or $0.67 diluted earnings per share for
the prior quarter. The reduction in net income from the prior quarter reflects
lower interest margin and other revenue, the effects of which were partially
mitigated by lower charge-offs and reduced operating expenses.
"I am pleased with the progress in asset quality. Leading indicators are
improving and charge-offs are down substantially," said Albert R. Gamper, Jr.,
Chairman, President and CEO. "Asset growth was respectable for the quarter,
however, we continue to experience margin decline, partially the result of our
decision to maintain excess liquidity in this environment."
Financial Highlights:
Portfolio and Managed Assets
Total financing and leasing portfolio assets grew to $37.1 billion at
March 31, 2003, up from $35.9 billion at December 31, 2002 and $33.9 billion at
March 31, 2002. Growth for the quarter was driven by the Commercial Finance
segment, as Business Credit (asset-based lending) and Commercial Services
(factoring) grew 8.4% and 7.6%, respectively, from December 31, 2002, as
customers increased their borrowing levels under existing credit facilities.
These trends were additionally influenced by seasonal factors. Home equity
receivables also grew in the Specialty Finance segment.
Origination volume, excluding factoring, was down 12% and 5% from last
quarter and the prior year quarter. Volume increases from last quarter in the
Specialty Finance - commercial segment (particularly the vendor programs) were
offset by declines in the Business Credit unit and the Equipment Financing and
Leasing segment.
Managed assets increased $1.1 billion to $47.5 billion, up from $46.4
billion last quarter, as securitized receivables declined slightly from December
31, 2002, partially offsetting our on-balance sheet growth. The liquidating
portfolios (owner-operator trucking, franchise, manufactured housing,
recreational vehicle and inventory finance loans) declined to $1.28 billion from
$1.34 billion at December 31, 2002 and $1.98 billion at March 31, 2002. Managed
assets were $48.1 billion at March 31, 2002.
Net Finance and Risk Adjusted Margins
Net finance margin, at 3.63% of average earning assets for the current
quarter, declined from 4.34% during the prior quarter. The decline primarily
reflects the following factors: the continuation of higher funding costs
associated with our term funding initiatives and excess liquidity position,
coupled with lower cost debt maturities; lower fees due to lower origination
volume and reduced rental rates on the aerospace portfolio.
2
Risk adjusted margin (net finance margin after provision for credit
losses) declined to $210.7 million or 2.44%, from $221.0 million or 2.70% last
quarter, as the decline in net finance margin was in part offset by reduced
charge-offs.
Credit Quality
Total 60+ day owned delinquencies declined to $971 million (3.39% of
finance receivables) at March 31, 2003, from $1.001 billion (3.63%) at December
31, 2002 and $1.158 billion (3.90%) at March 31, 2002, marking the second
consecutive quarterly decrease in delinquencies. The improvement from the prior
quarter was led by reductions in the Commercial Finance and Structured Finance
segments. Managed 60+ day delinquencies decreased to $1.361 billion (3.38% of
managed financial assets) at March 31, 2003 from $1.396 billion (3.55%) at
December 31, 2002, and $1.680 billion (4.09%) at March 31, 2002.
Non-performing assets have decreased for two consecutive quarters.
Non-performing assets were $1.006 billion, 3.51% of finance receivables, down
from $1.086 billion, 3.93%, at December 31, 2002 and up slightly from $988.4
million, 3.32%, at March 31, 2002. The reduction for the quarter was largely in
the commercial aerospace portfolio, as aircraft securing United Airlines
receivables on non-accrual last quarter were placed under short-term operating
leases. This reduction was in part offset by the placement of Air Canada assets
on non-accrual status following its bankruptcy announcement.
At March 31, 2003, seven commercial aircraft were off lease, down from
nine at December 31, 2002, as three aircraft were remarketed and one lease
terminated during the quarter. Of the inventory at quarter end, there are signed
leases or letters of intent on four of the aircraft.
The competitive local exchange carrier ("CLEC") portion of the
telecommunications portfolio totaled approximately $238.0 million at March 31,
2003, of which $59.0 million was on non-accrual status, down from comparative
December 31, 2002 balances of $262.3 million and $92.9 million, respectively.
Total specific telecommunication reserves were $139.8 million at March 31, 2003.
