CIT Group Inc. Euro AFSA

Transcription

1 CIT Group Inc. Euro AFSA 1

2 Notices Forward Looking Statements Certain statements made in these presentations that are not historical facts may constitute "forward-looking" statements under the Private Securities Litigation Reform Act of 1995, including those that are signified by words such as "anticipate", "believe", "expect", "estimate", and similar expressions. These forward-looking statements reflect the current views of CIT and its management and are subject to risks, uncertainties, and changes in circumstances. CIT's actual results or performance may differ materially from those expressed in, or implied by, such forward-looking statements. Factors that could affect actual results and performance include, but are not limited to, potential changes in interest rates, competitive factors and general economic conditions, changes in funding markets, industry cycles and trends, uncertainties associated with risk management, risks associated with residual value of leased equipment, and other factors described in our Form 10-K for the year ended December 31, CIT does not undertake to update any forward-looking statements. Non-GAAP Financial Measures These presentations include certain non-gaap financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission. Any references to non-gaap financial measures are intended to provide additional information and insight into CIT's financial condition and operating results. 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. For a reconciliation of these non-gaap measures to GAAP, please refer to the appendix within this presentation or access the reconciliations through CIT's Investor Relations website at [email protected]. Data as of March 31, 2005 unless otherwise noted. 2

3 Corporate Profile Managed Assets $59 Billion Predominately a Secured Lender Diverse Portfolio 97 Year Operating History $8 Billion Market Capitalization Premium Brand Global Servicing Capabilities 3

4 Core Attributes INDUSTRY EXPERTISE Continued presence in core markets Specialized industry and collateral expertise Enduring customer relationships DISCIPLINED Prudent growth strategy Consistent underwriting standards Committed to enhancing returns DIVERSE Asset classes, products and geography Revenue sources Funding capabilities EXPERIENCED Proven performance through economic cycles Strong and balanced management team 4

5 Segment Overview Managed Assets - $59B Market Focus Specialty Finance: $26B s s Home Lending $7B Consumer Commercial Ed. Lending $4B $11 $15 Vendor programs, small-ticket commercial lending and leasing, SBA loans Home and education lending, and other loans to consumers, including loans retained by CIT Bank c Commercial Finance: $33B c c Commercial Services $7B Equipment Finance Capital Finance Business Credit $6B $9 $10 $13 Mid- to large-ticket asset-based lending, enterprise value lending and factoring Diversified, middle market equipment lending and leasing Commercial aircraft, rail and other large-ticket equipment leasing and lending, project finance and advisory services (billions) Segment data excludes $102mm of equity investments held in corporate. 5

6 Portfolio Growth and Mix Shift March 1995 March 2005 Equipment Finance 28% Capital Finance 32% 13% Specialty Consumer 12% 15% Managed Assets $16 billion Commercial Services Business Credit CAGR 13% Capital Finance Equipment Finance 17% Business Credit 11% 16% 12% Commercial Services 25% 20% Managed Assets $59 billion Specialty Commercial Specialty Consumer Segment data excludes $102mm of equity investments held in corporate. 6

7 Customers Served Consumer Small Businesses Middle Market Large Corporations Commercial Equipment Finance Commercial Services Capital Finance Business Credit Vendor Finance Specialty Small Mid-ticket Small Business Loans Home Lending Education Lending 7

8 Portfolio Diversification Geography Asset / Collateral Type Canada Southwest International Southeast 6% 11% 17% 14% 15% 18% Midwest *No other collateral type or industry served greater than 3% **Data as of December 31, 2004, proforma EDLG$ 4.4B 19% Northeast West Industries Served Auto Communication Construction Wholesale Consumer Other Services Other* 3% 2% 3% 4% 5% 6% Transportation 15% 6% Manufacturing Transportation - Corp. Air RE-Industrial 9% 14% 10% Construction Government Guarantee 12% 11% 2% 2% 3% 4% 9% Transportation Land Manufacturing Retail Other* 11% Commercial Air Home Lending Education Lending 14% 11% 20% 11% A/R and Inventory Revolvers 13% Transportation Com. Air Technology RE- Residential 8

9 International Presence Specialty Finance Businesses Centralized servicing center in Dublin, Ireland Integrated CitiCapital western european acquisition Signed new European vendors Commercial Finance Businesses Obtained UK bank license Opened Hong Kong office Placing majority of air deliveries internationally Partnered with building societies or banks Funding offerings Euro Australian commercial paper Bank facilities 9

