AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 8, 2003
REGISTRATION NO. 333-103966
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
AND POST-EFFECTIVE AMENDMENT NO. 1
UNDER THE SECURITIES ACT OF 1933
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CIT GROUP INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 65-1051192
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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1 CIT DRIVE
LIVINGSTON, NEW JERSEY 07039
(973) 740-5000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
ROBERT J. INGATO
EXECUTIVE VICE PRESIDENT AND
GENERAL COUNSEL
1 CIT DRIVE
LIVINGSTON, NEW JERSEY 07039
(973) 740-5664
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------------
COPIES TO:
ANDRE WEISS MEREDITH B. CROSS
SCHULTE ROTH & ZABEL LLP WILMER, CUTLER & PICKERING
919 THIRD AVENUE 2445 M STREET, N.W.
NEW YORK, NEW YORK 10022 WASHINGTON, D.C. 20037
(212) 756-2000 (202) 663-6000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
in light of market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [x]
================================================================================
CALCULATION OF REGISTRATION FEE
==============================================================================================================
PROPOSED PROPOSED
TITLE OF EACH CLASS OF MAXIMUM MAXIMUM
SECURITIES TO BE AMOUNT TO OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED BE REGISTERED PER UNIT PRICE REGISTRATION FEE
--------------------------------------------------------------------------------------------------------------
Senior/Senior
Subordinated Debt
Securities........... U.S.$17,083,787,000(1) 100% U.S.$17,083,787,000(2)(3) $1,382,078.37(4)
==============================================================================================================
(1) In computing the principal amount of debt securities we issue, we will use
the U.S. Dollar equivalent for debt securities denominated in a foreign
currency and we will use the offering price, rather than the higher stated
principal amount, for original issue discount debt securities.
(2) Estimated solely for the purpose of determining the registration fee.
(3) Pursuant to Rule 429 under the Securities Act of 1933, as amended, this
Registration Statement contains a combined prospectus that also relates to
Registration Statement No. 333-98743, which we previously filed on Form S-3
and which the SEC declared effective on September 13, 2002. We are carrying
forward $2,083,787,000 aggregate principal amount of debt securities from
Registration Statement No. 333-98743.
(4) This amount includes $191,708.40 previously paid in connection with the
$2,083,787,000 of securities being carried forward from the registrant's
prior Registration Statement No. 333-98743, as described in footnote 3
above, and $80.90 previously paid by the registrant upon the initial filing
of this Registration Statement No. 333-103966.
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PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT CONTAINS A COMBINED PROSPECTUS THAT ALSO RELATES TO
REGISTRATION STATEMENT NO. 333-98743, WHICH WE PREVIOUSLY FILED ON FORM S-3 AND
WHICH THE SEC DECLARED EFFECTIVE ON SEPTEMBER 13, 2002. THIS REGISTRATION
STATEMENT CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT
NO. 333-98743 AND SUCH POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE
CONCURRENTLY WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT AND IN
ACCORDANCE WITH SECTION 8(c) OF THE SECURITIES ACT OF 1933, AS AMENDED.
-------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 8, 2003
PROSPECTUS
[CIT LOGO]
CIT GROUP INC.
DEBT SECURITIES
-------------------
We may issue up to an aggregate of $17,083,787,000 of debt securities in one
or more series with the same or different terms.
When we offer specific debt securities, we will disclose the terms of those
debt securities in a prospectus supplement that accompanies this prospectus. The
prospectus supplement may also add, update and modify information contained or
incorporated by reference in this prospectus. BEFORE YOU MAKE YOUR INVESTMENT
DECISION, WE URGE YOU TO CAREFULLY READ THIS PROSPECTUS AND THE PROSPECTUS
SUPPLEMENT DESCRIBING THE SPECIFIC TERMS OF ANY OFFERING, TOGETHER WITH
ADDITIONAL INFORMATION DESCRIBED UNDER THE HEADING 'WHERE YOU CAN FIND MORE
INFORMATION.'
These debt securities may be either senior or senior subordinated in
priority of payment and will be direct unsecured obligations.
The terms of any debt securities offered to the public will depend on market
conditions at the time of sale. We reserve the sole right to accept or reject,
in whole or in part, any proposed purchase of the debt securities that we offer.
-------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
THE DATE OF THIS PROSPECTUS IS MAY , 2003
TABLE OF CONTENTS
PAGE
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CIT GROUP INC. ............................................. 3
RATIOS OF EARNINGS TO FIXED CHARGES......................... 9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS........... 10
USE OF PROCEEDS............................................. 10
DESCRIPTION OF DEBT SECURITIES.............................. 11
PLAN OF DISTRIBUTION........................................ 16
EXPERTS..................................................... 17
LEGAL OPINIONS.............................................. 17
WHERE YOU CAN FIND MORE INFORMATION......................... 17
2
CIT GROUP INC.
GENERAL
CIT is a leading global commercial and consumer finance company that was
founded in 1908. We are a source of financing and leasing capital for companies
in a wide variety of industries, including many of today's leading industries
and emerging businesses, offering vendor, equipment, commercial, factoring,
consumer, and structured financing capabilities.
On July 8, 2002, our former parent, Tyco International Ltd. ('Tyco'),
completed a sale of 100% of CIT's outstanding common stock in an initial public
offering. Immediately prior to the offering, a restructuring was effectuated
whereby our predecessor, CIT Group Inc., a Nevada corporation (which is referred
to in this prospectus as CIT Group Inc. (Nevada)), was merged with and into its
parent Tyco Capital Holding, Inc. ('TCH'), a Nevada corporation, and that
combined entity was further merged with and into CIT Group Inc. (Del), a
Delaware corporation. In connection with the reorganization, CIT Group Inc.
(Del) was renamed CIT Group Inc. As a result of the reorganization, CIT is the
successor to CIT Group Inc. (Nevada)'s business, operations, obligations and SEC
registration.
On June 1, 2001, The CIT Group, Inc., a predecessor of CIT, was acquired by
TCH, a wholly-owned subsidiary of Tyco, in a purchase business combination
recorded under the 'push-down' method of accounting, resulting in a new basis of
accounting for the 'successor' periods beginning June 2, 2001. Information
relating to all 'predecessor' periods prior to the acquisition is presented
using CIT's historical basis of accounting.
Following the acquisition by Tyco, we changed our fiscal year end from
December 31 to September 30 to conform to Tyco's. On November 5, 2002, our board
of directors approved returning to a calendar year end for financial reporting.
We have a broad array of 'franchise' businesses that focus on specific
industries, asset types and markets, which are balanced by client, industry and
geographic diversification. Managed assets were $46.4 billion, owned financing
and leasing assets were $35.9 billion and stockholders' equity was $4.9 billion
at December 31, 2002.
We provide a wide range of financing and leasing products to small, midsize
and larger companies across a wide variety of industries, including
manufacturing, retailing, transportation, aerospace, construction, technology,
communication and various service-related industries. The secured lending,
leasing and factoring products of our operations include direct loans and
leases, operating leases, leveraged and single investor leases, secured
revolving lines of credit and term loans, credit protection, accounts receivable
collection, import and export financing, debtor-in-possession and turnaround
financing, and acquisition and expansion financing. Consumer lending is
conducted in our Specialty Finance segment and consists primarily of home equity
lending to consumers originated largely through a network of brokers and
correspondents.
Transactions are generated through direct calling efforts with borrowers,
lessees, equipment end-users, vendors, manufacturers and distributors and
through referral sources and other intermediaries. In addition, our strategic
business units jointly structure certain transactions and refer transactions to
other CIT units to best meet our customers' overall financing needs. We also buy
and sell participations in and syndications of finance receivables and/or lines
of credit. From time to time, in the normal course of business, we purchase
finance receivables on a wholesale basis to supplement our originated finance
receivables and sell select finance receivables and equipment under operating
leases for risk and other balance sheet management purposes, or to improve
profitability.
