Exhibit 99.1
[Logo] CIT
Media Contact: Kelley J. Gipson
Executive Vice President
Director of Marketing and
Corporate Communications
(973) 422-3235
Investor Contact: Valerie L. Gerard
Executive Vice President
Investor Relations
(973) 422-3284
CIT ANNOUNCES RESTATEMENT OF FINANCIAL RESULTS REFLECTING A
NON-CASH ADJUSTMENT ON SELECT DERIVATIVE TRANSACTIONS
NEW YORK, NY, December 13, 2005 -- CIT Group Inc. (NYSE: CIT), a leading
provider of commercial and consumer finance solutions, is restating its 2005
financial statements due to a technical interpretation of the derivative
accounting rules. The Company will file amended statements for the periods ended
March 31, 2005, June 30, 2005, and September 30, 2005. Prior period financial
reporting was not affected.
SFAS 133 Interpretation for Currency Interest Rate Swaps
During the fourth quarter of 2005, CIT learned of a different interpretation
under SFAS 133, Accounting for Derivative Instruments and Hedging Activities, as
amended. After reviewing its hedge accounting treatment for transactions used to
protect its business from changes in interest and currency exchange rates
related to its debt financing, CIT concluded that its compound derivatives did
not qualify for hedge accounting under SFAS 133, even though such swaps were
highly effective economic hedges of both the interest rate and currency risks
associated with foreign denominated debt.
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Restatement Impact
The change in accounting treatment for the affected swaps had the following
impact on quarterly diluted earnings per share:
Previously Reported Restated Change
Q1 2005 - $0.98 $1.06 $0.08 gain
Q2 2005 - $1.03 $1.16 $0.13 gain
Q3 2005 - $1.06 $1.02 $0.04 loss
During the fourth quarter, CIT terminated its compound derivatives and replaced
each of them with a pair of stand-alone swaps (a cross currency swap and an
interest rate swap) that achieve the same economics as the original derivatives
and qualify as hedges under SFAS 133.
The effect on CIT's diluted earnings per share for Q4 will be a loss of $0.06
per share, reflecting the mark-to-market on the interest rate swap contracts
through their dates of termination. In the aggregate for 2005, CIT will show a
net gain of $0.11 per share related to these derivative accounting changes.
CIT will be filing a Form 8-K with the SEC today covering the topic of this
press release.
Conference Call
The Company will hold a conference call and webcast at 11:00 am (EST) this
morning to discuss the restatement and answer related questions. Persons may
access the conference call by dialing 877-558-5219 for U.S. and Canadian callers
or 706-634-5438 for international callers, and reference "CIT Conference Call"
or at the following website: http://ir.cit.com. An audio replay of the call will
be available beginning shortly after the conclusion of the call until 11:59 pm
(EST) December 15, 2005, by dialing 800-642-1687 for U.S. and Canadian callers
or 706-645-9291 for international callers with the pass-code 3261487, or at the
following website: http://ir.cit.com.
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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 over $60 billion in assets under management and
possesses the financial resources, industry expertise and product knowledge to
serve the needs of clients across approximately 30 industries worldwide. CIT, a
Fortune 500 company and a component of the S&P 500 Index, holds leading
positions in vendor financing, factoring, equipment and transportation
financing, Small Business Administration loans, and asset-based lending. With
its Global Headquarters in New York City, CIT 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.
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