10 Q1 Performance Update 2005 Q Q1* Comments Managed Assets ($ billions) Increased 17% Net Income ($ millions) Increased 28% Credit Losses (%) Improved 74 bps Efficiency Ratio (%) Progress from Q4 EPS ($) Increased 29% ROTE (%) Improved 230 bps *Q104 results exclude a $41.8mm gain on debt redemption 10

11 2005 Focus Growth Efficiency Capital Discipline 11

12 Growth Model Grow assets consistent with GDP 3-4% Organic Focus on sectors growing faster than GDP Increase market share 2-3% Target adjacent markets Acquisitions Focus on core businesses Maximize operational leverage 2-3% Achieves mid-teens risk-adjusted return requirements Total Managed Asset Growth 8-10% 12

13 2005 Growth Opportunities Growth Potential High Medium Low High Technology Finance Asset Based Lending SBA Lending & Leasing Rail Factoring Return Potential Medium Healthcare Education Lending International Communications/Media Home Lending Air Power Energy & Infrastructure Equipment Finance Low Venture Capital* Franchise Finance* Trucking* Manufactured Housing* Recreational Vehicle* Marine* *Businesses CIT exited 13

14 Growth: Acquisition Summary Seller Asset Type Assets ($mm) Closed Comments Flex Leasing Railcars 400 Q2 Lease rates improved 2003 GECC HSBC Factoring Factoring 450 1,000 Q3 Q4 Strong client retention achieved GATX Tech. Leasing 520 Q2 Strong volume 2004 CitiCapital Vendor Finance 800 Q3 Complete integration in Q EDLG SunTrust Education Lending Factoring 4, Q1 Q1 Integration proceeding Integration commencing 14

15 Education Lending Strategic Rationale Diversifies CIT s Portfolio Reduces sensitivity to commercial economic cycle Flow-based business with predictable asset/revenue/credit performance Liquid asset class affords additional funding flexibility Enhances Economic Value EDLG Receives Capital to grow business Systems and operating expertise Access to CIT brand Generates Attractive Long-term Risk-Adjusted Returns High growth sector within financial services Low risk assets requiring minimal capital Balanced mix of spread and non-spread revenue CIT Receives Attractive entry platform into education lending Relationships with key market players Seasoned management team Redeployed capital into a business with a favorable risk/return profile 15

16 Efficiency Ratio 42.3% 40.8% 39.0% Q4-04* Q Target *Excludes impact of manufactured housing and venture capital charges 16

17 Efficiency Initiatives Revenue Related Build non-spread revenue through service adjacencies Customer-centric alignment of industry verticals Focus on key growth segments Expense Related Specialty Finance Consolidating servicing platforms Commercial Finance Unified management and analyzing productivity opportunities Driving effective tax rate savings through efficient ownership of aerospace assets Corporate Instituted programs to cut travel and entertainment, telecom and compliance costs Reinvesting in business to drive asset / revenue growth 17

18 Capital Model Return on Equity 15% Dividend Payout 15% - 20% Capital Generation >10% Asset Growth (long-term target 8-10%) Organic growth in excess of GDP expansion Supplemented by opportunistic acquisitions 18

19 Capital Position Managed Assets ($B) Capital Allocation Commercial % Commercial Specialty Consumer Home Lending/Utah Bank Consumer Education Lending Commercial Services Business Credit Equipment Finance Capital Finance % 2% 10% 10% 10% 14% Required Tangible Equity / Managed Assets* 9% Actual Tangible Equity / Managed Assets 9.6% *Includes corporate and other unallocated items. 19

20 Capital Performance by Segment Performance versus 15% ROTE Target 2004 Actual 2005 Plan Commercial Exceed Exceed Commercial Specialty Consumer Home Lending Consumer Education Lending Commercial Services Business Credit Equipment Finance Capital Finance In-line NA Exceed Exceed Below Below Exceed Below Exceed Exceed Improving Improving Total CIT* Below In-line *Includes corporate and other unallocated items. 20