3
Total charge-offs during the March quarter were $114.3 million (1.61%),
including $13.8 million of telecommunication loan charge-offs, compared to
$154.5 million (2.32%) during the prior quarter. The tables that follow detail
charge-offs for the current and prior quarters by segment, both in amount and as
a percentage of average finance receivables. In addition to total amounts,
charge-offs relating to the liquidating and telecommunications portfolios are
also presented to provide enhanced analysis.
Charge-offs: ($ millions) Quarter Ended March 31, 2003
- ------------------------- --------------------------------------------------------------
Before
Total Liquidating & Telecom Liquidating/Telecom
--------------- --------------------- -------------------
Equipment Financing & Leasing ..... $ 39.9 2.07% $ 8.4 6.48% $31.5 1.76%
Specialty Finance -- commercial ... 31.0 1.73% 0.4 8.65% 30.6 1.71%
Commercial Finance ................ 16.6 0.80% -- -- 16.6 0.80%
Structured Finance ................ 13.8 1.90% 13.8 8.23% -- --
------ ----- -----
Total Commercial Segments ...... 101.3 1.55% 22.6 7.48% 78.7 1.27%
Specialty Finance -- consumer ..... 13.0 2.36% 6.4 3.09% $ 6.6 1.92%
------ ----- -----
Total .......................... $114.3 1.61% $29.0 5.70% $85.3 1.30%
====== ===== =====
Charge-offs: ($ millions) Quarter Ended December 31, 2002
- ------------------------- --------------------------------------------------------------
Before
Total Liquidating & Telecom Liquidating/Telecom
--------------- --------------------- -------------------
Equipment Financing & Leasing ..... $ 71.1 3.23% $13.3 9.25% $ 57.8 2.81%
Specialty Finance -- commercial ... 23.2 1.55% 2.0 36.36% 21.2 1.42%
Commercial Finance ................ 33.5 1.92% -- -- 33.5 1.92%
Structured Finance ................ 15.5 2.24% 15.5 8.75% -- --
------ ----- ------
Total Commercial Segments ...... 143.3 2.33% 30.8 9.44% 112.5 1.93%
Specialty Finance -- consumer ..... 11.2 2.24% 5.1 2.42% 6.1 2.11%
------ ----- ------
Total .......................... $154.5 2.32% $35.9 6.68% $118.6 1.94%
====== ===== ======
Total telecommunication and liquidating charge-offs were down $6.9 million
from last quarter, largely in the trucking and franchise portfolios. Before
liquidating portfolio charge-offs and telecommunication charge-offs covered by
specific 2002 reserving actions, charge-offs were $85.3 million (1.30% of
average finance receivables) for the current quarter, down from $118.6 million
(1.94%) last quarter. The improvement from last quarter primarily reflects
declines in both the Equipment Financing and Business Credit units, partially
offset by higher Specialty Finance - Commercial charge-offs this quarter, which
included higher losses in the small business loan and leasing units. These small
business loan and leasing units were transferred from Equipment Financing to
Specialty Finance during the quarter. The Equipment Financing
4
trend reflected lower charge-offs in the construction and industrial equipment
businesses, while the Business Credit improvement followed a number of large
write-offs during the prior quarter in connection with concluding several loan
workouts.
Total reserves for credit losses were $757.0 million (2.64% of finance
receivables) at March 31 2003, compared to $760.8 million (2.75%) at December
31, 2002 and $554.9 million (2.11%) at March 31, 2002. The reserve reduction
during the quarter was primarily the result of $13.8 million in
telecommunication loan charge-offs that were applied to the specific
telecommunication reserve. At March 31, 2003, the reserve for credit losses,
before the telecommunication ($139.8 million) and Argentine reserves ($135.0
million), was $482.2 million (1.74% of finance receivables), versus $472.2
million (1.77%) at December 31, 2002. Additionally, the dollar amount of
reserves related to loan impairment (as defined under SFAS 114) included in the
above reserve balances totaled approximately $136 million at March 31, 2003,
down from $157 million at December 31, 2002.
Other Revenue
For the quarter, other revenue totaled $235.5 million, down from $257.1
million for the quarter ended December 31, 2002, reflecting lower fees and other
income and reduced factoring revenues. These declines, which were largely in the
Commercial Finance and Structured Finance segments, were in part offset by
increased equipment sale gains, primarily in the Specialty Finance - Commercial
unit. Securitization gains during the current quarter totaled $30.7 million,
14.4% of pretax income, on volume of $1,237 million, compared to $30.5 million,
12.9% of pretax income, on volume of $1,189 million during the prior quarter.
