PROSPECTUS SUPPLEMENT
(To Prospectus dated October 28, 2004)
14,000,000 SHARES
[CIT LOGO]
6.350% NON-CUMULATIVE PREFERRED STOCK, SERIES A
-------------------
CIT Group Inc. is offering 14,000,000 shares of its 6.350% Non-Cumulative
Preferred Stock, Series A, $25 liquidation preference per share (the 'series A
preferred shares').
Holders of the series A preferred shares will be entitled to receive dividend
payments only when, as and if declared by our Board of Directors or a duly
authorized committee of the Board. Any such dividends will be payable on the
series A preferred shares offered hereby on a non-cumulative basis, quarterly in
arrears on the 15th day of March, June, September and December of each year
(each, a 'dividend payment date'), commencing on September 15, 2005, at an
annual rate of 6.350%.
Dividends on the series A preferred shares are not cumulative. Accordingly,
in the event dividends are not declared on the series A preferred shares for
payment on any dividend payment date, then no dividends will accrue or be
payable for that dividend period. If we have not declared a dividend before the
dividend payment date for any dividend period, we will have no obligation to pay
dividends for that dividend period, whether or not dividends on the series A
preferred shares are declared for any future dividend period.
The Certificate of Designations for the series A preferred shares prohibits
the declaration of dividends on the series A preferred shares if we fail to meet
specified capital and fixed charge coverage levels. See 'Description of the
Series A Preferred Shares -- Restrictions on Declaration and Payment of
Dividends.'
So long as any series A preferred shares remain outstanding, no dividend
shall be paid or declared on our common stock or any of our other securities
ranking junior to the series A preferred shares (other than a dividend payable
solely in common stock or junior stock), unless the full dividends for the
latest completed dividend period on all outstanding series A preferred shares
and any other parity stock, including the series B preferred stock (as defined
herein), have been declared and paid or provided for.
The series A preferred shares do not have any maturity date, and we are not
required to redeem the series A preferred shares. Accordingly, the series A
preferred shares will remain outstanding indefinitely, unless and until we
decide to redeem them.
The series A preferred shares are not redeemable prior to September 15, 2010.
On and after that date, the series A preferred shares will be redeemable at any
time, at our option, in whole or in part, at a redemption price equal to $25 per
series A preferred share, plus declared and unpaid dividends, without the
accumulation of any undeclared dividends.
The series A preferred shares will not have voting rights, except as set
forth under 'Description of the Series A Preferred Shares -- Voting Rights.'
Concurrently with this offering of the series A preferred shares, we are
offering shares of our Non-Cumulative Preferred Stock, Series B, par value $0.01
and liquidation preference $100 per share, which we refer to in this prospectus
supplement as the 'series B preferred shares.' The series B preferred shares
will be offered pursuant to a separate prospectus supplement. Neither offering
is contingent upon the other.
SEE 'RISK FACTORS' BEGINNING ON PAGE S-12 OF THIS PROSPECTUS SUPPLEMENT TO
READ ABOUT IMPORTANT FACTORS YOU SHOULD CONSIDER BEFORE BUYING THE SERIES A
PREFERRED SHARES.
-------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PER SERIES A
PREFERRED SHARE TOTAL
---------------- ------------
Initial offering price (1).................................. $25.0000 $350,000,000
Underwriting discount....................................... $ 0.7875 $ 11,025,000
Proceeds, before expenses, to CIT Group Inc................. $24.2125 $338,975,000
---------
(1) The initial offering price does not include accrued
dividends, if any, that may be declared. Dividends, if
declared, will accrue from the date of original issuance,
which is expected to be July 29, 2005.
The underwriting discount will be $0.50 per series A preferred share offered
hereby with respect to any series A preferred shares sold in an aggregate
liquidation preference of $1,000,000 or more to a single purchaser, which
decreases the total underwriting discount and increases the total proceeds to
CIT Group Inc. by $2,760,000.
We will apply for listing of the series A preferred shares on the New York
Stock Exchange under the symbol 'CIT PrA.' Trading of the series A preferred
shares on the New York Stock Exchange is expected to commence within 30 days
after initial delivery.
The underwriters expect to deliver the series A preferred shares, in
book-entry form only, through the facilities of The Depository Trust Company,
against payment on or about July 29, 2005.
JOINT LEAD MANAGERS
GOLDMAN, SACHS & CO. LEHMAN BROTHERS MERRILL LYNCH & CO.
-------------------------------------------------------------------------
CITIGROUP JPMORGAN WACHOVIA SECURITIES
-------------------------------------------------------------------------
BEAR, STEARNS & CO. INC. BNP PARIBAS HSBC
The date of this Prospectus Supplement is July 26, 2005.
TABLE OF CONTENTS
PAGE
----
About this Prospectus Supplement............................ S-3
Where You Can Find More Information......................... S-4
Summary..................................................... S-5
Risk Factors................................................ S-12
Use of Proceeds............................................. S-15
Capitalization.............................................. S-16
Description of the Series A Preferred Shares................ S-17
Certain U.S. Federal Income Tax Considerations.............. S-26
Underwriting................................................ S-31
Legal Matters............................................... S-33
Experts..................................................... S-33
PROSPECTUS
About this Prospectus....................................... 3
Where You Can Find More Information......................... 3
Forward-Looking Statements.................................. 4
Prospectus Summary.......................................... 5
Use of Proceeds............................................. 6
Description of Debt Securities.............................. 7
Description of Capital Stock................................ 16
Description of Depositary Shares............................ 16
Description of Warrants..................................... 19
Description of Stock Purchase Contracts and Stock Purchase
Units..................................................... 21
Plan of Distribution........................................ 21
Legal Matters............................................... 23
Experts..................................................... 23
-------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. NEITHER
WE NOR THE UNDERWRITERS HAVE AUTHORIZED ANYONE TO PROVIDE YOU WITH ADDITIONAL OR
DIFFERENT INFORMATION. IF ANYONE PROVIDED YOU WITH ADDITIONAL OR DIFFERENT
INFORMATION, YOU SHOULD NOT RELY ON IT. NEITHER WE NOR THE UNDERWRITERS ARE
MAKING AN OFFER TO SELL THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR
SALE IS NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION CONTAINED IN THIS
PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND THE DOCUMENTS
INCORPORATED BY REFERENCE, IS ACCURATE ONLY AS OF THEIR RESPECTIVE DATES. CIT'S
BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE
CHANGED SINCE THOSE DATES.
-------------------
S-2
ABOUT THIS PROSPECTUS SUPPLEMENT
You should read this prospectus supplement along with the accompanying
prospectus carefully before you invest in the series A preferred shares. Both
documents contain important information you should consider before making your
investment decision. This prospectus supplement and the accompanying prospectus
contain the terms of this offering of series A preferred shares. The
accompanying prospectus contains information about our securities generally,
some of which does not apply to the series A preferred shares covered by this
prospectus supplement. This prospectus supplement may add, update or change
information in the accompanying prospectus. If the information in this
prospectus supplement is inconsistent with any information in the accompanying
prospectus, the information in this prospectus supplement will apply and will
supersede the inconsistent information in the accompanying prospectus.
Except as the context otherwise requires, or as otherwise specified or used
in this prospectus supplement or the accompanying prospectus, the terms 'we,'
'our,' 'us,' 'the company,' 'CIT,' 'CIT Group' and 'CIT Group Inc.' refer to CIT
Group Inc. and its consolidated subsidiaries. References in this prospectus
supplement to 'U.S. dollars' or 'U.S. $' or '$' are to the currency of the
United States of America.
S-3
WHERE YOU CAN FIND MORE INFORMATION
CIT Group Inc. files annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange Commission, or the SEC.
Our SEC filings are available to the public over the Internet at the SEC's Web
site at http://www.sec.gov. You may also read and copy any document we file at
the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Such information may also be inspected at The New York Stock
Exchange, 20 Broad Street, New York, New York 10005. You can also find
information about us by visiting our Web site at www.cit.com. We have included
our Web site address as an inactive textual reference only. Information on our
Web site is not incorporated by reference into and does not form a part of this
prospectus supplement or the accompanying prospectus.
We are incorporating by reference into this prospectus supplement and the
accompanying prospectus the information that CIT Group Inc. files with the SEC,
which means that we can disclose important information to you by referring you
to those documents that have been filed with the SEC. The information
incorporated by reference is considered to be part of this this prospectus
supplement and the accompanying prospectus, and information that we file later
with the SEC will automatically update and supersede the previously filed
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of
the Exchange Act, other than any portions of the respective filings that were
furnished, under applicable SEC rules, rather than filed, until the completion
of this offering.
our Annual Report on Form 10-K for the year ended December 31, 2004, as
amended;
our Definitive Proxy Statement filed with the SEC on April 6, 2005;
our Quarterly Report on Form 10-Q for the quarterly period ended March 31,
2005; and
our Current Reports on Form 8-K filed with the SEC on January 3, 2005,
January 6, 2005, January 7, 2005, January 18, 2005, January 19, 2005,
February 24, 2005, March 2, 2005, March 30, 2005, April 20, 2005, July 6,
2005 and July 20, 2005 (including the information set forth in Exhibit
99.1 of such Current Report, which information is hereby expressly
incorporated by reference in this prospectus supplement and the
accompanying prospectus and considered 'filed' under the Securities
Exchange Act of 1934, or the Exchange Act, pursuant to General
Instruction B.2 of Form 8-K).
You may request a copy of these filings at no cost by writing or telephoning
us at the following address or phone number:
Glenn Votek
Executive Vice President and Treasurer
CIT Group Inc.
1 CIT Drive
Livingston, New Jersey 07039
(973) 740-5000
S-4
SUMMARY
This summary contains basic information about us and this offering. Because
it is a summary, it does not contain all of the information that you should
consider before investing in the series A preferred shares. You should read this
entire prospectus supplement carefully, including the section entitled 'Risk
Factors,' our financial statements and the notes thereto incorporated by
reference into this prospectus supplement, and the accompanying prospectus,
before making an investment decision.
CIT GROUP INC.
CIT Group Inc., a Delaware corporation, is a global commercial and consumer
finance company that was founded in 1908. CIT provides financing and leasing
capital for consumers and companies in a wide variety of industries, offering
vendor, equipment, commercial, factoring, home lending, educational lending and
structured financing products. CIT operates primarily in North America, with
locations in Europe, Latin America, Australia and the Asia-Pacific region.
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. Our secured lending,
leasing and factoring products 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 consists primarily of first mortgage
lending to consumers, originated largely through a network of brokers and
correspondents, and education lending products, principally backed by the U.S.
government.