21 CIT Group Inc. Funding & Liquidity 21

22 Enhanced Funding Diversity CIT takes great care in ensuring depth and diversity of its funding sources We have dramatically expanded and diversified our funding composition December 31, 1998 December 31, 2004 US Cons. ABS 17% Int'l MTN's 1% US ABS CP 2% US MTN 53% Int'l Globals MTN's 11% Private Placements 1% US ABS CP 5% US MTN 25% US Cons. ABS 4% US CP 27% US Comm. ABS 5% Int'l ABS CP 5% US Retail 4% Intl CP 1% US CP 8% Globals 31% 22

23 Liquidity Risk Metrics 23% Commercial Paper / Total Debt 24% Short Term Debt / Total Debt 50% 49% 47% 15% 13% 11% 9% 36% 32% 24% Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Q Dec-99 Dec-01 Dec-02 Dec-03 Dec-04 Q Target cap of 15% Target cap of 45% Commercial Paper Bank Lines / Total Commercial Paper 149% 149% 154% 98% 109% 107% Alternate Liquidity* / Short Term Debt 117% 107% 89% 64% 68% 51% Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Q Target minimum of 100% Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Q Target minimum of 75% *Alternate Liquidity includes available bank facilities, asset backed conduit facilities and cash 23

24 2005 Funding Plan Commercial Paper $5 billion US program International C/P programs A$500 million and C$ million 100% plus backstop coverage Long Term Debt Approximately $10 billion in funding requirements Institutional markets Retail and structured notes Opportunistic international offerings Securitization Planned volume of $4 5 billion Public and private markets in the US and Canada Asset classes include equipment and student loans Continue to opportunistically review other asset classes 24

25 2005 Outlook Metric Managed Asset Growth 2005 Targets 16-18% Risk-adjusted Margin % Operating Efficiency Ratio 39% Credit Losses < 70 bps EPS Growth Rate 20% Return on Tangible Equity 16% 25

26 Appendix 26

27 Corporate History CIT went public and was listed on NYSE. The company had 600 employees and assets of $44.7 MM RCA acquired CIT 1984 Albert R. Gamper, Jr., named Chairman and CEO of CIT. Dai-Ichi Kangyo Bank acquired an additional 20% of CIT from Chemical Bank 1989 CIT launched a 20% IPO to acquire from DKB its option to purchase the 20% interest owned by Chase Manhattan. CIT again listed on the NYSE ( CIT ) CIT acquired Newcourt Credit July 2000 Tyco International acquired CIT July 2002 Jeff Peek named President & CEO October 2004 Jeff Peek named Chairman & CEO CIT founded as Commercial Credit and Investment Company by Henry Ittleson in St. Louis 1924 CIT Financial Corporation, company s industrial financing entity, was incorporated 1980 Manufacturers Hanover purchased CIT from RCA Dai-Ichi Kangyo Bank acquired 60% of CIT from Manufacturers Hanover 1997 Chemical Bank merged with Chase Manhattan. CIT ownership was 80% by DKB and 20% by Chase Manhattan 1999 Successful CIT secondary stock offering reduced DKB s stake to approximately 44%, with balance of shares held publicly CIT was added to the S&P 500 Index June 2001 CIT completed 100% initial public offering (NYSE: CIT) July 2004 CIT was added to the S&P 500 Index January

28 Board of Directors Board Member Member Since Independent Directors Board Committees Audit Comp Nom & Gov Jeffery M. Peek 2003 William A. Farlinger 2002 Thomas H. Kean 2002 Chair Edward J. Kelly, III* 2002 Peter J. Tobin 2002 Lead Chair William M. Freeman 2003 Marianne Miller Parrs 2003 John R. Ryan 2003 Chair Lois M. Van Deusen 2003 Gary Butler 2004 Timothy M. Ring 2005 *Edward J. Kelly, III has advised the company that he will not stand for re-election at the 2005 Annual Meeting of Stockholders. 28

29 Specialty Finance Commercial: Vendor Finance Relationships with Dell Computer, Avaya, Snap-on Tools and other Fortune 500 companies around the globe State-of-the-art transaction processing technology Scalable platform with significant operating leverage SBA Lending #1 Provider of government-backed small business loans Small Mid-ticket Financing Provide debt and lease financing on technology equipment, credit card terminals, office products, etc. Consumer: Home Lending Mortgage broker driven business Highly efficient origination and credit approval systems High credit quality and geographically diverse portfolio Education Lending 98% government guaranteed Fourth largest FFELP consolidation loan originator Preferred lender at almost 700 schools Other Consumer Utah Bank Small-ticket vendor finance Specialty Finance: $26B s s c Commercial Finance: $33B c c Total Managed Assets $59B Consumer Home Lending $7B Commercial Ed. Lending $4B $11 $ (billions) Segment data excludes $102mm of equity investments held in corporate. 29