Salaries and General Operating Expenses
Salaries and general operating expenses were $233.6 million for the
quarter, down from $242.1 million for the December 2002 quarter. The decrease
from last quarter was primarily the result of lower legal, repossession and
collection expenses. Salaries and general operating expenses were 2.08% of
average managed assets during the quarter, versus 2.18% for the prior quarter.
The efficiency ratio for the quarter (salaries and general operating expenses
divided by
5
operating margin, excluding provision for credit losses) was 42.5% as compared
to 39.6% in the prior quarter, reflecting lower revenues in the current quarter.
Headcount was 5,845 at March 31, 2003 compared to 5,835 at December 31,
2002 and 6,230 at March 31, 2002.
Funding and Liquidity
Attractive pricing and strong demand for our commercial paper program
continued for the quarter. Our emphasis on term funding during the quarter
resulted in commercial paper outstandings of $4.5 billion, down from $5.0
billion at December 31, 2002. At March 31, 2003, $5.7 billion of bank lines were
available, which represented 128% backup liquidity of commercial paper
outstanding.
Bank line borrowings were $1.3 billion at March 31, 2003, down from $2.1
billion at December 31, 2002 as an additional $800 million was repaid, including
a $300 million Canadian facility, which expired in March.
Term-debt issued during the quarter totaled $4.4 billion, and consisted of
a $1.0 billion three-year, fixed-rate global issue, $2.6 billion in
variable-rate medium-term notes and $0.8 billion in retail issues.
Securitization volume was $1.2 billion, essentially unchanged from the prior
quarter.
Cash and equivalents were $2.0 billion at March 31, 2003, as excess
liquidity was maintained during the quarter. Though essentially unchanged from
December 31, 2002, average cash balances were above the prior quarter, as excess
liquidity was maintained to pre-fund certain debt maturities this quarter. The
level of liquidity remained well in excess of historical amounts.
6
Capitalization and Leverage
The ratio of tangible equity to managed assets was 10.42% as of March 31,
2003, compared to 10.44% as of December 31, 2002 and 9.14% in the prior year
quarter. The return on tangible equity was 11.0%, compared to 12.7% for the
prior quarter.
Conference Call and Webcast:
We will discuss this quarter's results, as well as on-going strategy, on a
conference call today at 11:00 am (EDT). The interested parties may access the
conference call live today by dialing 877-558-5219 for U.S. and Canadian callers
or 706-634-5438 for international callers, and reference "CIT earnings call," or
at the following website: http://ir.cit.com. An audio replay of the call will be
available beginning no later than three hours after the conclusion of the call
through 12:00 am (EDT) May 1, 2003, by dialing 800-642-1687 for U.S. and
Canadian callers or 706-645-9291 for international callers with the pass-code
9614020, or at the following website: http://ir.cit.com.
Forward-Looking Statements:
This release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. All forward-looking
statements (including statements regarding future financial and operating
results) involve risks, uncertainties and contingencies, many of which are
beyond CIT's control, which may cause actual results, performance, or
achievements to differ materially from anticipated results, performance, or
achievements. All statements contained in this release that are not clearly
historical in nature are forward-looking, and the words "anticipate," "believe,"
"expect," "estimate," "plan," and similar expressions are generally intended to
identify forward-looking statements. Economic, business, funding market,
competitive and/or regulatory factors, among others, affecting CIT's businesses
are examples of factors that could cause actual results to differ materially
from those described in the forward-looking statements. More detailed
information about these factors are described in CIT's filings with the
Securities and Exchange Commission, including its Transitional Report on Form
10-K for the period from October 1, 2002 to December 31, 2002. CIT is under no
obligation to (and expressly disclaims any such obligation to) update or alter
its forward-looking statements, whether as a result of new information, future
events or otherwise.
