NEW YORK--(BUSINESS WIRE)--CIT Group Inc. (NYSE: CIT), a leading provider of financing to small businesses and middle market companies, today filed its 2009 Form 10-K and reported a 2009 net loss attributable to common stockholders of $4 million, as a loss from operations was essentially offset by the combination of fresh start accounting adjustments (FSA) and reorganization items. Below is a summary of significant matters reported in the Form 10-K.

Reorganization

CIT emerged from bankruptcy on December 10, 2009. The prepackaged plan of reorganization resulted in:

• A $10.4 billion net reduction in debt obligations reflecting the cancellation of senior and subordinated unsecured debt obligations and issuance of new secured notes;
• The cancellation of all preferred stock obligations and prior common shareholder interests;
• The issuance of 200 million new common shares to eligible debt holders; and
• An improved liquidity and capital position achieved through debt reduction and the deferral of significant debt maturities for three years.

Reorganization-related items had a $10.3 billion pre-tax benefit to fourth quarter results. This benefit consisted of an $11.2 billion gain on debt extinguishment and related items, partially offset by an $855 million loss on the termination of certain transportation lease agreements (primarily related to the purchase of railcars previously subject to sale-leaseback arrangements) and $43 million of expenses and other net costs attributable to the plan of reorganization.

Fresh Start Accounting

In accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), the Company adopted fresh start accounting at December 31, 2009 and adjusted the carrying value of assets and liabilities to estimated fair values at or near the emergence date. Total assets were reduced by $8.0 billion (12.0%) to $60.0 billion and total liabilities were reduced by $2.0 billion (4%) to $51.6 billion. A net asset discount of $3.5 billion will be accreted into income over time. All equity of predecessor CIT was eliminated and the fair value of new common equity was determined to be $8.4 billion, or $41.99 per share. FSA resulted in a pre-tax charge of $6.1 billion in the fourth quarter.

Fourth Quarter 2009 Financial Results

Including FSA and reorganization items, the Company reported net income of $3.2 billion in the fourth quarter. Excluding those items, the Company reported a fourth quarter pre-tax loss of $1.0 billion due to low levels of net finance revenue, reflecting high borrowing costs, and high credit costs, particularly in Corporate Finance.

Total commercial net charge-offs for the fourth quarter were $385 million, 4.77% of average finance receivables, with over half in the print, media, gaming, energy, small business lending and commercial real estate sectors in Corporate Finance. Non-accrual loans for the commercial segments (before FSA) were $2.6 billion, representing 8.80% of finance receivables at December 31, 2009. The fourth quarter provision for credit losses was $835 million, which increased the allowance for loan losses to $1.8 billion prior to its elimination through FSA .

Total assets at December 31, 2009 were $60.0 billion, including finance and leasing assets of $46.1 billion. Total cash at year end was $9.8 billion, which included approximately $6.7 billion of corporate and operating cash, $1.7 billion of cash at CIT Bank, and $1.4 billion of restricted cash. CIT’s consolidated Tier 1 and Total Capital Ratios were 14.2 % at December 31, 2009.

Please refer to the Form 10-K filed with the Securities and Exchange Commission today for details on CIT’s 2009 financial performance, plan of reorganization and fresh start accounting.

Conference Call and Webcast

Chairman and Chief Executive Officer John A. Thain and Chief Financial Officer Joseph M. Leone will discuss these results on a conference call and audio webcast tomorrow, March 17, 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 webcast 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 p.m. (EDT) March 31, 2010, by dialing 888-286-8010 for U.S. and Canadian callers or 617-801-6888 for international callers with the access code 43359771, or at the following website: http://ir.cit.com.

Individuals interested in receiving future updates on CIT via e-mail can register at http://newsalerts.cit.com.

About CIT

CIT (NYSE: CIT) is a bank holding company with more than $45 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual, and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, factoring, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. 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 is delayed in completing its management changes, the risk that CIT is delayed in completing its transition to a bank-centric business model 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.