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 work together in referring 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 (commonly called bulk portfolio purchases) to
supplement our origination volume and sell certain finance receivables and
equipment under operating leases to reduce concentration risk, for other balance
sheet management purposes, or to improve profitability.
-------------------
Our principal executive offices are located at 1211 Avenue of the Americas,
New York, New York 10036. Our telephone number is (212) 536-1211.
S-5
THE OFFERING
Issuer.................................... CIT Group Inc.
Securities Offered........................ 14,000,000 shares of 6.350% Non-Cumulative Preferred Stock,
Series A, $0.01 par value per share, with a liquidation
preference of $25 per share, of CIT Group Inc.
Dividends................................. Holders of series A preferred shares will be entitled to
receive dividends, when, as and if declared by our Board of
Directors or a duly authorized committee of the Board, in
their sole discretion out of funds legally available for the
payment of dividends, subject to restrictions set forth
under the Delaware General Corporation Law and in this
prospectus supplement. These dividends, if declared, will be
payable with respect to each dividend period, on the
liquidation preference amount of $25 per share at an annual
rate of 6.350%. Any such dividends will be distributed to
holders of the series A preferred shares in the manner
described under 'Description of the Series A Preferred
Shares -- Dividends.'
A dividend period is the period from and including a
dividend payment date to but excluding the next dividend
payment date (whether or not dividends have been paid on the
prior dividend payment date), except that the initial
dividend period will commence on and include the original
issue date of the series A preferred shares and will end on
and exclude the September 15, 2005 dividend payment date.
Dividends will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
Dividends on the series A preferred shares are not
cumulative. Accordingly, in the event dividends are not
declared on the series A preferred shares for payment on any
dividend payment date, then no dividends will accrue or be
payable for that dividend period. If our Board of Directors
or a duly authorized committee of the Board has not declared
a dividend before the dividend payment date for any dividend
period, we will have no obligation to pay dividends for that
dividend period, whether or not dividends on the series A
preferred shares are declared for any future dividend
period.
So long as any series A preferred shares remain outstanding
for any dividend period, unless the full dividends for the
most recent dividend payment date on all outstanding series
A preferred shares and parity stock have been paid or
declared and a sum sufficient for the payment thereof has
been set aside for future payment:
no dividend shall be declared or paid on our common stock
or any other shares of our junior stock (other than a
dividend payable solely in the form of junior stock); and
no common stock or other junior stock shall be purchased,
redeemed or otherwise acquired for consideration by us,
directly or indirectly (other than (1) as a result of a
reclassification of junior stock for or into other junior
stock or the exchange or conversion of one share of
junior stock for or into another share of junior stock;
(2) repurchases in support of our employee benefit and
compensation programs; (3) repurchases pursuant to our
previously announced accelerated stock buyback program;
and (4) through the use of the proceeds of a
substantially contemporaneous sale of junior stock).
S-6
When dividends are not paid or duly provided for in full on
any dividend payment date upon the series A preferred shares
or any shares of parity stock, all dividends declared upon
the series A preferred shares and all such parity stock and
payable on such dividend payment date shall be declared pro
rata. See 'Description of the Series A Preferred Shares --
Dividends.'
Dividend Payment Dates.................... The 15th day of March, June, September and December of each
year, commencing on September 15, 2005. If any date on which
dividends would otherwise be payable is not a business day,
then the dividend payment date will be the next succeeding
business day with the same force and effect as if made on
the original dividend payment date.
Dividend Payment Restrictions............. The Certificate of Designations for the series A preferred
shares prohibits the declaration of dividends on the series
A preferred shares if we fail to meet specified capital and
fixed charge coverage levels. See 'Description of the Series
A Preferred Shares -- Restrictions on Declaration and
Payment of Dividends'
Redemption................................ The series A preferred shares are not redeemable prior to
September 15, 2010. On and after that date, the series A
preferred shares will be redeemable at our option as
described below, in whole or in part, at a redemption price
equal to $25 per series A preferred share, plus declared and
unpaid dividends, without the accumulation of any undeclared
dividends. Holders of the series A preferred shares will
have no right to require the redemption or repurchase of the
series A preferred shares and the series A preferred shares
will not be subject to any sinking fund.
We intend that, if we redeem the series A preferred shares,
we will redeem such series A preferred shares only to the
extent the aggregate redemption price is equal to or less
than the net proceeds, if any, received by us or any of our
affiliates from new issuances by us or any of our affiliates
during the period commencing on the 180th calendar day prior
to the date of redemption to purchasers other than our
affiliates of any securities which have equal or greater
equity characteristics for us as the series A preferred
shares. See 'Description of the Series A Preferred
Shares -- Redemption.'
Ranking................................... The series A preferred shares:
will rank senior to our junior stock with respect to the
payment of dividends and distributions of assets upon
liquidation, dissolution or winding up of CIT Group Inc.
'Junior stock' means any class or series of our stock
that ranks junior to the series A preferred shares either
as to the payment of dividends or as to the distribution
of our assets upon any liquidation, dissolution or
winding up of CIT Group Inc. Junior stock includes our
common stock; and
will rank at least equally with any other series of
parity stock that we may issue with respect to the payment
of dividends and distributions of assets upon
liquidation, dissolution or winding up of CIT Group Inc.
'Parity stock' means any other class or series of our
preferred stock that ranks equally with the series A
preferred shares in the payment of dividends and in the
distribution of our assets on any liquidation,
dissolution or winding up of CIT Group Inc. Concurrently
with this offering of the series A preferred shares, we
are offering shares of our Non-Cumulative Preferred
Stock, Series B, $0.01 par value per share,
S-7
having an aggregate liquidation preference of
$150,000,000 and referred to herein as the 'series B
preferred shares.' The series B preferred shares will
rank equally with the series A preferred shares.
Liquidation Rights........................ Upon any voluntary or involuntary liquidation, dissolution
or winding up of CIT Group Inc., holders of the series A
preferred shares and any parity stock are entitled to
receive out of the assets of CIT Group Inc., available for
distribution to stockholders, before any distribution is
made to holders of common stock or any other junior stock, a
liquidating distribution in the amount of $25 per series A
preferred share, plus any declared and unpaid dividends,
without the accumulation of any undeclared dividends.
Holders of the series A preferred shares will not be
entitled to any other amounts from us after they have
received their full liquidation preference.
In any such distribution, if our assets are not sufficient
to pay the liquidation preferences in full to all holders of
the series A preferred shares and all holders of any parity
stock, the amounts paid to the holders of series A preferred
shares and to the holders of any parity stock will be paid
pro rata in accordance with the respective aggregate
liquidation preferences of those holders. See 'Description
of the Series A Preferred Shares -- Liquidation Rights.'
Voting Rights............................. Holders of the series A preferred shares will have no voting
rights, except with respect to certain fundamental changes
in the terms of the series A preferred shares and in the
case of certain dividend non-payments. See 'Description of
the Series A Preferred Shares -- Voting Rights.'
Maturity.................................. The series A preferred shares do not have any maturity date,
and we are not required to redeem the series A preferred
shares. Accordingly, the series A preferred shares will
remain outstanding indefinitely, unless and until we decide
to redeem them.
Preemptive Rights......................... Holders of the series A preferred shares will have no
preemptive rights.
Listing................................... We will apply for listing of the series A preferred shares
on the New York Stock Exchange under the symbol 'CIT PrA.'
If approved for listing, we expect trading of the series A
preferred shares on the New York Stock Exchange to commence
within 30 days after initial delivery.
Ratings................................... The series A preferred shares are expected to be rated BBB+
by Standard & Poor's Ratings Services, Baa1 by Moody's
Investors Service and A- by Fitch Ratings. The ratings of
the series A preferred shares should be evaluated
independently from similar ratings of other securities. A
rating is not a recommendation to buy, sell or hold
securities and may be subject to review, revision,
suspension, reduction or withdrawal at any time by the
assigning rating agency.
Tax Considerations........................ If you are a non-corporate U.S. holder, dividends paid to
you in taxable years beginning before January 1, 2009
generally will be taxable to you at a maximum rate of 15%,
subject to certain requirements described herein. If you are
taxed as a corporation, except as described below under
'Certain U.S. Federal Income Tax Consequences,' dividends
generally would be eligible for the 70% dividends-received
deduction. If you are a United States alien holder of series
A preferred shares, dividends paid to you are subject to
withholding tax at a 30% rate or at a lower rate if you are
eligible for the benefits of an income tax treaty that
provides for a lower
S-8
rate. For further discussion of the tax consequences
relating to the series A preferred shares, see 'Certain U.S.
Federal Income Tax Considerations.'
Use of Proceeds........................... We estimate that we will receive net proceeds of
approximately $341,285,000 from this offering, after
expenses and underwriting discounts. We currently intend to
use the net proceeds from this offering, and the concurrent
offering of our series B preferred shares, to fund the
repurchase of a portion of our common stock in conjunction
with a previously announced accelerated stock buyback
program.
Transfer Agent and Registrar.............. The Bank of New York.
S-9
SUMMARY CONSOLIDATED FINANCIAL DATA
The following tables set forth selected consolidated financial information
regarding our results of operations and balance sheets. The financial data at
December 31, 2004 and December 31, 2003, and for the years ended December 31,
2004 and December 31, 2003, the three months ended December 31, 2002 and the
year ended September 30, 2002, was derived from our audited Consolidated
Financial Statements incorporated by reference in this prospectus supplement and
in the accompanying prospectus. The financial data at December 31, 2002,
September 30, 2002 and 2001, and December 31, 2000, for the nine months ended
September 30, 2001 and for the year ended December 31, 2000 was derived from
audited financial statements that are not incorporated by reference in this
prospectus supplement and in the accompanying prospectus. The financial data at
March 31, 2005 and March 31, 2004 and for the three-month periods then ended is
derived from the unaudited consolidated financial statements of CIT that are
incorporated by reference in this prospectus supplement and in the accompanying
prospectus. In the opinion of management, such unaudited consolidated financial
statements reflect all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of the information included therein. Certain
prior period balances have been conformed to present period presentation. You
should read the selected consolidated financial data below in conjunction with
our consolidated financial statements. See 'Where You Can Find More Information'
in this prospectus supplement.