We conduct our operations through strategic business units that market
products and services to satisfy the financing needs of specific customers,
industries, vendors/manufacturers, and markets. Our four business segments are
as follows:
Equipment Financing and Leasing
Specialty Finance
Commercial Finance
Structured Finance
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EQUIPMENT FINANCING AND LEASING SEGMENT
Equipment Financing and Leasing had total financing and leasing assets of
$14.2 billion at December 31, 2002, representing 39.6% of total financing and
leasing assets. Total Equipment Financing and Leasing managed assets were $18.1
billion or 39.1% of total managed assets. We conduct our Equipment Financing and
Leasing operations through two strategic business units:
Equipment Financing offers secured equipment financing and
leasing and focuses on the broad distribution of its
products through manufacturers, dealers/distributors,
intermediaries and direct calling efforts primarily in
manufacturing, construction, food services/stores,
transportation and other industries.
Capital Finance offers secured equipment financing and
leasing by directly marketing customized transactions of
commercial aircraft and rail cars and locomotives.
Equipment Financing and Capital Finance personnel have extensive expertise
in managing equipment over its full life cycle, including purchasing new
equipment, maintaining and repairing equipment, estimating residual values and
re-marketing via re-leasing or selling equipment. Equipment Financing's and
Capital Finance's equipment and industry expertise enables them to effectively
manage residual value risk. For example, Capital Finance can repossess
commercial aircraft, if necessary, obtain any required maintenance and repairs
for such aircraft, and recertify such aircraft with appropriate authorities. We
manage the equipment, the residual value, and the risk of equipment remaining
idle for extended periods of time and, where appropriate, we locate alternative
equipment users or purchasers.
EQUIPMENT FINANCING
Equipment Financing had total financing and leasing assets of $8.1 billion
at December 31, 2002, representing 22.7% of our total financing and leasing
assets. On a managed asset basis, Equipment Financing represented $12.1 billion
or 26.1% of total managed assets at December 31, 2002. Equipment Financing
offers secured equipment financing and leasing products, including loans,
leases, wholesale and retail financing for distributors and manufacturers, loans
guaranteed by the U.S. Small Business Administration, operating leases, sale and
leaseback arrangements, portfolio acquisitions, revolving lines of credit and
in-house syndication capabilities. In connection with our acquisition by Tyco,
in fiscal 2002 Equipment Financing ceased origination of, and placed in
liquidation status, the trucking and franchise finance portfolios. The
portfolios approximated $0.5 billion at December 31, 2002.
Equipment Financing is a diversified, middle-market, secured equipment
lender with a global presence and strong North American marketing coverage. At
December 31, 2002, its portfolio included significant financing and leasing
assets to customers in a number of different industries, with manufacturing
being the largest as a percentage of financing and leasing assets, followed by
construction and transportation, including business aircraft.
Products are originated through direct calling on customers and through
relationships with manufacturers, dealers, distributors and intermediaries that
have leading or significant marketing positions in their respective industries.
This provides Equipment Financing with efficient access to equipment end-users
in many industries across a variety of equipment types.
CAPITAL FINANCE
Capital Finance had financing and leasing assets of $6.1 billion at December
31, 2002, which represented 16.9% of our total financing and leasing assets and
13.1% of managed assets. Capital Finance specializes in providing customized
leasing and secured financing primarily to end-users of commercial aircraft and
railcars, including operating leases, single investor leases, equity portions of
leveraged leases, and sale and leaseback arrangements, as well as loans secured
by equipment. Typical customers are major domestic and international airlines,
North American railroad companies and middle-market to larger-sized companies.
New business is generated through direct calling efforts supplemented with
transactions introduced by intermediaries and other referral sources. Capital
Finance utilizes special purpose entities (SPE's) to record certain structured
leasing transactions, primarily aerospace leveraged leases. These SPE's are
consolidated in CIT's financial statements.
4
Capital Finance has provided financing to commercial airlines for over
thirty years, and the commercial aerospace portfolio includes most of the
leading U.S. and foreign commercial airlines. As of December 31, 2002, the
commercial aerospace financing and leasing asset balance was $4.1 billion,
consisting of 78 accounts and 194 aircraft with an average age of approximately
6.9 years, and all comply with Stage III noise regulations.
Capital Finance has developed strong direct relationships with most major
airlines and major aircraft and aircraft engine manufacturers. This provides
Capital Finance with access to technical information, which enhances customer
service, and provides opportunities to finance new business. As of December 31,
2002, commitments to purchase commercial aircraft from both Airbus Industrie and
The Boeing Company totaled 79 units through 2007 at an approximate value of
$3,796.0 million. Additionally, in some cases CIT has the flexibility to delay
or terminate certain positions. As of December 31, 2002, all delivered aircraft
have been placed in service. Total deliveries for calendar year 2003 are 19, of
which twelve have customers in place as of December 31, 2002.
Capital Finance has over 25 years of experience in financing the rail
industry, contributing to its knowledge of asset values, industry trends,
product structuring and customer needs. Capital Finance has a dedicated rail
equipment group, maintains relationships with several leading railcar
manufacturers and has a significant direct calling effort on railroads and rail
shippers in the United States. The Capital Finance rail portfolio includes
leases to all of the U.S. and Canadian Class I railroads (which are railroads
with annual revenues of at least $250 million) and numerous shippers. The
operating lease fleet includes primarily covered hopper cars used to ship grain
and agricultural products, plastic pellets and cement; gondola cars for coal,
steel coil and mill service; open hopper cars for coal and aggregates; center
beam flat cars for lumber; and boxcars for paper and auto parts. The owned
operating lease railcar fleet is relatively young, with approximately 80% (based
upon net investment) built in 1994 or later. The Capital Finance rail owned and
serviced fleet totals in excess of 47,000 railcars and approximately 500
locomotives.
SPECIALTY FINANCE SEGMENT
At December 31, 2002, Specialty Finance financing and leasing assets totaled
$10.3 billion, representing 28.8% of total financing and leasing assets.
Specialty Finance managed assets were $16.9 billion, representing 36.4% of total
managed assets. These assets include small ticket commercial financing and
leasing assets, vendor programs and consumer home equity loans. Also included in
the owned financing and leasing assets are liquidating portfolios, which include
manufactured housing, recreational vehicles, recreational marine and wholesale
inventory finance.
Specialty Finance forms relationships with industry-leading equipment
vendors, including manufacturers, dealers and distributors, to deliver
customized asset-based sales and financing solutions in a wide array of vendor
programs. These alliances allow our vendor partners to better utilize core
competencies, reduce capital needs and drive incremental sales volume. As a part
of these programs, we offer (i) credit financing to the manufacturer's customers
for the purchase or lease of the manufacturer's products, and (ii) enhanced
sales tools to manufacturers and vendors, such as asset management services,
efficient loan processing and real-time credit adjudication. Higher-level
partnership programs provide integration with the vendor's business planning
process and product offering systems to improve execution and reduce cycle
times. Specialty Finance has significant vendor programs in information
technology and telecommunications equipment and serves many other industries
through its global network.
These vendor alliances feature traditional vendor finance programs, joint
ventures, profit sharing and other transaction structures with large,
sales-oriented corporate vendor partners. In the case of joint ventures,
Specialty Finance and the vendor combine financing activities through a distinct
legal entity that is jointly owned. Generally, Specialty Finance accounts for
these arrangements on an equity basis, with profits and losses distributed
according to the joint venture agreement, and purchases qualified finance
receivables originated by the joint venture. Specialty Finance also utilizes
'virtual joint ventures,' whereby the assets are originated on Specialty
Finance's balance sheet, while profits and losses are shared with the vendor.
These types of strategic alliances are a key source of business for Specialty
Finance. New vendor alliance business is also generated through intermediaries
and other referral sources, as well as through direct end-user relationships.
5
The Specialty Finance small-ticket commercial loan business is engaged
mainly in the leasing of office products, computers, point-of-sale equipment and
other technology products in the United States and Canada. Products are
originated through direct calling on customers and through relationships with
manufacturers, dealers, distributors and other intermediaries.