7
About CIT:
CIT Group Inc. (NYSE: CIT), a leading commercial and consumer finance
company, provides clients with financing and leasing products and advisory
services. Founded in 1908, CIT has nearly $50 billion in assets under management
and applies its financial resources, industry expertise and product knowledge to
serve the needs of clients across a wide variety of industries. CIT, a Fortune
500 company, holds leading positions in vendor financing, U.S. factoring,
equipment and transportation financing, Small Business Administration loans, and
asset-based and credit-secured lending. CIT, with its principal offices in New
York City and Livingston, New Jersey, has approximately 6,000 employees in
locations throughout North America, Europe, Latin and South America, and the
Pacific Rim. For more information, visit www.cit.com.
###
8
CIT GROUP INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED INCOME STATEMENTS
For the Quarters Ended March 31, 2003, December 31 and March 31, 2002
(dollars in millions, except per share data)
March 31, December 31, March 31,
2003 (1) 2002 (1) 2002 (1)
-------- ------------ -------------------------------------
CIT TCH Consolidated
Finance income $ 939.2 $ 971.7 $ 1,106.7 $ -- $ 1,106.7
Interest expense 346.7 340.0 348.3 -- 348.3
-------- -------- --------- ------- ---------
Net finance income 592.5 631.7 758.4 -- 758.4
Depreciation on operating lease equipment 278.8 277.3 310.2 -- 310.2
-------- -------- --------- ------- ---------
Net finance margin 313.7 354.4 448.2 -- 448.2
Provision for credit losses 103.0 133.4 195.0 -- 195.0
-------- -------- --------- ------- ---------
Net finance margin after provision for credit losses 210.7 221.0 253.2 -- 253.2
Other revenue(2) 235.5 257.1 232.1 -- 232.1
-------- -------- --------- ------- ---------
Operating margin 446.2 478.1 485.3 -- 485.3
-------- -------- --------- ------- ---------
Salaries and general operating expenses 233.6 242.1 226.9 7.3 234.2
Goodwill Impairment -- -- 4,512.7 -- 4,512.7
Interest expense -- TCH -- -- -- 305.0 305.0
-------- -------- --------- ------- ---------
Operating expenses 233.6 242.1 4,739.6 312.3 5,051.9
-------- -------- --------- ------- ---------
Income before provision for income taxes 212.6 236.0 (4,254.3) (312.3) (4,566.6)
(Provision) benefit for income taxes (82.9) (92.0) (98.4) 48.0 (50.4)
Minority interest in subsidiary trust holding
solely debentures of the Company, after tax (2.7) (2.7) (2.7) -- (2.7)
-------- -------- --------- ------- ---------
Net income $ 127.0 $ 141.3 $(4,355.4) $(264.3) $(4,619.7)
======== ======== ========= ======= =========
Earnings per share
Basic earnings per share $ 0.60 $ 0.67
Diluted earnings per share $ 0.60 $ 0.67
Number of shares --basic (thousands) 211,573 211,573
Number of shares --diluted (thousands) 211,899 211,826
(1) TCH was a wholly-owned subsidiary of a Tyco affiliate domiciled in Bermuda
and was the holding company for the acquisition of CIT by Tyco. Prior to the
completion of the IPO of CIT on July 8, 2002, the cumulative activity of TCH
(net deficit) was offset via a capital contribution from Tyco. The consolidated
financial statements of CIT were not impacted by TCH subsequent to June 30,
2002.
March 31, December 31, March 31,
(2) Other Revenue 2003 2002 2002
--------- ------------ ---------
Fees and other income $ 144.7 $ 169.2 $ 160.9
Factoring commissions 46.9 55.1 37.5
Gains on securitization 30.7 30.5 34.7
Gains on sales of leasing equipment 17.6 8.7 4.3
Losses on venture capital investments (4.4) (6.4) (5.3)
------- ------- -------
Total other revenue $ 235.5 $ 257.1 $ 232.1
======= ======= =======
Fees and other income include: servicing fees, structuring and advisory fees,
syndication fees and gains from other asset and receivable sales.