THREE MONTHS
THREE MONTHS ENDED YEAR ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
2005(1) 2004(1) 2004 2003 2002 2002
($ IN MILLIONS, EXCEPT PER SHARE DATA) --------- --------- ------------- ------------- ------------- --------------
RESULTS OF OPERATIONS
Net finance margin.................. $ 390.2 $ 363.1 $ 1,569.6 $ 1,327.8 $ 344.9 $ 1,637.1
Provision for credit losses......... 45.3 85.6 214.2 387.3 133.4 788.3
Operating margin.................... 595.1 508.6 2,242.5 1,799.8 468.6 1,781.1
Salaries and general operating
expenses........................... 261.0 240.0 1,046.4 912.9 232.6 921.0
Goodwill impairment................. -- -- -- -- -- 6,511.7
Goodwill amortization............... -- -- -- -- -- --
Acquisition related costs........... -- -- -- -- -- --
Interest expense -- TCH............. -- -- -- -- -- 662.6
Gain on redemption of debt.......... -- 41.8 41.8 50.4 -- --
Net income (loss)................... 210.4 189.3 753.6 566.9 141.3 (6,698.7)
Net income (loss) per
share(2) -- basic.................. 1.00 0.89 3.57 2.68 0.67 (31.66)
Net income (loss) per
share(2) -- diluted................ 0.98 0.88 3.50 2.66 0.67 (31.66)
Dividends per share(2).............. 0.13 0.13 0.52 0.48 0.12 --
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
2001 2000
($ IN MILLIONS, EXCEPT PER SHARE DATA) -------------- -------------
RESULTS OF OPERATIONS
Net finance margin.................. $ 1,301.7 $ 1,447.9
Provision for credit losses......... 332.5 255.2
Operating margin.................... 1,541.8 2,104.7
Salaries and general operating
expenses........................... 777.4 1,013.7
Goodwill impairment................. -- --
Goodwill amortization............... 97.6 86.3
Acquisition related costs........... 54.0 --
Interest expense -- TCH............. 98.8 --
Gain on redemption of debt.......... -- --
Net income (loss)................... 263.3 611.6
Net income (loss) per
share(2) -- basic.................. 1.24 2.89
Net income (loss) per
share(2) -- diluted................ 1.24 2.89
Dividends per share(2).............. 0.25 0.50
MARCH 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
2005 2004 2004 2003 2002 2002
($ IN MILLIONS) --------- --------- ------------- ------------- ------------- --------------
BALANCE SHEET DATA
Finance receivables............... $36,859.6 32,187.4 $35,048.2 $31,300.2 $27,621.3 $28,459.0
Education lending receivables
pledged.......................... 4,322.9 -- -- -- -- --
Reserve for credit losses......... 620.4 636.7 617.2 643.7 760.8 777.8
Operating lease equipment, net.... 8,313.1 7,576.2 8,290.9 7,615.5 6,704.6 6,567.4
Goodwill and intangible assets.... 906.4 485.5 596.5 487.7 400.9 402.0
Total assets...................... 56,781.0 46,252.4 51,111.3 46,342.8 41,932.4 42,710.5
Commercial paper.................. 3,936.0 4,820.2 4,210.9 4,173.9 4,974.6 4,654.2
Variable-rate bank credit
facilities....................... -- -- -- -- 2,118.0 4,037.4
Variable-rate senior notes........ 11,473.1 9,170.7 11,545.0 9,408.4 4,906.9 5,379.0
Fixed-rate senior notes........... 22,197.0 19,829.8 21,715.1 19,830.8 19,681.8 18,385.4
Non-recourse, secured
borrowings -- education
lending.......................... 4,638.9 -- -- -- -- --
Preferred capital securities...... 253.3 255.1 253.8 255.5 257.2 257.7
Stockholders' equity.............. 6,318.0 5,492.7 6,055.1 5,394.2 4,870.7 4,757.8
SEPTEMBER 30, DECEMBER 31,
2001 2000
($ IN MILLIONS) -------------- -------------
BALANCE SHEET DATA
Finance receivables............... $31,879.4 $33,497.5
Education lending receivables
pledged.......................... -- --
Reserve for credit losses......... 492.9 468.5
Operating lease equipment, net.... 6,402.8 7,190.6
Goodwill and intangible assets.... 6,569.5 1,971.5
Total assets...................... 51,349.3 48,689.8
Commercial paper.................. 8,869.2 9,063.5
Variable-rate bank credit
facilities....................... -- --
Variable-rate senior notes........ 9,614.6 11,130.5
Fixed-rate senior notes........... 17,113.9 17,571.1
Non-recourse, secured
borrowings -- education
lending.......................... -- --
Preferred capital securities...... 260.0 250.0
Stockholders' equity.............. 5,947.6 6,007.2
---------
(1) Certain aerospace and rail maintenance costs were reclassified during the
quarter ended March 31, 2005 from operating expense to lease margin. These
costs include amounts that were reimbursed through rail lease payments and
expenditures to place aircraft with new lessors, including improvements and
configuration changes. The impact was a reduction to operating margin of
$11.7 million and $7.3 million for the quarters ended March 31, 2005 and
March 31, 2004. With the exception of the three months ended March 31, 2004,
prior periods have not been reclassified to conform to this presentation.
(2) Net income (loss) and dividend per share calculations for the periods
preceding September 30, 2002 are based on the number of common shares
outstanding (basic and diluted of 211.6 million and 211.7 million,
respectively) upon the completion of the July 2002 initial public offering.
S-10
AT OR FOR THE AT OR FOR THE
THREE MONTHS AT OR FOR THE AT OR FOR THE THREE MONTHS AT OR FOR THE
ENDED YEAR ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
--------------------- ------------- ------------- ------------- -------------
2005 2004 2004 2003 2002 2002
($ IN MILLIONS) --------- --------- ------------- ------------- ------------- -------------
SELECTED DATA AND RATIOS
PROFITABILITY
Net finance margin as a
percentage of average earning
assets ('AEA')(1)............ 3.54% 3.94% 4.02% 3.71% 4.22% 4.57%
Ratio of earnings to fixed
charges(2)................... 1.84x 2.03x 1.97x 1.68x 1.65x (7)
OTHER OPERATING RATIOS
Salaries and general operating
expenses as a percentage of
average managed assets
('AMA')(3)................... 2.01% 2.08% 2.20% 1.99% 2.10% 1.95%
Efficiency ratio(4)........... 40.8% 40.4% 42.6% 41.7% 38.6% 35.8%
CREDIT QUALITY
60+ days contractual
delinquency as a percentage
of finance receivables....... 1.76% 1.89% 1.73% 2.16% 3.63% 3.76%
Non-accrual loans as a
percentage of finance
receivables.................. 1.13% 1.74% 1.31% 1.81% 3.43% 3.43%
Net credit losses as a
percentage of average finance
receivables.................. 0.52% 1.26% 0.91% 1.77% 2.32% 1.67%
Reserve for credit losses as a
percentage of finance
receivables.................. 1.51% 1.98% 1.76% 2.06% 2.75% 2.73%
LEVERAGE
Tangible stockholders'
equity(5) to managed
assets(6).................... 9.6% 10.7% 10.7% 10.4% 10.4% 9.9%
OTHER
Total managed assets(6)....... $58,795.3 $50,088.6 $53,470.6 $49,735.6 $46,357.1 $47,622.3
Employees..................... 6,130 5,795 5,860 5,800 5,835 5,850
AT OR FOR THE
NINE MONTHS AT OR FOR THE
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------- -------------
2001 2000
($ IN MILLIONS) ------------- -------------
SELECTED DATA AND RATIOS
PROFITABILITY
Net finance margin as a
percentage of average earning
assets ('AEA')(1)............ 4.29% 3.56%
Ratio of earnings to fixed
charges(2)................... 1.30x 1.39x
OTHER OPERATING RATIOS
Salaries and general operating
expenses as a percentage of
average managed assets
('AMA')(3)................... 2.05% 1.97%
Efficiency ratio(4)........... 41.5% 43.0%
CREDIT QUALITY
60+ days contractual
delinquency as a percentage
of finance receivables....... 3.46% 2.98%
Non-accrual loans as a
percentage of finance
receivables.................. 2.67% 2.10%
Net credit losses as a
percentage of average finance
receivables.................. 1.20% 0.71%
Reserve for credit losses as a
percentage of finance
receivables.................. 1.55% 1.40%
LEVERAGE
Tangible stockholders'
equity(5) to managed
assets(6).................... 8.6% 7.8%
OTHER
Total managed assets(6)....... $50,877.1 $54,900.9
Employees..................... 6,785 7,355
---------
(1) 'AEA' means average earning assets, which is the average of finance
receivables, operating lease equipment, finance receivables held for sale
and certain investments, less credit balances of factoring clients.
(2) For purposes of determining the ratio of earnings to fixed charges, earnings
consist of income before income taxes and fixed charges. Fixed charges
consist of interest on indebtedness, minority interest in subsidiary trust
holding solely debentures of the Company and one-third of rent expense,
which is deemed representative of an interest factor.
(3) 'AMA' means average managed assets, which is average earning assets plus the
average of finance receivables previously securitized and still managed by
us.
(4) Efficiency ratio is the percentage of salaries and general operating
expenses to operating margin, excluding the provision for credit losses.
(5) Tangible stockholders' equity excludes goodwill and other intangible assets.
Tangible stockholders' equity also excludes certain unrealized losses
relating to derivative financial instruments and other investments, as these
losses are not necessarily indicative of amounts that will be realized.
(6) 'Managed assets' means assets previously securitized and still managed by us
and include (i) financing and leasing assets, (ii) certain investments and
(iii) off-balance sheet finance receivables.
(7) Earnings were insufficient to cover fixed charges by $6,331.1 million for
the year ended September 30, 2002. Earnings for the year 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 $1,497.2
million and a loss before provision for income taxes of $6,331.1 million
resulting in a total loss before provision for income taxes and fixed
charges of $4,833.9 million.
S-11
RISK FACTORS
In considering whether to purchase the series A preferred shares, you should
carefully consider all the information included or incorporated by reference in
this prospectus supplement and in the accompanying prospectus. In particular,
you should carefully consider the following risk factors.
THE SERIES A PREFERRED SHARES MAY NOT HAVE AN ACTIVE TRADING MARKET.
The series A preferred shares are a new issue of securities with no
established trading market. Although CIT plans to apply to have the series A
preferred shares listed on the New York Stock Exchange, there is no guarantee
that it will be able to list the series A preferred shares. Even if the series A
preferred shares are listed, there may be little or no secondary market for the
series A preferred shares, and even if a secondary market for the series A
preferred shares develops, it may not provide significant liquidity, and
transaction costs in any secondary market could be high. As a result, the
difference between the bid and ask prices in any secondary market could be
substantial. Further, because the series A preferred shares do not have a stated
maturity date, investors seeking liquidity in such shares will be limited to
selling their shares in the secondary market.
GENERAL MARKET CONDITIONS AND OTHER FACTORS COULD ADVERSELY AFFECT MARKET
PRICES FOR THE SERIES A PREFERRED SHARES.