Home equity products include both fixed and variable-rate closed-end loans
and variable-rate lines of credit. This unit primarily originates, purchases and
services loans secured by first or second liens on detached, single-family,
residential properties. Customers borrow for the purpose of consolidating debts,
refinancing an existing mortgage, funding home improvements, paying education
expenses and, to a lesser extent, purchasing a home, among other reasons.
Specialty Finance primarily originates loans through brokers and correspondents
with a high proportion of home equity applications processed electronically over
the internet via BrokerEdgeSM using proprietary systems. Through experienced
lending professionals and automation, Specialty Finance provides rapid
turnaround time from application to loan funding, which is critical to broker
relationships.
Specialty Finance sells individual loans and portfolios of loans to banks,
thrifts and other originators of consumer loans to maximize the value of its
origination network and to improve overall profitability. Contract servicing for
securitization trusts and other third parties is provided through a centralized
consumer Asset Service Center. Commercial assets are serviced via several
centers in the United States, Canada and internationally. Our Asset Service
Center centrally services and collects substantially all of our consumer
receivables, including loans originated or purchased by our Specialty Finance
segment, as well as loans originated or purchased and subsequently securitized
with servicing retained. The servicing portfolio also includes loans owned by
third parties that are serviced by our Specialty Finance segment for a fee on a
'contract' basis. These third-party portfolios totaled $2.2 billion at December
31, 2002.
COMMERCIAL FINANCE SEGMENT
At December 31, 2002, the financing and leasing assets of our Commercial
Finance Segment totaled $8.0 billion, representing 22.4% of total financing and
leasing assets and 17.3% of managed assets. We conduct our Commercial Finance
operations through two strategic business units, both of which focus on accounts
receivable and inventories as the primary source of security for their lending
transactions.
Commercial Services provides factoring and
receivable/collection management products and secured
financing to companies in apparel, textile, furniture, home
furnishings and other industries.
Business Credit provides secured financing, including term
and revolving loans based on asset values, as well as cash
flow and enterprise value structures to a full range of
borrowers from small to larger-sized companies.
Commercial Services
Commercial Services had total financing and leasing assets of $4.4 billion
at December 31, 2002, which represented 12.2% of our total financing and leasing
assets and 9.5% of managed assets. Commercial Services offers a full range of
domestic and international customized credit protection, lending and outsourcing
services that include working capital and term loans, factoring, receivable
management outsourcing, bulk purchases of accounts receivable, import and export
financing and letter of credit programs.
Financing is provided to clients through the purchase of accounts receivable
owed to clients by their customers, as well as by guaranteeing amounts due under
letters of credit issued to the clients' suppliers, which are collateralized by
accounts receivable and other assets. The purchase of accounts receivable is
traditionally known as 'factoring' and results in the payment by the client of a
factoring fee which is commensurate with the underlying degree of credit risk
and recourse, and which is generally a percentage of the factored receivables or
sales volume. When Commercial Services 'factors' (i.e., purchases) a customer
invoice from a client, it records the customer receivable as an asset and also
establishes a liability for the funds due to the client ('credit balances of
factoring clients'). Commercial Services also may advance funds to its clients
prior to collection of receivables, typically in an amount up to 80% of eligible
accounts receivable (as defined for that transaction), charging interest on such
advances (in addition to any factoring fees) and satisfying such advances from
receivables collections. The operating
6
systems of the clients and Commercial Services are integrated in order to
facilitate the factoring relationship.
Clients use Commercial Services' products and services for various purposes,
including improving cash flow, mitigating or reducing the risk of charge-offs,
increasing sales and improving management information. Further, with the
TotalSourceSM product, clients can outsource bookkeeping, collection and other
receivable processing activities. These services are attractive to industries
outside the typical factoring markets, providing growth opportunities for
Commercial Services.
Commercial Services generates business regionally from a variety of sources,
including direct calling efforts and referrals from existing clients and other
referral sources. Accounts receivable, operations and other administrative
functions are centralized.
Business Credit
Financing and leasing assets of Business Credit totaled $3.6 billion at
December 31, 2002 and represented 10.2% of our total financing and leasing
assets and 7.9% of managed assets. Business Credit offers loan structures
ranging from asset-based revolving and term loans secured by accounts
receivable, inventories and fixed assets to loans based on earnings
performance and enterprise valuations to mid through larger-sized companies.
Clients use such loans primarily for working capital, growth, acquisitions,
debtor-in-possession financing and debt restructurings. Business Credit sells
and purchases participation interests in such loans to and from other lenders.
Through its variable rate, senior revolving and term products, Business
Credit meets its customer financing needs that are unfulfilled by other sources
of senior debt. Business Credit primarily structures financings on a secured
basis and, through its Corporate Finance unit, extends loans based upon the
sustainability of a customer's operating cash flow and ongoing enterprise
valuations. Revolving and term loans are made on a variable interest-rate basis
based upon published indices such as LIBOR or the prime rate of interest.
Business is originated regionally via solicitation activities focused upon
various types of intermediaries and referral sources. Business Credit has
increased its focus upon acquisition financings to compliment its debt
restructuring activities. Business Credit maintains long term relationships with
selected banks, finance companies, and other lenders to both source and
diversify senior debt exposures.
STRUCTURED FINANCE SEGMENT
Structured Finance had financing and leasing assets of $3.3 billion,
comprising 9.2% of our total financing and leasing assets and 7.2% of managed
assets at December 31, 2002. Structured Finance operates internationally through
operations in the United States, Canada and Europe. Structured Finance provides
specialized investment banking services to the international corporate finance
and institutional finance markets by providing asset-based financing for large
ticket asset acquisitions and project financing and related advisory services to
equipment manufacturers, corporate clients, regional airlines, governments and
public sector agencies. Communications (including telecommunication and media),
transportation, and the power and utilities sectors are among the industries
that Structured Finance serves.
Structured Finance also serves as an origination conduit to its lending
partners by seeking out and creating investment opportunities. Structured
Finance has established relationships with insurance companies and institutional
investors and can arrange financing opportunities that meet asset class, yield,
duration and credit quality requirements. Accordingly, syndication capability
and fee generation are key characteristics of Structured Finance's business.
Structured Finance utilizes SPE's to record certain structured leasing
transactions, including leveraged leases. These SPE's are generally consolidated
in our financial statements.
The segment had direct and private fund venture capital equity investments
totaling $335.4 million at December 31, 2002. In 2001, we ceased making new
venture capital investments beyond existing commitments, which totaled
approximately $164.9 million at December 31, 2002. In December 2002, we retained
a private equity firm, consisting of former CIT employees, to manage the
existing portfolio.
7
COMPETITION
Our markets are highly competitive and are characterized by competitive
factors that vary based upon product and geographic region. Competitors include
captive and independent finance companies, commercial banks and thrift
institutions, industrial banks, leasing companies, manufacturers and vendors
with global reach. Substantial financial services operations with global reach
have been formed by bank holding, leasing, finance and insurance companies that
compete with us. On a local level, community banks and smaller independent
finance and mortgage companies are a competitive force. Some competitors have
substantial local market positions. Many of our competitors are large companies
that have substantial capital, technological and marketing resources. Some of
these competitors are larger than we are and may have access to capital at a
lower cost than we do, particularly following the recent disruption to our
funding base. Competition had been enhanced by a strong economy and growing
marketplace liquidity prior to 2001, although, during 2002 and 2001, the economy
has slowed and marketplace liquidity has tightened. The markets for most of our
products are characterized by a large number of competitors, although the number
of competitors has fallen in recent years as a consequence of continued
consolidation in the industry.
We compete primarily on the basis of pricing, terms and structure. From time
to time, our competitors seek to compete aggressively on the basis of these
factors and we may lose market share to the extent we are unwilling to match
competitor pricing and terms in order to maintain interest margins and/or credit
standards.
Other primary competitive factors include industry experience, client
service and relationships. In addition, demand for our products with respect to
certain industries will be affected by demand for such industry's services and
products and by industry regulations.