9
CIT GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions)
March 31, December 31,
2003 2002
----------- ------------
(unaudited)
ASSETS
Financing and leasing assets:
Finance receivables $ 28,654.6 $ 27,621.3
Reserve for credit losses (757.0) (760.8)
---------- ----------
Net finance receivables 27,897.6 26,860.5
Operating lease equipment, net 6,831.4 6,704.6
Finance receivables held for sale 1,273.0 1,213.4
Cash and cash equivalents 2,025.4 2,036.6
Goodwill 384.4 384.4
Other assets (1) 4,837.4 4,732.9
---------- ----------
Total Assets $ 43,249.2 $ 41,932.4
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Debt:
Commercial paper $ 4,490.5 $ 4,974.6
Variable-rate bank credit facilities 1,300.0 2,118.0
Variable-rate senior notes 6,609.2 4,906.9
Fixed-rate senior notes 20,152.1 19,681.8
---------- ----------
Total debt 32,551.8 31,681.3
Credit balances of factoring clients 2,437.9 2,270.0
Accrued liabilities and payables 3,006.1 2,853.2
---------- ----------
Total Liabilities 37,995.8 36,804.5
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust
holding solely debentures of the Company 256.8 257.2
Stockholders' Equity:
Common stock 2.1 2.1
Paid-in capital 10,677.0 10,676.2
Accumulated deficit (5,505.3) (5,606.9)
Accumulated other comprehensive loss (177.2) (200.7)
---------- ----------
Total Stockholders' Equity 4,996.6 4,870.7
---------- ----------
Total Liabilities and Stockholders' Equity $ 43,249.2 $ 41,932.4
========== ==========
(1) Other Assets primarily include the following at March 31, 2003: $1.4 billion
of securitization assets, $0.7 billion of accrued interest and receivables from
derivative counterparties, $0.8 billion of investments and receivables from
joint ventures and non-consolidated subsidiaries, $0.3 billion of deposits on
flight equipment, $0.3 billion of equity investments, $0.2 billion of
repossessed and off-lease equipment, $0.1 billion of prepaid expenses, and $0.1
billion of investments in aerospace securities. The remaining balance includes
furniture and fixtures, miscellaneous receivables and other assets.
10
CIT GROUP INC. AND SUBSIDIARIES
OWNED AND MANAGED ASSET COMPOSITION
(dollars in millions)
March 31, December 31, March 31,
2003 2002 2002
---------- ------------- ----------
Equipment Financing & Leasing Segment
Equipment Financing
Finance receivables (1) $ 6,237.4 $ 7,357.8 $ 8,999.5
Operating lease equipment, net 527.4 668.3 872.8
Finance receivables held for sale 163.4 119.1 132.0
--------- --------- ---------
Owned assets 6,928.2 8,145.2 10,004.3
Finance receivables securitized and managed by CIT 3,977.2 3,936.2 3,752.5
--------- --------- ---------
Managed assets 10,905.4 12,081.4 13,756.8
--------- --------- ---------
Capital Finance
Finance receivables 1,223.7 1,335.8 1,534.6
Operating lease equipment, net 4,973.0 4,719.9 3,950.3
--------- --------- ---------
Owned assets 6,196.7 6,055.7 5,484.9
--------- --------- ---------
Specialty Finance Segment
Commercial
Finance receivables (1) 7,201.5 5,958.1 6,288.6
Operating lease equipment, net 1,227.6 1,257.3 1,717.4
Finance receivables held for sale 899.6 764.3 513.2
--------- --------- ---------
Owned assets 9,328.7 7,979.7 8,519.2
Finance receivables securitized and managed by CIT 3,191.7 3,377.4 4,167.4
--------- --------- ---------
Managed assets 12,520.4 11,357.1 12,686.6
--------- --------- ---------
Consumer
Finance receivables--- home equity 1,391.3 962.7 1,553.4
Finance receivables--- other 995.8 1,044.4 864.9
Finance receivables held for sale 210.0 330.0 --
--------- --------- ---------
Owned assets 2,597.1 2,337.1 2,418.3
Home equity finance receivables securitized and
managed by CIT 2,358.6 2,213.6 1,619.9
Other finance receivables securitized and managed
by CIT 860.2 955.2 1,216.5
--------- --------- ---------
Managed assets 5,815.9 5,505.9 5,254.7
--------- --------- ---------
Commercial Finance Segment
Commercial Services
Finance receivables 4,726.1 4,392.5 756.1
Finance receivables securitized and managed by CIT -- -- 3,432.4
--------- --------- ---------
Managed assets 4,726.1 4,392.5 4,188.5
--------- --------- ---------
Business Credit
Finance receivables 3,956.6 3,649.1 3,680.6
--------- --------- ---------
Structured Finance Segment
Finance receivables 2,922.2 2,920.9 2,620.0
Operating lease equipment, net 103.4 59.1 63.5
Equity investments 334.3 335.4 352.2
--------- --------- ---------
Owned assets 3,359.9 3,315.4 3,035.7
--------- --------- ---------
Total
Finance receivables $28,654.6 $27,621.3 $26,297.7
Operating lease equipment, net 6,831.4 6,704.6 6,604.0
Finance receivables held for sale 1,273.0 1,213.4 645.2
Equity investments 334.3 335.4 352.2
--------- --------- ---------
Owned assets 37,093.3 35,874.7 33,899.1
Finance receivables securitized and managed by CIT 10,387.7 10,482.4 14,188.7
--------- --------- ---------
Managed assets $47,481.0 $46,357.1 $48,087.8
========= ========= =========
(1) During the quarter, certain owned finance receivables totaling $1,078.6
million at March 31, 2003 were transferred from Equipment Financing to Specialty
Finance - Commercial, principally representing small business loans and leases.