As with other publicly traded securities, there can be no assurance about
the market prices for the series A preferred shares. Several factors, many of
which are beyond our control, could influence the value of the series A
preferred shares, including:
whether dividends have been declared and are likely to be declared on the
series A preferred shares from time to time;
the prevailing interest rates, increases in which may have an adverse
effect on the trading price of the series A preferred shares;
the market for similar securities;
the credit ratings assigned to the series A preferred shares, as
determined by credit rating agencies;
economic, financial, geopolitical or regulatory events that affect us or
the financial markets generally; and
our financial condition, performance and prospects.
Accordingly, if you purchase series A preferred shares, whether in this
offering or in the secondary market, the series A preferred shares may trade at
a discount to the price that you paid for them.
THE SERIES A PREFERRED SHARES ARE EQUITY AND ARE EFFECTIVELY SUBORDINATE TO
OUR EXISTING AND FUTURE INDEBTEDNESS.
The series A preferred shares are equity interests in CIT and do not
constitute indebtedness. In the event of bankruptcy, liquidation, dissolution,
reorganization or similar proceeding with respect to us, the holders of our
indebtedness will be entitled to the satisfaction of any amounts owed to them
prior to the payment of the liquidation preference of any capital stock,
including the series A preferred shares. Our existing and future indebtedness
may restrict payments of dividends on the series A preferred shares.
Additionally, unlike indebtedness, where principal and interest would
customarily be payable on specific due dates, in the case of preferred stock
like the series A preferred shares (1) dividends are payable only if declared by
CIT's Board of Directors, or a duly authorized committee of the Board, and (2)
as a corporation, CIT is subject to restrictions on payments of dividends and
redemption price out of lawfully available funds. Our total indebtedness was
approximately $43.459 billion at June 30, 2005.
DIVIDENDS ON THE SERIES A PREFERRED SHARES ARE NON-CUMULATIVE.
Dividends on the series A preferred shares are non-cumulative. Consequently,
if our Board of Directors, or a duly authorized committee of the Board, does not
authorize and declare a dividend for any dividend period, holders of the series
A preferred shares would not be entitled to receive any such dividend, and such
unpaid dividend will cease to be payable. We will have no obligation to pay
dividends for any dividend period after the dividend payment date for such
period if our Board of Directors, or a duly authorized committee of the Board,
has not declared such dividend before the related dividend
S-12
payment date, whether or not dividends are declared for any subsequent dividend
period with respect to the series A preferred shares, the series B preferred
shares or any other preferred stock that we may issue.
OUR ABILITY TO DECLARE AND PAY DIVIDENDS ON THE SERIES A PREFERRED SHARES
WILL BE LIMITED IF WE FAIL TO ACHIEVE SPECIFIED CAPITAL AND FIXED CHARGE
COVERAGE LEVELS.
We are prohibited from declaring dividends for payment on any dividend
payment date if either:
our Tangible Equity Amount is less than 5.5% of Total Managed Assets for
the most recently completed fiscal quarter; or
the Average Four Quarters Fixed Charge Ratio for the most recently
completed fiscal quarter is less than or equal to 1.10.
If we fail to satisfy either of the above tests, we are prohibited from
declaring dividends for payment on the related dividend payment date in an
amount exceeding the New Common Equity Amount. This restriction will continue
until we are able again to satisfy the tests with respect to a dividend payment
date. See 'Description of the Series A Preferred Shares -- Restrictions on
Declaration and Payment of Dividends.'
WE MAY IN THE FUTURE ISSUE SERIES OF PREFERRED STOCK THAT DO NOT INCLUDE
RESTRICTIONS ON PAYING DIVIDENDS AND MAY PAY DIVIDENDS ON SUCH PREFERRED
STOCK AT TIMES WHEN WE ARE PROHIBITED FROM PAYING DIVIDENDS ON THE SERIES A
PREFERRED SHARES.
The certificate of designations for the series A preferred shares provides
that preferred stock that we may choose to issue in the future that does not
include the restrictions on dividends described under 'Description of the Series
A Preferred Shares -- Restrictions on the Declaration and Payment of Dividends'
but that otherwise ranks pari passu with the series A preferred shares will not
be treated as ranking senior to the series A preferred shares. As a consequence,
we could issue such preferred stock without receiving the prior vote or consent
of the holders of the series A preferred shares and, if we were to issue such
preferred stock and if dividends as to a dividend period were not paid on the
series A preferred shares due to the restrictions described under 'Description
of the Series A Preferred Shares -- Restrictions on the Declaration and Payment
of Dividends,' we would not be precluded from paying dividends on such preferred
stock because of the required suspension of dividends on the series A preferred
shares.
THE VOTING RIGHTS OF HOLDERS OF THE SERIES A PREFERRED SHARES WILL BE
LIMITED.
Holders of the series A preferred shares have no voting rights with respect
to matters that generally require the approval of voting shareholders. The
limited voting rights of holders of the series A preferred shares include the
right to vote as a class on certain fundamental matters that may affect the
preference or special rights of the series A preferred shares, as described
under 'Description of the Series A Preferred Shares -- Voting Rights.'
In addition, if dividends on the series A preferred shares have not been
declared or paid for the equivalent of six dividend payments, whether or not for
consecutive dividend periods, holders of the outstanding series A preferred
shares, together with holders of any other series of our preferred stock ranking
equal to the series A preferred shares with similar voting rights, will be
entitled to vote for the election of two additional directors, subject to the
terms and to the limited extent described under 'Description of the Series A
Preferred Shares -- Voting Rights.'
HOLDERS OF THE SERIES A PREFERRED SHARES MAY NOT BE ABLE TO USE THE DIVIDENDS
RECEIVED DEDUCTION OR TREAT DIVIDENDS ON THE SERIES A PREFERRED SHARES AS
QUALIFIED DIVIDEND INCOME.
Dividends paid to corporate U.S. holders on the series A preferred shares
may be eligible for the dividends received deduction, and dividends paid to
non-corporate U.S. holders on the series A preferred shares in taxable years
beginning before January 1, 2009 may be taxable at preferential rates as
qualified dividend income, in each case if we have current or accumulated
earnings and profits, as determined for U.S. federal income tax purposes. There
can be no assurance that we will have sufficient current or accumulated earnings
and profits for distributions on the series A preferred shares to qualify as
dividends for U.S. federal income tax purposes. Distributions on the series A
preferred shares that are not treated as dividends for U.S. federal income tax
purposes generally will first reduce a holder's basis in the series A preferred
shares (but not below zero), which could result in increased gain upon an
eventual sale, and
S-13
thereafter will result in taxable gain. See 'Certain U.S. Federal Income Tax
Considerations -- Distributions.' Corporate U.S. holders may be subject to tax
on gain at rates that exceed the effective rate that would apply to dividend
income that is eligible for the dividends received deduction, and if any
distributions on the series A preferred shares are not eligible for the
dividends received deduction because of insufficient current or accumulated
earnings and profits, the market value of the series A preferred shares may
decline. A non-corporate U.S. holder with a holding period of one year or less
at the time of an eventual sale, if a distribution results in a reduction in
basis, or at the time of the distribution, if the distribution results in
immediate recognition of gain, may be subject to tax on the gain at a rate
higher than the maximum 15% rate that applies to qualified dividend income.
S-14
USE OF PROCEEDS
We estimate that we will receive net proceeds of approximately $341,285,000
from this offering, after expenses and underwriting discounts. We currently
intend to use the net proceeds from this offering, and the concurrent offering
of our series B preferred shares, to fund the repurchase of a portion of our
common stock in conjunction with a previously announced accelerated stock
buyback program.
S-15
CAPITALIZATION
The following table sets forth our capitalization as of March 31, 2005 on an
actual basis and as adjusted to give effect to this offering and the concurrent
offering of the series B preferred shares. This table should be read in
conjunction with 'Management's Discussion and Analysis of Financial Condition
and Results of Operations' and our consolidated financial statements and the
notes to those consolidated financial statements incorporated by reference in
this prospectus supplement and in the accompanying prospectus.
AS OF MARCH 31,
2005
-----------------------
ACTUAL AS ADJUSTED
------ -----------
($ IN MILLIONS)
(UNAUDITED)
Commercial paper............................................ $ 3,963.0 $ 3,963.0
Term debt................................................... 33,670.1 33,670.1
Non-recourse, secured borrowings............................ 4,638.9 4,638.9
Preferred capital securities................................ 253.3 253.3
--------- ---------
Total debt.................................................. $42,525.3 $42,525.3
--------- ---------
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000
authorized; none issued and outstanding, actual;
14,000,000 series A preferred shares issued and
outstanding and 1,500,000 series B preferred shares
issued and outstanding, as adjusted................... -- 500.0
Common stock, $0.01 par value, 600,000,000 authorized;
212,119,700 issued and 210,771,309 outstanding........ 2.1 2.1
Additional paid in capital.............................. 10,654.5 10,654.5
Accumulated deficit..................................... (4,316.5) (4,316.5)
Accumulated other comprehensive income.................. 31.2 31.2
Treasury stock, 1,348,391 shares, at cost............... (53.3) (53.3)
--------- ---------
Total stockholders' equity (1).......................... $ 6,318.0 $ 6,818.0
--------- ---------
Total capitalization........................................ $48,843.3 $49,343.3
--------- ---------
--------- ---------
---------
(1) Total stockholders' equity, as adjusted, does not include the repurchase of
up to $500 million in aggregate purchase price of shares of our common stock
pursuant to our previously announced accelerated stock buyback program.
S-16
DESCRIPTION OF THE SERIES A PREFERRED SHARES
The following description of the particular terms of the series A preferred
shares supplements and, to the extent inconsistent with the attached prospectus
or as expressly provided in this prospectus supplement, replaces the more
general description of preferred stock that appears in the attached prospectus.
The following summarizes the material terms of the series A preferred shares,
but does not purport to be complete and is subject to and qualified in its
entirety by reference to our Certificate of Incorporation, which we have
previously filed with the SEC, and the Certificate of Designations relating to
the series A preferred shares, which we will file with the Secretary of the
State of Delaware and include as an exhibit to a current report on Form 8-K that
we will file with the SEC at or prior to the issuance of the series A preferred
shares.
As used in this 'Description of the Series A Preferred Shares' and in the
accompanying prospectus, the terms 'we,' 'our,' 'us,' 'the company,' 'CIT,' 'CIT
Group' and 'CIT Group Inc.' refer to CIT Group Inc. and do not include any
subsidiaries of CIT Group Inc.
GENERAL
Our authorized capital stock includes 100,000,000 shares of preferred stock,
par value $0.01 per share. We have no preferred stock outstanding as of the date
of this prospectus supplement. The series A preferred shares are part of a
single series of authorized preferred stock consisting of 14,000,000 shares. We
may from time to time, without notice to or the consent of holders of the series
A preferred shares, issue additional series A preferred shares.