REGULATION
Our operations are subject, in certain instances, to supervision and
regulation by state, federal and various foreign governmental authorities and
may be subject to various laws and judicial and administrative decisions
imposing various requirements and restrictions, which, among other things,
(i) regulate credit granting activities, including establishing licensing
requirements, if any, in applicable jurisdictions, (ii) establish maximum
interest rates, finance charges and other charges, (iii) regulate customers'
insurance coverages, (iv) require disclosures to customers, (v) govern secured
transactions, (vi) set collection, foreclosure, repossession and claims handling
procedures and other trade practices, (vii) prohibit discrimination in the
extension of credit and administration of loans, (viii) regulate the use and
reporting of information related to a borrower's credit experience and other
data collection. In addition, (i) CIT Bank, a Utah industrial loan corporation
wholly owned by CIT, is subject to regulation and examination by the Federal
Deposit Insurance Corporation and the Utah Department of Financial Institutions,
(ii) CIT Small Business Lending Corporation, a Delaware corporation wholly owned
by CIT, is licensed by and subject to regulation and examination by the U.S.
Small Business Administration, (iii) The Equipment Insurance Company, a Vermont
corporation wholly owned by CIT, and Highlands Insurance Company Limited, a
Barbados company wholly owned by CIT, are each licensed to enter into insurance
contracts and are regulated by the Departments of Insurance in Vermont and
Barbados, respectively, (iv) various banking corporations wholly owned by CIT in
France, Italy, Belgium and Sweden, are each subject to regulation and
examination by banking regulators in its home country, and (v) various
broker-dealer entities wholly owned by CIT in Canada, the United Kingdom, and
the United States are each subject to regulation and examination by securities
regulators in its home country.
EMPLOYEES
CIT employed approximately 5,835 people at December 31, 2002, of which
approximately 4,405 were employed in the United States and 1,430 were outside
the United States.
FACILITIES
CIT conducts its operations in the United States, Canada, Europe, Latin
America, Australia and the Asia-Pacific region. CIT occupies approximately 2.5
million square feet of office space, substantially all of
8
which is leased. Such office space is suitable and adequate for our needs and we
utilize, or plan to utilize, substantially all of our leased office space. We
are currently in negotiations to purchase our Livingston facility during 2003 at
a price that will result in expense levels that are comparable to the current
lease expenses.
LEGAL PROCEEDINGS
Except as set forth in our filings with the SEC, we are a defendant in
various lawsuits arising in the ordinary course of our business. We aggressively
manage our litigation and evaluate appropriate responses to our lawsuits in
light of a number of factors, including the potential impact of the actions on
the conduct of our operations. In the opinion of management, none of the pending
matters is expected to have a material adverse effect on our financial
condition, results of operations or liquidity. However, there can be no
assurance that an adverse decision in one or more of such lawsuits will not
have a material adverse effect.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of CIT
for each of the periods indicated.
THREE MONTHS TWELVE MONTHS NINE MONTHS
ENDED ENDED ENDED YEARS ENDED
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
------------ ------------- ------------- ---------------------
2002 2002 2001 2000 1999 1998
---- ---- ---- ---- ---- ----
(SUCCESSOR) (COMBINED) (PREDECESSOR)
Ratios of Earnings to Fixed 1.67x (1) 1.30x 1.39x 1.45x 1.49x
Charges
We have computed the ratios of earnings to fixed charges in accordance with
requirements of the SEC's Regulation S-K. Earnings consist of income from
continuing operations before income taxes and fixed charges. Fixed charges
consist of interest on indebtedness, minority interest in a subsidiary trust
holding solely debentures of CIT and one-third of rent expense which is deemed
representative of an interest factor.
(1) Earnings were insufficient to cover fixed charges by $6,331.1 million for
the twelve months ended September 30, 2002. Earnings for the twelve months
ended September 30, 2002 included a non-cash goodwill impairment charge of
$6,511.7 million in accordance with SFAS No. 142, 'Goodwill and Other
Intangible Assets.' The ratio of earnings to fixed charges included fixed
charges of $1,471.8 million and a loss before provision for income taxes of
$6,331.1 million resulting in a total loss provision for income taxes and
fixed charges of $(4,859.3) million.
9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus and the documents
incorporated by reference are 'forward-looking statements' within the meaning of
the U.S. Private Securities Litigation Reform Act of 1995. All statements
contained herein that are not clearly historical in nature are forward-looking
and the words 'anticipate,' 'believe,' 'expect,' 'estimate' and similar
expressions are generally intended to identify forward-looking statements. Any
forward-looking statements contained herein, in press releases, written
statements or other documents filed with the Securities and Exchange Commission
(SEC) or in communications and discussions with investors and analysts in the
normal course of business through meetings, webcasts, phone calls and conference
calls, concerning our operations, economic performance and financial condition
are subject to known and unknown risks, uncertainties and contingencies.
Forward-looking statements are included, for example, in the discussions about:
our liquidity risk management,
our credit risk management,
our asset/liability risk management,
our capital, leverage and credit ratings,
our operational and legal risks,
our commitments to extend credit or purchase equipment, and
how we may be affected by legal proceedings.
All forward-looking statements involve risks and uncertainties, many of
which are beyond our control, which may cause actual results, performance or
achievements to differ materially from anticipated results, performance or
achievements. Also, forward-looking statements are based upon management's
estimates of fair values and of future costs, using currently available
information. Therefore, actual results may differ materially from those
expressed or implied in those statements. Factors that could cause such
differences include, but are not limited to:
risks of economic slowdown, downturn or recession,
industry cycles and trends,
risks inherent in changes in market interest rates and quality spreads,
funding opportunities and borrowing costs,
changes in funding markets, including commercial paper, term debt and the
asset-backed securitization markets,
uncertainties associated with risk management, including credit,
prepayment, asset/liability, interest rate and currency risks,
adequacy of reserves for credit losses,
risks associated with the value and recoverability of leased equipment and
lease residual values,
changes in laws or regulations governing our business and operations,
changes in competitive factors, and
future acquisitions and dispositions of businesses or asset portfolios.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of any debt securities
offered under this prospectus to provide additional working funds for us and our
subsidiaries. Generally, we use the proceeds of our short-term borrowings
primarily to originate and purchase receivables in the ordinary course of our
business. We have not yet determined the amounts that we may use in connection
with our business or that we may furnish to our subsidiaries. From time to time,
we may also use the proceeds to finance the bulk purchase of receivables and/or
the acquisition of other finance-related businesses.
10
DESCRIPTION OF DEBT SECURITIES
The debt securities offered by this prospectus will be unsecured obligations
of CIT and will be either senior debt or senior subordinated debt. Senior debt
will be issued under a senior debt indenture. Senior subordinated debt will be
issued under a senior subordinated debt indenture. The senior debt indenture and
the senior subordinated debt indenture are sometimes referred to in this
prospectus individually as an 'indenture' and collectively as the 'indentures.'
We have filed forms of the global senior indenture and subordinated indenture as
exhibits to the registration statement on Form S-3 (No. 333-103966) under the
Securities Act of 1933, of which this prospectus is a part. The terms of the
indentures are also governed by the applicable provisions of the Trust Indenture
Act of 1939.
The following briefly summarizes the material provisions of the indentures
and the debt securities, other than pricing and related terms disclosed in the
accompanying prospectus supplement. You should read the more detailed provisions
of the applicable indenture, including the defined terms, for provisions that
may be important to you. You should also read the particular terms of a series
of debt securities, which will be described in more detail in the applicable
prospectus supplement. Copies of the indentures may be obtained from CIT or the
applicable trustee. So that you may easily locate the more detailed provisions,
the numbers in parentheses below refer to sections in the applicable indenture
or, if no indenture is specified, to sections in each of the indentures.
Wherever particular sections or defined terms of the applicable indenture are
referred to, these sections or defined terms are incorporated into this
prospectus by reference and the statements in this prospectus are qualified by
that reference.
GENERAL
The indentures provide that any debt securities that we issue will be issued
in fully registered form. We may issue the debt securities in one or more
separate series of senior or senior subordinated securities. Debt securities in
a particular series may have different maturities or different purchase prices.