Prior period data has not been restated to conform to present period
presentation.
11
CIT GROUP INC. AND SUBSIDIARIES
CREDIT METRICS
(dollars in millions)
For the Quarters Ended
--------------------------------------------------------------------
March 31, 2003 December 31, 2002 March 31, 2002
$ % $ % $ %
------------------ -------------------- --------------------
Net Credit Losses - Owned as a Percentage
of Average Finance Receivables
Equipment Financing and Leasing(1) $ 39.9 2.07% $ 71.1 3.23% $ 61.1 2.26%
Specialty Finance - Commercial(1) 31.0 1.73% 23.2 1.55% 19.6 1.21%
Commercial Finance 16.6 0.80% 33.5 1.92% 20.2 1.36%
Structured Finance 13.8 1.90% 15.5 2.24% 0.1 0.01%
---------- ---------- ----------
Total Commercial 101.3 1.55% 143.3 2.33% 101.0 1.59%
Specialty Finance - Consumer 13.0 2.36% 11.2 2.24% 11.4 1.51%
---------- ---------- ----------
Total $ 114.3 1.61% $ 154.5 2.32% $ 112.4 1.58%
========== ========== ==========
March 31, 2003 December 31, 2002 March 31, 2002
$ % $ % $ %
------------------ -------------------- --------------------
Finance Receivables Past Due 60 days or more - Owned
as a Percentage of Finance Receivables
Equipment Financing and Leasing(1) $ 366.5 4.91% $ 444.8 5.12% $ 463.0 4.39%
Specialty Finance - Commercial(1) 264.7 3.68% 182.9 3.07% 287.3 4.55%
Commercial Finance 152.8 1.76% 172.3 2.14% 224.7 2.86%
Structured Finance 55.2 1.89% 67.6 2.31% 39.0 1.49%
---------- ---------- ----------
Total Commercial 839.2 3.19% 867.6 3.39% 1,014.0 3.71%
Specialty Finance - Consumer 132.0 5.53% 133.7 6.66% 144.1 5.96%
---------- ---------- ----------
Total $ 971.2 3.39% $ 1,001.3 3.63% $ 1,158.1 3.90%
========== ========== ==========
Non-performing Assets - Owned as a Percentage of
Finance Receivables(2)
Equipment Financing and Leasing(1) $ 425.4 5.70% $ 558.4 6.42% $ 472.3 4.48%
Specialty Finance - Commercial(1) 160.4 2.23% 98.2 1.65% 140.1 2.22%
Commercial Finance 128.0 1.47% 136.2 1.69% 138.5 1.76%
Structured Finance 143.4 4.91% 151.6 5.19% 81.8 3.12%
---------- ---------- ----------
Total Commercial 857.2 3.26% 944.4 3.69% 832.7 3.05%
Specialty Finance - Consumer 149.2 6.25% 141.4 7.04% 155.7 6.44%
---------- ---------- ----------
Total $ 1,006.4 3.51% $ 1,085.8 3.93% $ 988.4 3.32%
========== ========== ==========
Finance Receivables Past Due 60 days or more - Managed
as a Percentage of Managed Financial Assets(3)
Equipment Financing and Leasing(1) $ 540.7 4.66% $ 631.2 4.95% $ 778.5 5.40%
Specialty Finance - Commercial(1) 343.0 3.04% 265.1 2.62% 401.0 3.66%
Commercial Finance 152.8 1.76% 172.3 2.14% 224.7 2.86%
Structured Finance 55.2 1.89% 67.6 2.31% 39.0 1.49%
---------- ---------- ----------
Total Commercial 1,091.7 3.16% 1,136.2 3.36% 1,443.2 4.02%
Specialty Finance - Consumer 269.6 4.64% 259.4 4.71% 237.0 4.51%
---------- ---------- ----------
Total $ 1,361.3 3.38% $ 1,395.6 3.55% $ 1,680.2 4.09%
========== ========== ==========
Reserve for Credit Losses
Reserve for credit losses as a percentage
of finance receivables $ 757.0 2.64% $ 760.8 2.75% $ 554.9 2.11%
Reserve for credit losses as a percentage of
finance receivables past due 60 days or more 77.9% 76.0% 47.9%
(1) During the quarter, certain portfolios were tranferred from Equipment
Financing and Leasing to Specialty Finance - Commercial. Charge-offs for the
quarter relating to these portfolios totaled approximately $11 million. At March
31, 2003 approximately $77 million past due 60+ accounts (both owned and
managed) and $70 million non-performing accounts related to the transferred
portfolios, versus $79 million and $73 million at December 31, 2002,
respectively. Prior period balances have not been restated to conform to present
period presentation.