The series A preferred shares will not be convertible into, or exchangeable
for, shares of any other class or series of our stock or our other securities.
The series A preferred shares have no stated maturity and will not be subject to
any sinking fund, retirement fund or purchase fund or other obligation of ours
to mandatorily redeem, repurchase or retire the series A preferred shares.
The series A preferred shares will be fully paid and nonassessable when
issued, which means that holders will have paid their purchase price in full and
that we may not ask them to surrender additional funds. Holders of the series A
preferred shares will not have preemptive or subscription rights to acquire more
of our stock. Additionally, except as described under the caption ' -- Voting
Rights,' holders of the series A preferred shares will not have any voting
rights.
Concurrently with this offering of the series A preferred shares, we are
offering shares of our Non-Cumulative Preferred Stock, Series B, having an
aggregate liquidation preference of $150,000,000 and referred to herein as the
'series B preferred shares.' The series B preferred shares will rank equally
with the series A preferred shares as to dividends and distributions on
liquidation and will include the same provisions with respect to restrictions on
declaration and payment of dividends and voting rights as apply to the series A
preferred shares and as are described below under ' -- Restrictions on
Declaration and Payment of Dividends' and ' -- Voting Rights.' The series B
preferred shares have a liquidation preference of $100 per share and will bear
dividends at a fixed rate of 5.189% until September 15, 2010 and after
September 15, 2010, at the applicable rate determined from time to time in
accordance with the terms of the series B preferred shares. The offering of the
series A preferred shares and the series B preferred shares are not contingent
upon each other.
RANKING
The series A preferred shares will have a liquidation preference of $25 per
share and will rank at least equally with the series B preferred shares and any
other series of our preferred stock that we may issue (except for any senior
series that may be issued with the requisite consent of the holders of the
series A preferred shares), and will rank senior to our common stock and any
other stock that ranks junior to the series A preferred shares with respect to
the payment of dividends and distributions of assets upon liquidation,
dissolution or winding up of CIT Group Inc.
The Certificate of Designations for the series A preferred shares provides
that preferred stock that we may choose to issue in the future that does not
include the restrictions on dividends described under the caption
' -- Restrictions on the Declaration and Payment of Dividends' below, but that
otherwise ranks
S-17
pari passu with the series A preferred shares, will not be treated as ranking
senior to the series A preferred shares.
The series A preferred shares are equity interests in CIT and do not
constitute indebtedness. As such, we generally will be able to pay dividends on
the series A preferred shares only out of lawfully available funds for such
payment (i.e., after taking account of all outstanding indebtedness and other
non-equity claims). In addition, in the event of bankruptcy, liquidation,
dissolution, reorganization or similar proceeding with respect to us, our
indebtedness will effectively rank senior to the series A preferred shares, and
the holders of our indebtedness will be entitled to the satisfaction of any
amounts owed to them prior to the payment of the liquidation preference of any
capital stock, including the series A preferred shares.
DIVIDENDS
Dividends on the series A preferred shares will not be mandatory. Holders of
series A preferred shares will be entitled to receive, when, as and if declared
by our Board of Directors or a duly authorized committee of the Board, in their
sole discretion out of funds legally available for the payment of dividends
under the Delaware General Corporation Law and subject to the restrictions set
forth under the caption ' -- Restrictions on Declaration and Payment of
Dividends,' non-cumulative cash dividends from the original issue date of the
series A preferred shares offered hereby, quarterly in arrears on the 15th day
of March, June, September and December of each year, commencing on
September 15, 2005 (each, a 'dividend payment date'). These dividends, if
declared, will be payable with respect to each dividend period, on the
liquidation preference amount of $25 per share at an annual rate of 6.350%. In
the event that we issue additional series A preferred shares after the original
issue date of the series A preferred shares offered hereby, dividends on such
additional shares may accrue (if declared) from the original issue date of the
series A preferred shares offered hereby or any other date we specify at the
time such additional shares are issued.
A dividend period is the period from and including a dividend payment date
to but excluding the next dividend payment date (whether or not dividends have
been paid on the prior dividend payment date), except that the initial dividend
period will commence on and include the original issue date of the series A
preferred shares offered hereby and will end on and exclude the September 15,
2005 dividend payment date. Dividends payable on the series A preferred shares
will be computed on the basis of a 360-day year consisting of twelve 30-day
months. If any dividend payment date is not a business day, then such dividend
payment date will be the next succeeding business day with the same force and
effect as if made on the original dividend payment date, and no additional
dividends shall accrue (if declared) or be paid on the amount so payable from
such date to such next succeeding business day.
Dividends will be payable to holders of record of the series A preferred
shares as they appear on our books on the applicable record date, which shall be
the 15th calendar day before that dividend payment date or such other record
date fixed by our Board of Directors, or a duly authorized committee of the
Board, that is not more than 60 nor less than 10 calendar days prior to such
dividend payment date (each, a 'dividend record date'). These dividend record
dates will apply regardless of whether a particular dividend record date is a
business day.
Dividends on the series A preferred shares will not be cumulative.
Accordingly, if our Board of Directors, or a duly authorized committee of the
Board, does not declare a dividend on the series A preferred shares payable in
respect of any dividend period before the related dividend payment date, such
dividend will not accrue and we will have no obligation to pay a dividend for
that dividend period on the dividend payment date or at any future time, whether
or not dividends on the series A preferred shares are declared for any future
dividend period.
So long as any series A preferred shares remain outstanding for any dividend
period, unless the full dividends for the most recent dividend payment date on
all outstanding series A preferred shares and parity stock (defined below) have
been paid or declared and a sum sufficient for the payment thereof has been set
aside for future payment:
no dividend shall be declared or paid on our common stock or any other
shares of our junior stock (as defined below) (other than a dividend
payable solely in the form of junior stock); and
S-18
no common stock or other junior stock shall be purchased, redeemed or
otherwise acquired for consideration by us, directly or indirectly (other
than (1) as a result of a reclassification of junior stock for or into
other junior stock or the exchange or conversion of one share of junior
stock for or into another share of junior stock; (2) repurchases in
support of our employee benefit and compensation programs; (3) repurchases
pursuant to our previously announced accelerated stock buyback program;
and (4) through the use of the proceeds of a substantially contemporaneous
sale of junior stock).
As used in this prospectus supplement, 'junior stock' means any class or
series of our stock that ranks junior to the series A preferred shares either as
to the payment of dividends or as to the distribution of our assets upon any
liquidation, dissolution or winding up of CIT Group Inc. Junior stock includes
our common stock.
As used in this prospectus supplement, 'parity stock' means any other class
or series of our preferred stock that ranks equally with the series A preferred
shares in the payment of dividends and in the distribution of our assets on any
liquidation, dissolution or winding up of CIT Group Inc. Parity stock includes
our series B preferred shares.
A dividend payment date with respect to any parity stock having dividend
payment dates different from the dividend payment dates pertaining to the series
A preferred shares but that falls within the related dividend period for the
series A preferred shares is referred to in this prospectus supplement as a
'parity stock dividend payment date.'
When dividends are declared by our Board of Directors or a duly authorized
committee of the Board, in its sole discretion, and are not paid or duly
provided for in full on any dividend payment date (or, parity stock dividend
payment date, as the case may be) upon the series A preferred shares or any
shares of parity stock, all dividends declared upon the series A preferred
shares and all such parity stock and payable on such dividend payment date (or,
parity stock dividend payment date, as the case may be) shall be declared pro
rata so that the respective amounts of such dividends shall bear the same ratio
to each other as all accrued but unpaid dividends per series A preferred share
and all parity stock payable on such dividend payment date (or, parity stock
dividend payment date, as the case may be) bear to each other.
RESTRICTIONS ON DECLARATION AND PAYMENT OF DIVIDENDS
In addition to the restrictions under the Delaware General Corporation Law,
we are prohibited from declaring and paying dividends on the series A preferred
shares under certain circumstances.
The terms of the series A preferred shares limit our ability to declare
dividends for payment on any dividend payment date if either:
our Tangible Equity Amount is less than 5.5% of Total Managed Assets for
the most recently completed fiscal quarter; or
the Average Four Quarters Fixed Charge Ratio for the most recently
completed fiscal quarter is less than or equal to 1.10.
If we fail to satisfy either of the above tests, we are prohibited from
declaring dividends for payment on the related dividend payment date in an
amount exceeding the New Common Equity Amount. This restriction will continue
until we are able again to satisfy the tests with respect to a dividend payment
date.
All financial terms used in this caption ' -- Restrictions on Declaration
and Payment of Dividends' will be determined in accordance with U.S. GAAP as
applied and reflected in our related financial statements as of the relevant
dates, except as provided in the next sentence. If because of a change in U.S.
GAAP that results in a cumulative effect of a change in accounting principle or
a restatement:
our Tangible Equity Amount is higher or lower than it would have been
absent such change, then, for purposes of the calculations described in
the first test set forth above, commencing with the fiscal quarter for
which such changes in U.S. GAAP becomes effective, such Tangible Equity
Amount will be calculated on a pro forma basis as if such change had not
occurred; or
S-19
our Total Managed Assets is higher or lower than it would have been absent
such change, then, for purposes of the calculations described in the first
test set forth above, commencing with the fiscal quarter for which such
changes in U.S. GAAP becomes effective, such Total Managed Assets will be
calculated on a pro forma basis as if such change had not occurred; or
the Average Four Quarters Fixed Charge Ratio as of a fiscal quarter end is
higher or lower than it would have been absent such change, then, for
purposes of the calculations described in the second test set forth above,
and for so long as such calculations are required to be performed, the
Average Four Quarters Fixed Charge Ratio will be calculated on a pro forma
basis as if such change had not occurred.
If at any relevant time or for any relevant period, we are not a reporting
company under the Exchange Act, then for any such relevant dates and periods we
will prepare and post on our web site the financial statements that we would
have been required to file with the SEC had we continued to be a reporting
company under the Exchange Act, in each case on or before the dates that we
would have been required to file such financial statements had we continued to
be an 'accelerated filer' within the meaning of Rule 12b-2 under the Exchange
Act.
Under this ' -- Restrictions on Declaration and Payment of Dividends'
subsection, we use several terms that have special meanings relevant to the
mandatory dividend suspension tests described above. We define these terms as
follows:
'Average Four Quarters Fixed Charge Ratio' means, as of any fiscal quarter
end: (a) the sum, for each of the prior four fiscal quarters inclusive of such
fiscal quarter end, of the quotient of (x) Adjusted Earnings Before Interest and
Taxes and (y) Fixed Charges divided by (b) 4. For purposes of this definition:
Adjusted Earnings Before Interest and Taxes means earnings, as of
any fiscal quarter end, excluding (i) income taxes, (ii) interest
expense, (iii) extraordinary items, (iv) goodwill impairment and
(v) amounts related to discontinued operations.