(See Section 2.01 of the indentures.)
The debt securities that we issue will constitute either 'superior
indebtedness' or 'senior subordinated indebtedness,' as those terms are defined
below. From time to time, we may issue senior debt securities or 'senior
securities,' in one or more separate series of debt securities. We will issue
each series of senior securities under separate indentures, each substantially
in the form of a global senior indenture filed with the SEC. We will enter into
each senior indenture with a banking institution organized under the laws of the
United States or one of the states thereof. We refer to this banking institution
as a 'senior trustee.'
From time to time, we may also issue senior subordinated debt securities as
one or more separate series of debt securities. We will issue each series of
senior subordinated securities under one or more separate indentures, each
substantially in the form of a senior subordinated global indenture filed with
the SEC. We will enter into each senior subordinated indenture with a banking
institution organized under the laws of the United States or one of the states
thereof. We refer to this banking institution as 'senior subordinated trustee.'
Limitations on Indebtedness. The terms of the senior indentures do not limit
the amount of debt securities or other unsecured superior indebtedness that we
may issue. The terms of the senior indentures also do not limit the amount of
subordinated debt, secured or unsecured, that we may issue. The terms of some of
the senior subordinated indentures may limit the amount of debt securities or
other unsecured senior subordinated indebtedness that we may issue or limit the
amount of junior subordinated indebtedness that we may issue. For a description
of these limitations, see 'Description of Debt Securities -- Restrictive
Provisions and Covenants' on pages 13-14. At December 31, 2002, there was no
senior subordinated indebtedness issued and outstanding. At December 31, 2002,
under the most restrictive provisions of the senior subordinated indentures, we
could issue up to approximately $4.5 billion of additional senior subordinated
indebtedness.
Original Issue Discount. Debt securities bearing no interest or a below
market interest rate when issued are known as original issue discount
securities. We will offer any original issue discount securities which we issue
at a discount, which may be substantial, below their stated principal amount.
You should
11
refer to the prospectus supplement for a description of federal income tax
consequences and other special considerations applicable to original issue
discount securities.
Particular Terms of Offered Debt Securities. You should refer to the
prospectus supplement for a description of the particular terms of any debt
securities that we offer for sale. The following are some of the terms of these
debt securities that we will describe in the prospectus supplement:
title, designation, total principal amount and authorized
denominations;
percentage of principal amount at which debt securities will
be issued;
maturity date or dates;
interest rate or rates (which may be fixed or variable) per
annum, the method of determining the interest rate or rates
and any original issue discount;
payment dates for interest and principal and the provisions
for accrual of interest;
provisions for any sinking, purchase or other comparable fund;
any redemption terms;
designation of the place where registered holders of debt
securities may be paid or may transfer or redeem debt
securities;
designation of any foreign currency, including composite
currencies, in which the debt securities may be issued or
paid and any terms under which a holder of debt securities
may elect to be paid in a different currency than the
currency of the debt securities;
any index that may be used to determine the amounts of
principal, interest or any other payment due on the debt
securities; and
designation of the debt securities as senior securities or
senior subordinated securities. (See Section 2.01 of the
indentures.)
Payment. Unless otherwise specified in the prospectus supplement, we will
make all payments due on debt securities, less any applicable withholding taxes,
at the office of CIT or its agent maintained for this purpose in New York, New
York. However, at our option, we may pay interest, less any applicable
withholding taxes, by mailing a check to the address of the person entitled to
the interest as their name and address appear on our register. (See
Section 2.04 of the indentures.)
Transfer of Debt Securities. A registered holder of debt securities or a
properly authorized attorney of the holder, may transfer these debt securities
at our office or our agent's office. The prospectus supplement will describe the
location of these offices. We will not charge the holder a fee for any transfer
or exchange of debt securities, but we may require the holder to pay a sum
sufficient to cover any tax or other governmental charge in connection with a
transfer or exchange. (See Section 2.06 of the indentures.)
Certain Defined Terms. 'Indebtedness' in the definition of the terms
'superior indebtedness,' 'senior subordinated indebtedness,' and 'junior
subordinated indebtedness' means all obligations which in accordance with
generally accepted accounting principles should be classified as liabilities on
a balance sheet and in any event includes all debt and other similar monetary
obligations, whether direct or guaranteed.
'Superior indebtedness' means all of our indebtedness that is not by its
terms subordinate or junior to any of our other indebtedness. The senior
securities will constitute superior indebtedness.
'Senior subordinated indebtedness' means all of our indebtedness that is
subordinate only to superior indebtedness. The senior subordinated securities
will constitute senior subordinated indebtedness.
'Junior subordinated indebtedness' means all indebtedness of CIT that is
subordinate to both superior indebtedness and senior subordinated indebtedness.
SENIOR SECURITIES
The senior securities will be direct, unsecured obligations of CIT. Senior
securities will constitute superior indebtedness issued with equal priority to
the other superior indebtedness. At December 31, 2002,
12
CIT Group Inc.'s consolidated unaudited balance sheet reflected approximately
$24.6 billion of outstanding superior indebtedness.
The senior securities will be senior to all senior subordinated
indebtedness, including the senior subordinated securities. At December 31,
2002, CIT Group Inc.'s consolidated balance sheet reflected no outstanding
senior subordinated indebtedness and no outstanding junior subordinated
indebtedness.
SENIOR SUBORDINATED SECURITIES
The senior subordinated securities will be direct, unsecured obligations of
CIT. CIT will pay principal, premium, if any and interest on the senior
subordinated securities only after the prior payment in full of all superior
indebtedness of CIT, including the senior securities.
In the event of any insolvency, bankruptcy or similar proceedings, the
holders of superior indebtedness will be paid in full before any payment is made
on the senior subordinated securities. An event of default under or acceleration
of superior indebtedness does not in itself trigger the payment subordination
provisions applicable to senior subordinated securities. However, if the senior
subordinated securities are declared due and payable before maturity due to a
default, the holders of the senior subordinated securities will be entitled to
payment only after superior indebtedness is paid in full.
Due to these subordination provisions, if we become insolvent, the holders
of superior indebtedness may recover a higher percentage of their investment
than the holders of the senior subordinated securities. We intend that any
senior subordinated securities will be in all respects equal in right of payment
with the other senior subordinated indebtedness, including CIT's outstanding
senior subordinated securities. We also intend that all senior subordinated
securities will be superior in right of payment to all junior subordinated
indebtedness and to all outstanding capital stock.
RESTRICTIVE PROVISIONS AND COVENANTS
Negative Pledge. Generally, the indentures do not limit the amount of other
securities that we or our subsidiaries may issue. But each indenture contains a
provision, the 'Negative Pledge,' that we will not pledge or otherwise subject
to any lien any of our property or assets to secure indebtedness for money
borrowed, incurred, issued, assumed or guaranteed by us, subject to certain
exceptions. (See Section 6.04 of the indentures.)
Under the terms of the Negative Pledge, we are permitted to create the
following liens:
liens in favor of any of our subsidiaries;
purchase money liens;
liens existing at the time of any acquisition that we may
make;
liens in favor of the United States, any state or
governmental agency or department to secure obligations
under contracts or statutes;
liens securing the performance of letters of credit, bids,
tenders, sales contracts, purchase agreements, repurchase
agreements, reverse repurchase agreements, bankers'
acceptances, leases, surety and performance bonds and other
similar obligations incurred in the ordinary course of
business;
liens upon any real property acquired or constructed by us
primarily for use in the conduct of our business;
arrangements providing for our leasing of assets, which we
have sold or transferred with the intention that we will
lease back these assets, if the lease obligations would not
be included as liabilities on our consolidated balance
sheet;
liens to secure non-recourse debt in connection with our
leveraged or single-investor or other lease transactions;
consensual liens created in our ordinary course of business
that secure indebtedness that would not be included in total
liabilities as shown on our consolidated balance sheet;
13
liens created by us in connection with any transaction that
we intend to be a sale of our property or assets;
liens on property or assets financed through tax-exempt
municipal obligations;
liens arising out of any extension, renewal or replacement,
in whole or in part, of any financing permitted under the
Negative Pledge, so long as the lien extends only to the
property or assets, with improvements, that originally
secured the lien; and
liens that secure certain other indebtedness which, in an
aggregate principal amount then outstanding, does not exceed
10% of our consolidated net worth.