30 Home Lending Managed Portfolio Demographics Dec-04 Outstandings ($B) $6.3 Targets Original Loan Size $94,500 Original Term 329 Max. 360 for 1st; 180 for 2nd's Fixed Rate 63% FICO Debt to income 38% 38% - 42% Loan to value 77% 75% - 80% % 1st Lien 91% 85% - 95% Employment 9 years 7-10 years Residence 9 years 6-10 years Annual Income $84,700 $85,000 - $100,000 30

31 Commercial Finance Commercial Services: Leading commercial services / factoring business in the U.S. Vital credit bridge between vendors and retailers Long-term client relationships years on average Superb track record of navigating retail credit cycles Business Credit: Asset based lender to multiple industries Leading provider of working capital to the middle market Strong debtor-in-possession (DIP), turn around and expansion financing capabilities Deal-oriented and collateral protected Significant fee generator Equipment Finance: Leading equipment lender with a premium brand name Industry leader in key markets: construction equipment, manufacturing and corporate aircraft Wide range of product offerings including direct financing programs with equipment manufacturers and dealers Capital Finance: Portfolio Composition: Aerospace $6B, Rail $3B and Power, Energy & Infrastructure $1B Four decades of experience Experts in managing and maximizing collateral values Strong relationships with deep market penetration Specialty Finance: $26B s s c Commercial Finance: $33B c c Total Managed Assets $59B Home Lending $XXB Commercial Services $7B Equipment Finance Capital Finance Ed. Lending $XXB Business Credit $6B $9 $10 $ (billions) Segment data excludes $102mm of equity investments held in corporate. 31

32 Commercial Aerospace Portfolio Statistics Portfolio Composition Category Grouping % Net Investment Aircraft Body type Narrow Intermediate Wide Other 76.3% 16.0% 6.7% 1.1% Operating Leases Leveraged Leases Loans $ millions 4, % 84.7% 6.5% 2.0% Number % 77.9% 5.8% 9.1% Manufacturer Geographic diversity Boeing Airbus Other Europe Asia Pacific North America Latin America Africa / Middle East 49.6% 49.3% 1.1% 41.5% 24.2% 21.5% 11.5% 1.3% Tax-Op. Leveraged Leases % 9 Capital Leases % 6 5, % 208 Remaining Order Book Year Amt ($B) Number Placed 4.3% 2.9% 100.0% Weighted average age Aircraft on the ground (w / LOI) Years Planes 7 1 (1) Top exposure Millions 285 Total $ Top US exposure* Millions 137 * As of December 31,

33 Non-GAAP Disclosure ($ in Millions) 3/31/ /31/2004 3/31/2004 Managed assets: Finance receivables Operating lease equipment, net Finance receivables held for sale Equity and venture capital investments (included in other assets) Total financing and leasing portfolio assets $ 41, , , ,078.7 $ 35, , , ,160.9 $ 32, , , ,021.6 Securitized assets 7, , ,067.0 Managed assets Earning assets: Total financing and leasing portfolio assets $ 58,795.3 $ 51,078.7 $ 53,470.6 $ 45,160.9 $ 50,088.6 $ 41,021.6 Credit balances of factoring clients (4,269.8) (3,847.3) (3,619.4) Earning assets Tangible stockholders' equity: Total equity $ 46,808.9 $ 6,318.0 $ 41,313.6 $ 6,055.1 $ 37,402.2 $ 5,492.7 Other comprehensive loss relating to derivative financial instruments (20.3) Unrealized (gain) loss on securitization investments (7.7) (8.5) (11.3) Goodwill and intangible assets (906.4) (596.5) (485.5) Tangible common equity 5, , ,098.8 Preferred capital securities Tangible equity $ 5,636.9 $ 5,731.0 $ 5,353.9 Non-GAAP financial measures disclosed by management are meant to provide additional information and insight relative to trends in the business 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. 33