Fixed Charges means, as of any fiscal quarter end, the sum of (x)
interest expense and (y) preferred dividends.
'New Common Equity Amount' means, at any date, the net proceeds (after
underwriters' or placement agents' fees, commissions or discounts and other
expenses relating to the issuances) received by us from new issuances of our
common stock (whether in one or more public offerings registered under the
Securities Act of 1933, or the Securities Act, or private placements or other
transactions exempt from registration under the Securities Act) during the
period commencing on the 90th day prior to such date, and which are designated
by our Board of Directors at or before the time of issuance as being available
to pay dividends on the series A preferred shares and other parity stock
(including the series B preferred shares).
'Tangible Equity Amount' means, as of any fiscal quarter end, our total
stockholders' equity, as reflected on our consolidated balance sheet as of such
fiscal quarter end, excluding (i) goodwill and (ii) other intangible assets.
'Total Managed Assets' means, as of any fiscal quarter end, total balance
sheet assets plus securitized receivables.
'U.S. GAAP' means, at any date or for any period, U.S. generally accepted
accounting principles as in effect on such date or for such period.
NOTICES RELATED TO ACTUAL MANDATORY SUSPENSION OF DIVIDENDS
By not later than the 15th day prior to each dividend payment date for which
dividends are being suspended because we have failed either of the two tests set
forth above and we do not otherwise intend to declare or pay dividends out of
any New Common Equity Amount, we will give notice of such suspension by first
class mail, postage prepaid, addressed to the holders of record of the series A
preferred shares on the applicable dividend record date; provided that, if the
series A preferred shares are held in book-entry form through DTC, we may give
such notice in any manner permitted by DTC. We will also file a copy of such
notice on Form 8-K with the SEC. Such notice, in addition to stating that
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dividends will be suspended, will set forth the fact that the Tangible Equity
Amount is less than 5.5% of Total Managed Assets for the most recently completed
fiscal quarter if dividends are suspended by reason of failing to satisfy the
first test described above, and the fact that the Average Four Quarters Fixed
Charge Ratio is less than 1.10 if dividends are suspended by reason of failing
to satisfy the second test described above. However, we will not be required to
give such notice if the amount of the dividends for such dividend payment date
does not exceed the New Common Equity Amount.
LIQUIDATION RIGHTS
In the event that we voluntarily or involuntarily liquidate, dissolve or
wind up our affairs, holders of the series A preferred shares and any parity
stock are entitled to receive out of our assets available for distribution to
stockholders, after satisfaction of liabilities to creditors, if any, and before
any distribution of assets is made on our common stock or any of our other
shares of stock ranking junior as to such a distribution to the series A
preferred shares and any parity stock, a liquidating distribution in the amount
of $25 per series A preferred share plus any declared and unpaid dividends,
without the accumulation of any undeclared dividends. Holders of the series A
preferred shares will not be entitled to any other amounts from us after they
have received their full liquidation preference.
In any such distribution, if our assets are not sufficient to pay the
liquidation preferences in full to all holders of the series A preferred shares
and all holders of any parity stock, the amounts paid to the holders of series A
preferred shares and to the holders of any parity stock will be paid pro rata in
accordance with the respective aggregate liquidation preferences of those
holders. In any such distribution, the 'liquidation preference' of any holder of
preferred stock means the amount payable to such holder in such distribution,
including any declared but unpaid dividends (and any unpaid, accrued cumulative
dividends in the case of any holder of parity stock on which dividends accrue on
a cumulative basis, if any). If the liquidation preference has been paid in full
to all holders of the series A preferred shares and any holders of parity stock,
the holders of our other stock shall be entitled to receive all our remaining
assets according to their respective rights and preferences.
For purposes of this section, a merger or consolidation by us with or into
any other entity, including a merger or consolidation in which the holders of
the series A preferred shares receive cash, securities or property for their
shares, or the sale, lease or exchange of all or substantially all of our assets
will not constitute a liquidation, dissolution or winding up of our affairs.
REDEMPTION
The series A preferred shares are not subject to any mandatory redemption,
sinking fund, retirement fund, purchase fund or other similar provisions. The
series A preferred shares are not redeemable prior to September 15, 2010. On or
after September 15, 2010, the series A preferred shares will be redeemable at
our option at any time, as described below, in whole or in part, upon not less
than 30 nor more than 60 calendar days' notice, at a redemption price equal to
$25 per series A preferred share, plus any declared and unpaid dividends,
without the accumulation of any undeclared dividends. Holders of the series A
preferred shares will have no right to require the redemption or repurchase of
the series A preferred shares.
If the series A preferred shares are to be redeemed, the notice of
redemption shall be given by first class mail (or delivered through the
customary practices of DTC) to the holders of record of the series A preferred
shares to be redeemed, not less than 30 nor more than 60 calendar days prior to
the date fixed for redemption thereof; provided that, if the series A preferred
shares are held in book-entry form through DTC, we may give such notice in any
manner permitted by DTC. Each notice of redemption will include a statement
setting forth:
the redemption date;
the number of series A preferred shares to be redeemed and, if less than
all the series A preferred shares are to be redeemed, the number of such
series A preferred shares to be redeemed;
the redemption price; and
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the place or places where holders may surrender certificates evidencing
the series A preferred shares for payment of the redemption price.
If notice of redemption of any series A preferred shares has been given and
if the funds necessary for such redemption have been set aside by us for the
benefit of the holders of any series A preferred shares so called for
redemption, then, from and after the redemption date, such series A preferred
shares shall no longer be deemed outstanding and all rights of the holders of
such series A preferred shares will terminate, except the right to receive the
redemption price.
In case of any redemption of only part of the series A preferred shares at
the time outstanding, the series A preferred shares to be redeemed shall be
selected either pro rata or in such other manner as we may determine to be fair
and equitable.
We intend that, if we redeem the series A preferred shares, we will redeem
such series A preferred shares only to the extent the aggregate redemption price
is equal to or less than the net proceeds, if any, received by us or any of our
affiliates from new issuances by us or any of our affiliates during the period
commencing on the 180th calendar day prior to the date of redemption to
purchasers other than our affiliates of any securities which have equal or
greater equity characteristics for us as the series A preferred shares. See
'Description of the Series A Preferred Shares -- Redemption.'
VOTING RIGHTS
Except as provided below, the holders of the series A preferred shares will
have no voting rights.
Whenever dividends on any series A preferred shares have not been declared
and paid for the equivalent of six or more dividend payments, whether or not for
consecutive dividend periods (a 'nonpayment'), the holders of such series A
preferred shares, voting together as a single class with holders of any and all
other series of voting preferred stock (as defined below) then outstanding
(including the holders of any series B preferred shares), will be entitled to
vote for the election of a total of two additional members of our Board of
Directors (the 'preferred stock directors'); provided that the election of any
such directors will not cause us to violate the corporate governance requirement
of the New York Stock Exchange (or any other exchange or automated quotation
system on which our securities may be listed or quoted) that requires listed or
quoted companies to have a majority of independent directors; and provided
further that our Board of Directors shall, at no time, include more than two
preferred stock directors. In that event, the number of directors on our Board
of Directors will automatically increase by two, and the new directors will be
elected at a special meeting called at the request of the holders of at least
20% of the series A preferred shares or of any other series of voting preferred
stock (provided that such request is received at least 90 calendar days before
the date fixed for the next annual or special meeting of the stockholders,
failing which election shall be held at such next annual or special meeting of
stockholders), and at each subsequent annual meeting.
As used in this prospectus supplement, 'voting preferred stock' means any
other class or series of our preferred stock ranking equally with the series A
preferred shares either as to dividends or the distribution of assets upon
liquidation, dissolution or winding up and upon which like voting rights have
been conferred and are exercisable, and includes the series B preferred shares.
Whether a plurality, majority or other portion of the series A preferred shares
and any other voting preferred stock have been voted in favor of any matter
shall be determined by reference to the respective liquidation preference
amounts of the series A preferred shares and such other voting preferred stock
voted.
If and when dividends for at least four dividend periods, whether or not
consecutive, following a nonpayment have been paid in full, or declared and a
sum sufficient for such payment shall have been set aside (a 'nonpayment
remedy'), the holders of the series A preferred shares shall immediately and,
without any further action by the company, be divested of the foregoing voting
rights, subject to the revesting of such rights in the event of each subsequent
nonpayment. If such voting rights for the series A preferred shares and all
other holders of voting preferred stock have terminated, the term of office of
each preferred stock director so elected will terminate and the number of
directors on our Board shall automatically decrease by two. In determining
whether dividends have been paid for four dividend periods following a
nonpayment, we may take account of any dividend we elect to pay for such a
dividend period after the regular dividend payment date for that period has
passed.
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Any preferred stock director may be removed at any time without cause by the
holders of record of a majority of the outstanding series A preferred shares and
any other shares of voting preferred stock then outstanding (voting together as
a class) when they have the voting rights described above. In the event that a
nonpayment shall have occurred and there shall not have been a nonpayment
remedy, any vacancy in the office of a preferred stock director (other than
prior to the initial election after a nonpayment) may be filled by the written
consent of the preferred stock director remaining in office or, if none remains
in office, by a vote of the holders of record of a majority of the outstanding
series A preferred shares and any other shares of voting preferred stock then
outstanding (voting together as a class) when they have the voting rights
described above; provided that the filling of each vacancy will not cause us to
violate the corporate governance requirement of the New York Stock Exchange (or
any other exchange or automated quotation system on which our securities may be
listed or quoted) that requires listed or quoted companies to have a majority of
independent directors. The preferred stock directors will each be entitled to
one vote per director on any matter.