(See Section 6.04 of the indentures for the provisions of the Negative Pledge.)
In addition, in the senior subordinated indentures, we have agreed not to
permit:
the aggregate amount of senior subordinated indebtedness
outstanding at any time to exceed 100% of the aggregate
amount of the par value of our capital stock plus our
consolidated surplus (including retained earnings); or
the aggregate amount of senior subordinated indebtedness and
junior subordinated indebtedness outstanding at any time to
exceed 150% of the aggregate amount of the par value of the
capital stock plus our consolidated surplus (including
retained earnings). Under the more restrictive of these
tests, as of December 31, 2002, we could issue up to
approximately $4.5 billion of additional senior subordinated
indebtedness.
(See senior subordinated indenture Section 6.05.)
Restrictions on Mergers and Asset Sales. Subject to the provisions of the
Negative Pledge, the indentures will not prevent us from consolidating or
merging with any other corporation or selling our assets as or substantially as,
an entirety. However, if we are not the surviving corporation in a merger, the
surviving corporation must expressly assume our obligations under the
indentures. Similarly, if we were to sell our assets as or substantially as, an
entirety to another party, the purchaser must also assume our obligations under
the indentures. (See Section 15.01 of the senior indenture, Section 16.01 of the
senior subordinated indenture.)
The holders of at least a majority in principal amount of the outstanding
debt securities of any series may waive compliance with the restrictions of the
Negative Pledge. This waiver of compliance will bind all of the holders of that
series of debt securities. (See Section 6.06 of the senior indenture,
Section 6.07 of the senior subordinated indenture.)
Other than these restrictions, the indentures contain no additional
provisions limiting our ability to enter into a highly leveraged transaction.
MODIFICATION OF INDENTURE
Each indenture contains provisions permitting us and the trustee to amend,
modify or supplement the indenture or any supplemental indenture as to any
series of debt securities. Generally, these changes require the consent of the
holders of at least 66 2/3% of the outstanding principal amount of each series
of debt securities affected by the change.
Unanimous consent of the holders of a series of debt securities is required
for any of the following changes:
extending the maturity of that series of debt security,
reducing the rate, extending the time of payment of interest
or reducing any other payment due under that series of debt
security; or
reducing the percentage of holders required to consent to
any amendment or modification for purposes of that series of
debt security.
The rights, duties or immunities of the trustee cannot be modified without
the consent of the trustee.
(See Section 14.02 of the indentures.)
14
COMPUTATIONS FOR OUTSTANDING DEBT SECURITIES
In computing whether the holders of the requisite principal amount of
outstanding debt securities have taken action under an Indenture:
for an original issue discount security, we will use the
amount of the principal that would be due and payable as of
that date, as if the maturity of the debt had been
accelerated due to a default; or
for a debt security denominated in a foreign currency or
currencies, we will use the U.S. dollar equivalent of the
outstanding principal amount as of that date, using the
exchange rate in effect on the date of original issuance of
the debt security.
(See Section 1.02 of the indentures.)
EVENTS OF DEFAULT
Each indenture defines an 'event of default' with respect to any series of
debt securities. An event of default under an indenture is any one of the
following events that occurs with respect to a series of debt securities:
nonpayment for thirty days of any interest when due;
nonpayment of any principal or premium, if any, when due;
nonpayment of any sinking fund installment when due;
failure, after thirty days' appropriate notice, to perform
any other covenant in the indenture (other than a covenant
included in the indenture solely for the benefit of another
series of debt securities);
certain events in bankruptcy, insolvency or reorganization;
nonpayment of interest on our indebtedness, including
guaranteed indebtedness (other than indebtedness that is
subordinate) or nonpayment of any principal on any of our
indebtedness, in an aggregate amount exceeding $25 million,
as a result of which such indebtedness shall have been
accelerated and such acceleration shall not have been
annulled or rescinded within thirty days after written
notice thereof; or
any other event of default included in any indenture or
supplemental indenture.
(See Section 7.01 of the indentures.)
The trustee may withhold notice of any default (except in the payment of
principal of, premium, if any or interest, if any, on any series of debt
securities) if the trustee considers that withholding notice is in the interests
of the holders of that series of debt securities. (See Section 11.03 of the
indentures.)
Generally, each indenture provides that upon an event of default, the
trustee or the holders of not less than 25% in principal amount of any series of
debt securities then outstanding may declare the principal of all debt
securities of that series to be due and payable. (See Section 7.02 of the
indentures.)
You should refer to the prospectus supplement for any original issue
discount securities for disclosure of the particular provisions relating to
acceleration of the maturity of indebtedness upon the occurrence of an event of
default.
Within 120 days after the close of each fiscal year, we are required to file
with each trustee a statement, signed by specified officers, stating whether or
not the specified officers have knowledge of any default and, if so, specifying
each default, the nature of the default and what action, if any, has been taken
to cure the default. (See Section 6.05 of the senior indenture, Section 6.06 of
the senior subordinated indenture.)
Except in cases of default and acceleration, the trustee is not under any
obligation to exercise any of its rights or powers under an indenture at the
request of holders of debt securities, unless these holders offer the trustee a
reasonable indemnity. (See Section 11.01 of the indentures). As long as the
trustee has this indemnity, the holders of a majority in principal amount of any
series of debt securities outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the
15
trustee under the indenture or of exercising any trust or power conferred upon
the trustee. (See Section 7.08 of the indentures.)
DEFEASANCE OF THE INDENTURE AND DEBT SECURITIES
We may, at any time, satisfy our obligations with respect to payments on any
series of debt securities by irrevocably depositing in trust with the trustee
cash or Government Obligations, as defined in the indenture or a combination
thereof sufficient to make payments on the debt securities when due. If we make
this deposit in a sufficient amount, properly verified, then we would discharge
all of our obligations with respect to that series of debt securities and the
indenture insofar as it relates to that series of debt securities, except as
otherwise provided in the indenture. In the event of this defeasance, holders of
that series of debt securities would be able to look only to the trust fund for
payment on that series of debt securities until the date of maturity or
redemption. Our ability to defease debt securities of any series using this
trust fund is subject to certain tax, legal and stock exchange requirements.
(See Sections 12.01, 12.02 and 12.03 of the indentures.)
INFORMATION CONCERNING THE TRUSTEES
We may periodically borrow funds from any of the trustees. We and our
subsidiaries may maintain deposit accounts and conduct other banking
transactions with any of the trustees. A trustee under a senior indenture or a
senior subordinated indenture may act as trustee under any of CIT's other
indentures.
PLAN OF DISTRIBUTION
We may sell the debt securities being offered hereby:
directly to purchasers;
through agents;
to dealers; or
through an underwriter or a group of underwriters.
We may directly solicit offers to purchase debt securities. We may also
solicit offers through our agents. Unless otherwise indicated in the prospectus
supplement, any agent will be acting on a best efforts basis for the period of
its appointment (ordinarily five business days or less). Under our agreements
with agents, we may indemnify agents against certain civil liabilities,
including liabilities under the Securities Act of 1933.
We may also sell debt securities through a dealer as principal. The dealer
may then resell the debt securities to the public at varying prices to be
determined by the dealer at the time of resale. Under our agreements with
dealers, we may indemnify dealers against certain civil liabilities, including
liabilities under the Securities Act.
We may also use one or more underwriters to sell debt securities. Under our
agreements with underwriters, we may indemnify underwriters against certain
liabilities, including liabilities under the Securities Act. The names of the
underwriters and the terms of the debt securities will be set forth in the
prospectus supplement. When reselling debt securities to the public, the
underwriters will deliver the prospectus supplement and this prospectus to
purchasers of debt securities, as required by applicable law.