(2) Total non-performing assets reflect both commercial and consumer finance
receivables on non-accrual status and assets received in satisfaction of loans.
(3) Managed financial assets exclude operating leases and certain equity
investments.
12
CIT GROUP INC. AND SUBSIDIARIES
SELECTED DATA AND OWNED PORTFOLIO INFORMATION
(dollars in millions unless specified)
Selected Data For the Quarters Ended
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March 31, December 31, March 31,
2003 2002 2002
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Profitability
Net finance margin as percentage of AEA 3.63% 4.34% 4.98%
Net finance margin after provision as percentage of AEA 2.44% 2.70% 2.81%
Salaries & general operating expenses as percentage of AMA(1) 2.08% 2.18% 1.93%
Efficiency ratio 42.5% 39.6% 33.4%
Securitization Volume(2)
Equipment Financing $ 461.0 $ 310.6 $ 364.0
Specialty Finance - Commercial 409.3 590.6 673.2
Specialty Finance - Consumer 367.1 288.1 1,688.7
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Total $ 1,237.4 $ 1,189.3 $ 2,725.9
==========================================
Average Assets
Average Finance Receivables (AFR) $ 28,328.8 $ 26,586.6 $ 28,487.3
Average Earning Assets (AEA) 34,600.6 32,693.2 36,006.6
Average Managed Assets (AMA)(1) 44,967.8 44,361.8 46,896.5
Average Operating Leases (AOL) 6,712.6 6,605.0 6,544.7
Note: These averages are based on an ending four month average
March 31, December 31, March 31,
2003 2002 2002
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Capital & Leverage(3),(4)
Tangible stockholders' equity to managed assets 10.42% 10.44% 9.14%
Debt (net of overnight deposits) to tangible stockholders' equity(5) 6.29x 6.22x 7.30x
Note: The above data for all relevant periods shown reflects the activity for
CIT only and excludes the consolidating TCH expenses.
(1) "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 finance receivables previously securitized and still managed by CIT.
(2) Quarters ended December 31, 2002 and March 31, 2002 exclude trade
receivables securitization activity due to the short-term nature of the
receivables and facilities.
(3) Tangible stockholders' equity excludes goodwill.
(4) Tangible stockholders' equity (excludes the impact of accounting changes for
derivative financial instruments and unrealized gains) includes
Company-obligated mandatorily redeemable preferred securities of subsidiary
trust holding solely debentures of the Company ("Preferred Capital Securities").
(5) Total debt excludes, and stockholders' equity includes, Preferred Capital
Securities.