So long as any series A preferred shares remain outstanding, we will not,
without the affirmative vote or consent of the holders of at least two-thirds of
the outstanding series A preferred shares and all other series of voting
preferred stock entitled to vote thereon, voting together as a single class,
given in person or by proxy, either in writing or at a meeting:
amend or alter the provisions of our certificate of incorporation or the
Certificate of Designations for the series A preferred shares so as to
authorize or create, or increase the authorized amount of, any specific
class or series of stock ranking senior to the series A preferred shares
with respect to payment of dividends or the distribution of our assets
upon liquidation, dissolution or winding up of CIT Group Inc.;
amend, alter or repeal the provisions of our certificate of incorporation
or the Certificate of Designations for the series A preferred shares so as
to materially and adversely affect the special rights, preferences,
privileges and voting powers of the series A preferred shares, taken as a
whole; or
consummate a binding share exchange or reclassification involving the
series A preferred shares or a merger or consolidation of us with another
entity, unless in each case (i) the series A preferred shares remain
outstanding or, in the case of any such merger or consolidation with
respect to which we are not the surviving or resulting entity, are
converted into or exchanged for preference securities of the surviving or
resulting entity or its ultimate parent, and (ii) such series A preferred
shares remaining outstanding or such preference securities, as the case
may be, have such rights, preferences, privileges and voting powers, taken
as a whole, as are not materially less favorable to the holders thereof
than the rights, preferences, privileges and voting powers of the series A
preferred shares, taken as a whole,
provided, however, that (1) any increase in the amount of the company's
authorized but unissued shares of preferred stock, (2) any increase in the
authorized or issued series A preferred shares and, (3) the creation and
issuance, or an increase in the authorized or issued amount, of other series of
preferred stock ranking equally with or junior to the series A preferred shares
with respect to the payment of dividends (whether such dividends are cumulative
or non-cumulative) and/or the distribution of assets upon our liquidation,
dissolution or winding up, will not be deemed to materially and adversely affect
the special rights, preferences, privileges or voting powers of the series A
preferred shares.
If any amendment, alteration, repeal, share exchange, reclassification,
merger or consolidation described above would materially and adversely affect
one or more but not all series of voting preferred stock (including the series A
preferred shares for this purpose), then only the series of preferred stock
materially and adversely affected and entitled to vote shall vote as a class in
lieu of all other series of preferred stock.
Without the consent of the holders of the series A preferred shares, so long
as such action does not adversely affect the special rights, preferences,
privileges and voting powers of the series A preferred
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shares, taken as a whole, we may amend, alter, supplement or repeal any terms of
the series A preferred shares:
to cure any ambiguity, or to cure, correct or supplement any provision
contained in the Certificate of Designations for the series A preferred
shares that may be defective or inconsistent; or
to make any provision with respect to matters or questions arising with
respect to the series A preferred shares that is not inconsistent with the
provisions of the Certificate of Designations.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding series A preferred shares shall have been redeemed
or called for redemption upon proper notice and sufficient funds shall have been
set aside by us for the benefit of the holders of series A preferred shares to
effect such redemption.
LISTING OF THE SERIES A PREFERRED SHARES
We will apply to list the series A preferred shares on the New York Stock
Exchange under the symbol 'CIT PrA.' Approval of our application will be
subject, among other things, to satisfactory distribution of the series A
preferred shares. We expect that, if approved, trading of the series A preferred
shares on the New York Stock Exchange will commence within 30 calendar days
after initial delivery.
TRANSFER AGENT AND REGISTRAR
The Bank of New York will be the transfer agent, registrar, dividend
disbursing agent and redemption agent for the series A preferred shares.
BOOK-ENTRY; DELIVERY AND FORM
Each series A preferred share will be deposited with, or on behalf of, DTC
or any successor thereto, as depositary, and registered in the name of Cede &
Co. (DTC's partnership nominee).
DTC has advised us that it is a limited-purpose trust company organized
under the New York Banking Law, a 'banking organization' within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a 'clearing
corporation' within the meaning of the New York Uniform Commercial Code, and a
'clearing agency' registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC holds and provides asset servicing for over two million issues
of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and
money market instruments from over 85 countries that DTC participants
('participants') deposit with DTC. DTC also facilitates the post-trade
settlement among participants of sales and other securities transactions in
deposited securities, through electronic computerized book-entry transfers and
pledges between participants' accounts. This eliminates the need for physical
movement of securities certificates.
'Direct participants' in DTC include both U.S. and non-U.S. securities
brokers and dealers, banks, trust companies, clearing corporations, and certain
other organizations. DTC is a wholly owned subsidiary of The Depository Trust &
Clearing Corporation ('DTCC'). DTCC, in turn, is owned by a number of direct
participants of DTC and members of the National Securities Clearing Corporation,
Government Securities Clearing Corporation, MBS Clearing Corporation, and
Emerging Markets Clearing Corporation, each of which is a subsidiary of DTCC, as
well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC,
and the National Association of Securities Dealers, Inc. Access to DTC's book-
entry system is also available to others such as both U.S. and non-U.S.
securities brokers and dealers, banks, trust companies, and clearing
corporations that clear through or maintain a custodial relationship with a
direct participant, either directly or indirectly ('indirect participants'). The
rules applicable to DTC and its participants are on file with the SEC.
Purchases of the series A preferred shares under DTC's book-entry system
must be made by or through direct participants, which will receive a credit for
the series A preferred shares on the records of DTC. The ownership interest of
each actual purchaser of the series A preferred shares, which we refer to as the
'beneficial owner,' is in turn to be recorded on the participants' records.
Beneficial owners will not receive written confirmation from DTC of their
purchase, but beneficial owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings
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from the direct participant or indirect participant through which the beneficial
owner entered into the transaction. Transfers of ownership interests in the
series A preferred shares will be effected only through entries made on the
books of participants acting on behalf of beneficial owners. Beneficial owners
will not receive certificates representing their ownership interests in the
series A preferred shares, except in the event that use of the book-entry system
for the series A preferred shares is discontinued. The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to own, transfer or pledge beneficial interests in the series A preferred
shares.
To facilitate subsequent transfers, all series A preferred shares deposited
by participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of the series A preferred shares with DTC and
their registration in the name of Cede & Co. or such other DTC nominee effect no
change in beneficial ownership. DTC has no knowledge of the actual beneficial
owners of the series A preferred shares. DTC's records reflect only the identity
of the direct participants to whose accounts such series A preferred shares are
credited, which may or may not be the beneficial owners. The participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to participants, by
direct participants to indirect participants, and by direct participants and
indirect participants to beneficial owners, will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices shall be sent to DTC.
Although voting with respect to the series A preferred shares is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. (nor any other
DTC nominee) will itself consent or vote with respect to series A preferred
shares, unless authorized by a direct participant in accordance with DTC's
procedures. Under its usual procedures, DTC mails an omnibus proxy to us as soon
as possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the
series A preferred shares are credited on the record date (identified in a
listing attached to the omnibus proxy).
Payments on the series A preferred shares will be made to Cede & Co. or such
other nominee as may be requested by an authorized representative of DTC. DTC's
practice is to credit direct participants' accounts upon DTC's receipt of funds
and corresponding detail information from us on the relevant payment date in
accordance with their respective holdings shown on DTC's records. Payments by
participants to beneficial o wners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in ``street name,' and will be the
responsibility of such participant and not of DTC nor its nominee or us, subject
to any statutory or regulatory requirements as may be in effect from time to
time. Payments to Cede & Co. (or such nominee as may be requested by an
authorized representative of DTC) is our responsibility, disbursement of such
payments to direct participants is the responsibility of DTC and disbursement of
such payments to the beneficial owners is the responsibility of direct and
indirect participants.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable, but we take no
responsibility for the accuracy thereof. We have no responsibility for the
performance by DTC or its participants of their respective obligations as
described herein or under the rules and procedures governing their respective
operations.
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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material U.S. federal income tax
consequences relevant to the purchase, ownership and disposition of the series A
preferred shares. This summary is based on the U.S. Internal Revenue Code of
1986, as amended (the 'Code'), Treasury regulations promulgated thereunder, and
administrative and judicial interpretations thereof, all as currently in effect
and all of which are subject to change (which change could apply retroactively
and could affect the U.S. federal income tax consequences described below) and
to different interpretations. This summary does not address all of the U.S.
federal income tax considerations that may be relevant to a particular
investor's circumstances, and does not address any aspect of state,
local, non-U.S. or other U.S. federal tax consequences. This summary addresses
only series A preferred shares held as capital assets within the meaning of the
Code and does not address U.S. federal income tax considerations applicable to
investors that are subject to special tax rules, such as:
securities dealers or brokers, or traders in securities electing
mark-to-market treatment;
banks, thrifts, or other financial institutions;
insurance companies;
regulated investment companies or real estate investment trusts;
tax-exempt organizations;
persons holding our series A preferred shares as part of a 'straddle,'
'hedge,' 'synthetic security' or 'conversion transaction' for U.S. federal
income tax purposes, or as part of some other integrated investment;
partnerships or other pass-through entities;
persons subject to the alternative minimum tax;
certain former citizens or residents of the United States;
a 'passive foreign investment company' or a 'controlled foreign
corporation' for U.S. federal income tax purposes; or
'U.S. Holders' (as defined below) whose functional currency is not the
U.S. dollar.
As used herein, a 'U.S. Holder' is a beneficial owner of a series A
preferred share that is, for U.S. federal income tax purposes, (i) an individual
citizen or resident of the United States, (ii) a corporation (or any other
entity treated as a corporation for U.S. federal income tax purposes) created or
organized in or under the laws of the United States, any state thereof or the
District of Columbia, (iii) an estate whose income is subject to U.S. federal
income tax regardless of its source, or (iv) a trust if (A) a United States
court has the authority to exercise primary supervision over the administration
of the trust and one or more United States persons (as defined under the Code)
are authorized to control all substantial decisions of the trust or (B) it has a
valid election in place to be treated as a United States person. A 'Non-U.S.
Holder' is any beneficial owner of a series A preferred share that is not a U.S.
Holder and that is not a partnership (or other entity treated as a partnership
for U.S. federal income tax purposes).
If a partnership (or other entity treated as a partnership for U.S. federal
income tax purposes) holds the series A preferred shares, the U.S. federal
income tax treatment of a partner will generally depend on the status of the
partner and the activities of the partnership. A partner in a partnership
holding the series A preferred shares should consult its own tax advisor with
regard to the U.S. federal income tax consequences to such partner of the
purchase, ownership and disposition of the series A preferred shares by the
partnership.
THE DISCUSSION OF THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP, SALE OR OTHER DISPOSITION OF THE SERIES A PREFERRED SHARES
IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO
ANY PARTICULAR PERSON. ACCORDINGLY, ALL PROSPECTIVE INVESTORS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE U.S. FEDERAL, STATE, LOCAL AND
FOREIGN TAX CONSEQUENCES RELATING TO THE PURCHASE, OWNERSHIP AND DISPOSITION OF
THE SERIES A PREFERRED SHARES.
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U.S. HOLDERS
Distributions. A distribution paid by us on the series A preferred shares
will constitute a dividend for U.S. federal income tax purposes to the extent
the distribution is paid out of our current or accumulated earnings and profits
as determined under U.S. federal income tax principles. The gross amount of any
such dividend will be included in the gross income of a U.S. Holder, as ordinary
dividend income from U.S. sources. Dividends paid to certain non-corporate U.S.