The underwriters, dealers, and agents may be deemed to be underwriters under
the Securities Act. Any discounts, commissions, or concessions that they receive
from us or any profit they make on the resale of debt securities may be deemed
to be underwriting discounts and commissions under the Securities Act. We will
disclose in the prospectus supplement any person who may be deemed to be an
underwriter and any compensation that we have paid to any underwriter. We may
have various other commercial relationships with our underwriters, dealers, and
agents.
If disclosed in the prospectus supplement, we may authorize underwriters and
agents to solicit offers by certain institutions to purchase offered debt
securities from us at the public offering price set forth in the prospectus
supplement pursuant to contracts providing for payment and delivery on the date
stated in the prospectus supplement. Each contract will be for an amount not
less than, and unless we otherwise
16
agree the aggregate principal amount of offered debt securities sold pursuant to
contracts will be not less nor more than, the amounts stated in the prospectus
supplement. We may authorize underwriters and agents to enter into contracts
with institutions including commercial and savings banks, insurance companies,
pension funds, investment companies, educational and charitable institutions,
and other institutions, all subject to our approval. Contracts will not be
subject to any conditions except that any purchase of debt securities by an
institution pursuant to a contract must be permitted under applicable laws. We
will disclose in the prospectus supplement any commission that we pay to
underwriters and agents who sell debt securities pursuant to contracts.
Underwriters and agents will have no responsibility in respect of the delivery
or performance of contracts.
The place and time of delivery for the debt securities will be set forth in
the prospectus supplement.
EXPERTS
The consolidated balance sheets of CIT Group Inc. and its subsidiaries as of
December 31, 2002, September 30, 2002 and September 30, 2001 and the related
consolidated statements of income, stockholders' equity and cash flows for the
three months ended December 31, 2002, the year ended September 30, 2002, the
period from June 2, 2001 through September 30, 2001 and the period from January
1, 2001 through June 1, 2001, incorporated by reference herein and in the
registration statement of which this prospectus forms a part, have been so
incorporated by reference in reliance on the reports of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated statements of income, changes in shareholders' equity and
cash flows of The CIT Group, Inc. and subsidiaries for the year ended December
31, 2000, have been incorporated by reference herein and in the registration
statement of which this prospectus forms a part, in reliance on the report of
KPMG LLP, independent accountants, also incorporated by reference herein, and
upon the authority of KPMG LLP as experts in accounting and auditing.
LEGAL OPINIONS
The validity of the debt securities offered will be passed upon for us by
Schulte Roth & Zabel LLP.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a Registration Statement on Form S-3 to register
the debt securities being offered in this prospectus. This prospectus, which
forms part of the registration statement, does not contain all of the
information included in the registration statement. For further information
about us and the securities offered in this prospectus, you should refer to the
registration statement and its exhibits. You may read and copy any document that
CIT files at the SEC's Public Reference Rooms at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can also request copies of the documents, upon
payment of a duplicating fee, by writing the Public Reference Section of the
SEC. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. These SEC filings are also available to
the public from the SEC's web site at http://www.sec.gov. Certain of our
securities are listed on the New York Stock Exchange and reports and other
information concerning us can also be inspected at the offices of the New York
Stock Exchange at 20 Broad Street, New York, New York 10005. You can also obtain
more information about us by visiting our web site at http://www.cit.com.
The SEC allows us to 'incorporate by reference' the information we file with
the SEC and information our predecessors filed in the past with the SEC, which
means we can disclose important information to you by referring you to those
documents. The information included in the following documents is incorporated
by reference and is considered to be a part of this prospectus. The most recent
information that we file with the SEC automatically updates and supersedes older
information.
17
We are incorporating by reference into this prospectus the following
documents previously filed with the SEC:
1. Our Annual Report on Form 10-K for the fiscal year ended September 30,
2002.
2. Our Transition Report on Form 10-K for the transition period from October
1, 2002 to December 31, 2002.
3. Our Current Reports on Form 8-K filed January 23, 2003, January 24, 2003,
February 28, 2003, March 5, 2003, March 12, 2003, April 11, 2003,
April 22, 2003 and April 25, 2003.
Until we have sold all of the debt securities that we are offering for sale
under this prospectus, we also incorporate by reference all documents that we
will file in the future pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act.
We will provide without charge to each person who receives a prospectus,
including any beneficial owner, a copy of the information that has been
incorporated by reference in this prospectus. If you would like to obtain this
information from us, please direct your request, either in writing or by
telephone, to Glenn Votek, Executive Vice President and Treasurer, CIT Group
Inc., 1 CIT Drive, Livingston, New Jersey 07039, telephone (973) 740-5000.
You should rely only on the information provided in this prospectus and the
prospectus supplement, as well as the information incorporated by reference. CIT
has not authorized anyone to provide you with different information. CIT is not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus, the
prospectus supplement or any documents incorporated by reference is accurate as
of any date other than the date on the front of the applicable document.
18
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by CIT in connection
with the issuance and distribution of the securities being registered. All the
amounts shown are estimates, except for the registration fee.
SEC registration fee........................................ $1,382,078.37(1)
Printing and engraving expenses............................. 250,000.00
Legal fees and expenses..................................... 300,000.00
Accounting fees and expenses................................ 200,000.00
Fees and expenses of trustees and paying and authenticating
agents.................................................... 150,000.00
Rating agencies............................................. 1,000,000.00
Blue Sky fees and expenses.................................. 25,000.00
Miscellaneous expenses...................................... 25,000.00
-------------
Total................................................... $3,332,078.37
-------------
-------------
---------
(1) Pursuant to Rule 457(p) of the Securities Act of 1933, as amended, the
registrant is offsetting $191,708.40 of the registration fee due under this
Registration Statement against filing fees previously paid.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the 'DGCL') provides,
in summary, that directors and officers of Delaware corporations are entitled,
under certain circumstances, to be indemnified against all expenses and
liabilities (including attorney's fees) incurred by them as a result of suits
brought against them in their capacity as a director or officer, if they acted
in good faith and in a manner they reasonably believed to be in or not opposed
to our best interests, and, with respect to any criminal action or proceeding,
if they had no reasonable cause to believe their conduct was unlawful; provided
that no indemnification may be made against expenses in respect of any claim,
issue or matter as to which they shall have been adjudged to be liable to us,
unless and only to the extent that the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, they are fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper. Any such indemnification may be made by us only as authorized in each
specific case upon a determination by the stockholders, disinterested directors
or independent legal counsel that indemnification is proper because the
indemnitee has met the applicable standard of conduct.
Our certificate of incorporation and by-laws provide that we will indemnify
our directors and officers to the fullest extent permitted by law and that no
director shall be liable for monetary damages to us or our stockholders for any
breach of fiduciary duty, except to the extent provided by applicable law (i)
for any breach of the director's duty of loyalty to us or our stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL, or
(iv) for any transaction from which such director derived an improper personal
benefit.
In addition, we maintain liability insurance for our directors and officers.
We have entered into indemnification agreements with each of our directors
and officers pursuant to which we have agreed to indemnify such persons to the
fullest extent permitted by Delaware law, as the same may be amended from time
to time.
ITEM 16. EXHIBITS.
The exhibits to this Registration Statement are listed in the Exhibit Index
to this Registration Statement, which Exhibit Index is hereby incorporated by
reference.
II-1
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the 'Securities Act');
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the 'Calculation of
Registration Fee' table in the effective registration
statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purposes of determining any liability under the
Securities Act each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrants' annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant, pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes (1) to use its best efforts to
distribute prior to the opening of bids, to prospective bidders, underwriters
and dealers, a reasonable number of copies of a prospectus which at the time
meets the requirements of Section 10(a) of the Securities Act, and relating to
the securities offered at competitive bidding, as contained in the registration
statement, together with any supplements thereto, and (2) to file an amendment
to the registration statement reflecting the results of bidding, the terms of
the reoffering and related matters to the extent required by the applicable
form, not later than the first use, authorized by the issuer after the opening
of bids, of a prospectus relating to the securities offered at competitive
bidding, unless no further public offering of such securities by the issuer and
no reoffering of such securities by the purchasers is proposed to be made.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 8th day of May,
2003.