Owned Portfolio Information March 31, December 31, March 31,
2003 2002 2002
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Liquidating Portfolios:
Balance $1,282.2 $1,339.0 $1,978.2
Non-performing accounts $ 142.9 $ 160.9 $ 176.6
Past due 60+ days $ 149.6 $ 131.0 $ 164.7
Telecommunications(6):
Financing and leasing assets $ 678.7 $ 710.1 $ 710.9
Number of accounts 53 52 57
Largest customer account balance $ 33.4 $ 32.9 $ 34.0
Non-performing accounts $ 85.5 $ 120.2 $ 60.6
Number of accounts 9 10 8
Past due 60+ days $ 35.5 $ 37.3 $ 32.0
CLEC exposure $ 238.0 $ 262.3 $ 285.6
Equity and Venture Capital Investments:
Total investment balance $ 334.3 $ 335.4 $ 352.2
Direct investments $ 179.6 $ 188.8 $ 201.9
Number of companies 57 57 59
Private equity funds $ 154.7 $ 146.6 $ 150.3
Number of funds 52 52 52
Remaining fund commitments $ 153.7 $ 164.9 $ 205.1
Aerospace:
Financing and leasing assets
Commercial $4,179.7 $4,072.8 $3,613.3
Regional $ 309.1 $ 344.0 $ 281.2
Investment in aerospace assets (EETC's) $ 89.2 $ 95.5 $ 77.0
Number of planes:
Commercial 195 194 191
Regional 115 117 90
Remaining purchase commitment deliveries (through 2007) 75 79 90
Remaining purchase commitments (through 2007) ($ in billions) $ 3.6 $ 3.8 $ 4.1
(6) Telecommunication portfolio data consists of lending and leasing directly to
the telecommunication sector, and does not include lending and leasing for
telecom related equipment to non-telecom companies.
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CIT GROUP INC. AND SUBSIDIARIES
Commercial Aerospace Portfolio Data
(dollars in millions unless specified)
March 31, 2003 December 31, 2002
---------------------- ----------------------
Commercial Aerospace Portfolio:
By Region: Net Investment Number Net Investment Number
-------------- ------ -------------- ------
Europe $1,537.4 51 $1,506.5 51
North America (1) 1,110.1 78 1,042.2 75
Asia Pacific 886.5 36 853.6 35
Latin America 572.5 26 595.9 29
Africa / Middle East 73.2 4 74.6 4
-------- -------- -------- --------
Total $4,179.7 195 $4,072.8 194
======== ======== ======== ========
By Manufacturer: Net Investment Number Net Investment Number
-------------- ------ -------------- ------
Boeing $2,514.2 138 $2,388.1 135
Airbus 1,640.8 42 1,647.9 42
Other 24.7 15 36.8 17
-------- -------- -------- --------
Total $4,179.7 195 $4,072.8 194
======== ======== ======== ========
By Body Type (2): Net Investment Number Net Investment Number
-------------- ------ -------------- ------
Narrow body $2,909.8 144 $2,799.4 142
Intermediate 871.6 18 859.2 17
Wide body 373.6 18 377.4 18
Other 24.7 15 36.8 17
-------- -------- -------- --------
Total $4,179.7 195 $4,072.8 194
======== ======== ======== ========
Largest customer net investment $ 242.6 $ 193.0
Number of accounts 74 78
Weighted average age of fleet (years) 7 7
New Aircraft Delivery Order Book (dollars in billions) Amount Number Amount Number
-------- -------- -------- --------
For the Years Ending December 31,
2003 (Remaining 9 Months for March 2003) $ 0.7 17 $ 0.8 19
2004 0.8 17 1.0 22
2005 1.3 27 1.3 27
2006 0.7 13 0.6 10
2007 0.1 1 0.1 1
-------- -------- -------- --------
Total $ 3.6 75 $ 3.8 79
======== ======== ======== ========
The order amounts are based on current appraised values in 2002 base dollars and
exclude CIT's option to purchase additional planes. Contractual maturities,
sales and other dispositions, as well as depreciation expense, are expected to
largely offset the new deliveries. At March 31, 2003, 11 of the 2003 deliveries
and 2 of the 2004 deliveries were placed.
(1) Comprised of net investments in the U.S. and Canada of $902.0 million (72
aircraft) and $208.1 million (6 aircraft) at March 31, 2003 and $832.7 million
(69 aircraft) and $209.5 million (6 aircraft) at December 31, 2002.
(2) Narrow body are single aisle design and consist primarily of Boeing 737 and
757 series and Airbus A320 series aircraft. Intermediate body are smaller twin
aisle design and consist primarily of Boeing 767 series and Airbus A330 series
aircraft. Wide body are large twin aisle design and consist primarily of Boeing
747 and 777 series and McDonnell Douglas DC10 series aircraft.
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