CIT GROUP INC.
By: /s/ JOSEPH M. LEONE
..................................
JOSEPH M. LEONE
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
II-3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and
appoints ALBERT R. GAMPER, JR., JOSEPH M. LEONE and ROBERT J. INGATO, and each
of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign this registration statement
(including all pre-effective and post-effective amendments thereto and all
registration statements filed pursuant to Rule 462(b) which incorporate this
registration statement by reference), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto such attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that such attorneys-in-fact and agents or any of them, or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on May 8, 2003
in the capacities indicated below.
By: /s/ ROBERT J. INGATO*
..................................
(ROBERT J. INGATO,
ATTORNEY-IN-FACT)
NAME TITLE
---- -----
/s/ ALBERT R. GAMPER, JR.* President, Chief Executive Officer, Chairman of the
...................................... Board and Director (Principal Executive Officer)
(ALBERT R. GAMPER, JR.)
/s/ JOSEPH M. LEONE Executive Vice President, Chief Financial Officer and
...................................... Director (Principal Financial and Accounting Officer)
(JOSEPH M. LEONE)
/s/ JOHN S. CHEN* Director
......................................
(JOHN S. CHEN)
/s/ WILLIAM A. FARLINGER* Director
......................................
(WILLIAM A. FARLINGER)
/s/ HON. THOMAS H. KEAN* Director
......................................
(HON. THOMAS H. KEAN)
/s/ EDWARD J. KELLY, III* Director
......................................
(EDWARD J. KELLY, III)
/s/ MARIANNE MILLER PARRS* Director
......................................
(MARIANNE MILLER PARRS)
/s/ PETER J. TOBIN* Director
......................................
(PETER J. TOBIN)
/s/ LOIS M. VAN DEUSEN* Director
......................................
(LOIS M. VAN DEUSEN)
II-4
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- ------------------------------------------------------------
1.1 Form of Underwriting Agreement (Incorporated by reference to
an Exhibit to Form S-3 filed by CIT on February 11, 1999).
1.2 Form of Selling Agency Agreement for Global Medium Term Note
Program (Incorporated by reference to an Exhibit to Form S-3
filed by CIT on February 16, 1993).
1.3 Form of Selling Agent Agreement for Retail Investor
'InterNotes' Program (Incorporated by reference to
Exhibit 1.1 to Form 8-K filed by CIT on November 5, 2002).
4.1 Proposed form of Debt Securities (Note) (Incorporated by
reference to an Exhibit to Form S-3 filed by CIT on
October 25, 1984).
4.2 Proposed form of Debt Securities (Debenture) (Incorporated
by reference to an Exhibit to Form S-3 filed by CIT on
October 25, 1984).
4.3 Proposed form of Debt Securities (Deep Discount Debenture)
(Incorporated by reference to an Exhibit to Form S-3 filed
by CIT on October 25, 1984).
4.4 Proposed form of Debt Securities (Zero Coupon Debenture)
(Incorporated by reference to an Exhibit to Form S-3 filed
by CIT on October 25, 1984).
4.5 Proposed form of Debt Securities (Extendible Note)
(Incorporated by reference to an Exhibit to Form S-3 filed
by CIT on July 24, 1989).
4.6 Proposed form of Debt Securities (Floating Rate Renewable
Note) (Incorporated by reference to an Exhibit to Form S-3
filed by CIT on July 24, 1989).
4.7 Proposed form of Debt Securities (Floating Rate Note)
(Incorporated by reference to an Exhibit to Form S-3 filed
by CIT on February 16, 1993).
4.8 Proposed form of Debt Securities (Medium-Term Senior Fixed
Rate Note) (Incorporated by reference to an Exhibit to Form
S-3 filed by CIT on February 23, 2001).
4.9 Proposed form of Debt Securities (Medium-Term Senior
Floating Rate Note) (Incorporated by reference to an Exhibit
to Form S-3 filed by CIT on February 23, 2001).
4.10 Proposed form of Debt Securities (Medium-Term Senior
Subordinated Fixed Rate Note) (Incorporated by reference to
an Exhibit to Form S-3 filed by CIT on February 23, 2001).
4.11 Proposed form of Debt Securities (Medium-Term Senior
Subordinated Floating Rate Note) (Incorporated by reference
to an Exhibit to Form S-3 filed by CIT on February 23, 2001).
4.12 Proposed form of Fixed Rate Note for Retail Investor
'InterNotes' Program (Filed herewith).
4.13 Proposed form of Floating Rate Note for Retail Investor
'InterNotes' Program (Filed herewith).
4.14 Form of Indenture dated as of August 26, 2002 by and among
CIT, Bank One Trust Company, N.A., as trustee, and Bank One,
NA, London Branch, as London Paying Agent and London
Calculation Agent, for the issuance of unsecured and
unsubordinated debt securities (Incorporated by reference to
Exhibit 4.12 to Form S-3 filed by CIT on August 26, 2002).
4.15 Form of Indenture dated as of September 24, 1998 by and
between CIT (formerly known as Tyco Capital Corporation and
Tyco Acquisition Corp. XX (NV) and successor to The CIT
Group, Inc.) and The Bank of New York, as trustee, for the
issuance of unsecured and senior subordinated debt
securities (Incorporated by reference to an Exhibit to Form
S-3 filed by CIT September 24, 1998).
4.16 First Supplemental Indenture dated as of June 1, 2001 among
CIT (formerly known as Tyco Capital Corporation and Tyco
Acquisition Corp. XX (NV) and successor to The CIT Group,
Inc.), CIT Holdings (NV) Inc. and The Bank of New York, as
trustee, for the issuance of unsecured and senior
subordinated debt securities (Incorporated by reference to
Exhibit 4.2f to Form S-3 filed by CIT on June 7, 2001).
4.17 Second Supplemental Indenture dated as of February 14, 2002
to an Indenture dated as of September 24, 1998, as
supplemented by the First Supplemental Indenture dated as of
June 1, 2001, by and between CIT Group Inc. (formerly known
as Tyco Capital Corporation and Tyco Acquisition Corp. XX
(NV) and successor to The CIT Group, Inc.) and The Bank of
New York, as trustee, for the issuance of unsecured senior
subordinated debt securities (Incorporated by reference to
Exhibit 4.3 to Form 8-K filed by CIT on February 22, 2002).
4.18 Third Supplemental Indenture dated as of July 2, 2002 to an
Indenture dated as of September 24, 1998, as supplemented by
the First Supplemental Indenture dated as of June 1, 2001
and the Second Supplemental Indenture dated as of
February 14, 2002, by and between CIT Group Inc. (formerly
known as Tyco Capital Corporation and Tyco Acquisition Corp.
XX (NV) and successor to The CIT Group, Inc.) and The Bank
of New York, as trustee, for the issuance of unsecured
senior subordinated debt securities (Incorporated by
reference to Exhibit 4.2 to Form 8-K filed by CIT on
July 10, 2002).
II-5
EXHIBIT NO. DESCRIPTION
----------- ------------------------------------------------------------
4.19 Certain instruments defining the rights of holders of CIT's
long-term debt, none of which authorize a total amount of
indebtedness in excess of 10% of the total amounts
outstanding of CIT and its subsidiaries on a consolidated
basis have not been filed as exhibits. CIT agrees to furnish
a copy of these agreements to the Commission upon request.
5.1 Opinion of Schulte Roth & Zabel LLP (Filed herewith).
12 Computation of Ratios of Earnings to Fixed Charges (Filed
previously).
23.1 Consent of PricewaterhouseCoopers LLP (Filed herewith).
23.2 Consent of KPMG LLP (Filed herewith).
23.3 Consent of Schulte Roth & Zabel LLP (Included in
Exhibit 5.1).
24.1 Powers of Attorney (Filed herewith) (Included on the
signature page of this Form S-3).
24.2 Board Resolutions (Filed previously).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The Bank of New York (Filed previously).
25.2 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Bank One Trust Company, NA (Filed
previously).
II-6