Holders (including individuals) in taxable years beginning before January 1,
2009 generally will constitute qualified dividend income eligible for U.S.
federal income tax at a reduced rate (with a maximum rate of 15%), provided
certain conditions and requirements are satisfied (including a 61-day holding
period requirement during the 121-day period beginning 60 days before the
ex-dividend date, or, in the case of a dividend attributable to a period or
periods aggregating over 366 days, a 91-day holding period during the 181-day
period beginning 90 days before the ex-dividend date). Corporate U.S. Holders of
the series A preferred shares may be eligible for the 70% dividends received
deduction with respect to dividend distributions that are paid on the series A
preferred shares, subject to certain conditions and limitations, including
a 46-day holding period requirement during the 90-day period beginning 45 days
before the ex-dividend date, or, in the case of a dividend attributable to a
period or periods aggregating over 366 days, a 91-day holding period during
the 181-day period beginning 90 days before the ex-dividend date. There can be
no assurance that we will have sufficient current or accumulated earnings and
profits for distributions on the series A preferred shares to qualify as
dividends for U.S. federal income tax purposes.
Distributions in excess of our current or accumulated earnings and profits
will not be taxable to a U.S. Holder to the extent that such distributions do
not exceed such U.S. Holder's adjusted tax basis in its series A preferred
shares, but rather will reduce the adjusted tax basis of such series A preferred
shares (but not below zero). To the extent that such distributions exceed such
U.S. Holder's adjusted tax basis in its series A preferred shares such
distributions will be included in income as capital gain. Such capital gain will
be long-term capital gain if the U.S. Holder has held the series A preferred
shares for more than one year. For certain U.S. Holders (including individuals),
long-term capital gains are generally taxable at a maximum federal income tax
rate of 15% (for tax years beginning before January 1, 2009).
U.S. Holders should be aware that dividends that exceed certain thresholds
in relation to such U.S. Holders' tax basis in their series A preferred shares
could be characterized as 'extraordinary dividends' (as defined in section 1059
of the Code). Generally, a corporate U.S. Holder that receives an extraordinary
dividend is required to reduce its tax basis by the portion of such dividend
that is not taxed because of the dividends received deduction, and is required
to recognize taxable gain to the extent such portion of the dividend exceeds the
U.S. Holder's tax basis in such series A preferred shares. U.S. Holders who are
individuals and who receive an 'extraordinary dividend' would be required to
treat any losses on the sale of the series A preferred shares as long-term
capital losses to the extent such dividends received by them qualify for the
reduced 15% tax rate. Investors should consult their own tax advisers with
respect to the potential application of the 'extraordinary dividend' rules to an
investment in series A preferred shares.
Sale or Exchange of the Series A Preferred Shares. In general, a U.S. Holder
will recognize capital gain or loss upon the sale or other taxable disposition
of series A preferred shares in an amount equal to the difference between the
sum of the fair market value of any property and the amount of cash received in
such disposition and such U.S. Holder's adjusted tax basis in such series A
preferred shares at the time of such disposition. Any such capital gain will be
long-term capital gain if the series A preferred shares have been held by the
U.S. Holder for more than one year. Long-term capital gains are generally
taxable at a maximum federal income tax rate of 15% (for tax years beginning
before January 1, 2009) in the case of certain non-corporate U.S. Holders
(including individuals). The ability to utilize capital losses is subject to
limitations under the Code.
Redemption of the Series A Preferred Shares. A redemption of series A
preferred shares generally will be treated under section 302 of the Code as a
distribution unless the redemption satisfies one of the tests set forth in
section 302(b) of the Code and is therefore treated as a sale or exchange of the
redeemed shares. If a redemption of series A preferred shares is treated as a
sale or exchange, the redemption will be taxable as described under the caption
' -- Sale or Exchange of the Series A Preferred Shares' above, except that an
amount received in respect of declared but unpaid dividends will generally
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be taxable as a dividend as described under the caption ' -- Distributions'
above if we have sufficient current or accumulated earnings and profits.
A redemption will be treated as a sale or exchange if it (i) results in a
'complete termination' of a U.S. Holder's interest in us, (ii) is 'substantially
disproportionate' with respect to a U.S. Holder, or (iii) is not 'essentially
equivalent to a dividend' with respect to a U.S. Holder, all within the meaning
of Section 302(b) of the Code. In determining whether any of these tests has
been met, shares of our stock considered to be owned by a U.S. Holder by reason
of certain constructive ownership rules, as well as shares actually owned by
such U.S. Holder, must generally be taken into account. If a particular U.S.
Holder does not own (actually or constructively) any shares of any other classes
of our stock, or owns only an insubstantial percentage of our shares, and does
not participate in our control or management, a redemption of all of the series
A preferred shares held by such U.S. Holder generally will qualify for sale or
exchange treatment. However, the determination as to whether any of the tests of
section 302(b) of the Code will be satisfied with respect to any particular U.S.
Holder depends upon the facts and circumstances at the time of the redemption.
If a redemption of series A preferred shares is treated as a distribution,
the entire amount received will be taxable as described under the caption
' -- Distributions' above. In such case, a U.S. Holder's adjusted tax basis in
the redeemed series A preferred shares will be transferred to any remaining
shares of our stock held by such U.S. Holder immediately after the redemption.
If a U.S. Holder does not own any of our shares immediately after the
redemption, such basis may, under certain circumstances, be transferred to
shares of our stock held by a person related to such U.S. Holder or it may be
lost entirely.
Prospective investors should consult their own tax advisors for purposes of
determining the tax consequences resulting from redemption of our series A
preferred shares in their particular circumstances.
NON-U.S. HOLDERS
Distributions. Except as described below, dividends paid to a Non-U.S.
Holder generally will be subject to withholding of U.S. federal income tax at a
30% rate or such lower rate as may be specified by an applicable income tax
treaty. In order to claim the benefits of an applicable income tax treaty,
a Non-U.S. Holder will be required to satisfy applicable certification (for
example, Internal Revenue Service Form W-8BEN or other applicable form) and
other requirements prior to the distribution date. Non-U.S. Holders eligible for
a reduced rate of United States withholding tax under an applicable income tax
treaty may obtain a refund of any amounts withheld in excess of that rate by
filing a refund claim with the United States Internal Revenue Service. Non-U.S.
Holders should consult their own tax advisors regarding their entitlement to
benefits under an applicable income tax treaty and the requirements for claiming
any such benefits.
Dividends paid to a Non-U.S. Holder that are 'effectively connected' with
its conduct of a trade or business within the United States (and, if required by
an applicable income tax treaty, are attributable to a permanent establishment
maintained by the Non-U.S. Holder in the United States) generally are exempt
from the 30% United States withholding tax. Instead, any such dividends will be
subject to U.S. federal income tax in the same manner as if the Non-U.S. Holder
were a U.S. Holder, as described above. Non-U.S. Holders will be required to
comply with certification and disclosure requirements (for example, Internal
Revenue Service Form W-8ECI or applicable successor form) in order for
effectively connected income to be exempt from the 30% United States withholding
tax. A corporate Non-U.S. Holder may also be subject to an additional 'branch
profits tax' at a 30% rate (or such lower rate as may be specified by an
applicable income tax treaty) with respect to any effectively connected
dividends received on the series A preferred shares.
Sale or Exchange of the Series A Preferred Shares. A Non-U.S. Holder
generally will not be subject to U.S. federal income tax on gain recognized on a
disposition of series A preferred shares unless (i) the gain is 'effectively
connected' with such Non-U.S. Holder's conduct of a trade or business within the
United States (and, if required by an applicable income tax treaty, is
attributable to a permanent establishment maintained by the Non-U.S. Holder in
the United States); (ii) the Non-U.S. Holder is an individual who is present in
the United States for 183 or more days in the taxable year of the disposition
and certain other conditions are satisfied; or (iii) we are or have been a
United States real property
S-28
holding corporation for U.S. federal income tax purposes and the Non-U.S. Holder
held, directly or indirectly, at any time during the five-year period ending on
the date of disposition, more than 5% of the series A preferred shares and
such Non-U.S. Holder is not eligible for any treaty exemption.
Gain from the disposition of series A preferred shares by a Non-U.S. Holder
that is 'effectively connected' with its conduct of a trade or business within
the United States (and, if required by an applicable income tax treaty, is
attributable to a permanent establishment maintained by the Non-U.S. Holder in
the United States) generally will be subject to U.S. federal income tax in the
same manner as if the Non-U.S. Holder were a U.S. Holder, as described above. A
corporate Non-U.S. Holder may also be subject to an additional 'branch profits
tax' at a 30% rate (or such lower rate as may be specified by an applicable
income tax treaty) with respect to any effectively connected gain from the
disposition of series A preferred shares. As discussed above under ' -- U.S.
Holders -- Redemption of the Series A Preferred Shares,' the proceeds received
from a redemption of the series A preferred shares may be treated as a
distribution in certain circumstances, in which case, the discussion above under
' -- Distributions' would be applicable.
We have not been, are not and do not anticipate becoming a United States
real property holding corporation for U.S. federal income tax purposes.
BACKUP WITHHOLDING AND INFORMATION REPORTING
U.S. Holders. In general, a U.S. Holder (other than corporations and other
exempt holders) will be subject to information reporting requirements with
respect to dividends and other taxable distributions, and the proceeds from a
sale, redemption or other disposition of the series A preferred shares, paid
within the United States. In addition, a U.S. Holder will be subject to backup
withholding on such amounts if such U.S. Holder (i) fails to provide an accurate
taxpayer identification number to the payor; (ii) has been notified by the
United States Internal Revenue Service that it has failed to report all interest
or dividends required to be shown on its U.S. federal income tax returns; or
(iii) in certain circumstances, fails to comply with applicable certification
requirements.
The proceeds from a sale of series A preferred shares by a U.S. Holder
outside the United States through a non-U.S. office of a non-U.S. broker, in
which the sales proceeds are paid to such U.S. Holder outside the United States,
generally will not be subject to backup withholding and information reporting
requirements. However, U.S. information reporting, but not backup withholding,
will apply to a payment of sales proceeds, even if that payment is made outside
the United States, if the U.S. Holder sells its series A preferred shares
through a non-U.S. office of a broker that is (i) a United States person (as
defined under the Code); (ii) a controlled foreign corporation for United States
tax purposes; (iii) a foreign person 50% or more of whose gross income is
effectively connected with the conduct of a United States trade or business for
a specified three-year period; or (iv) a foreign partnership, if at any time
during its tax year (1) one or more of its partners are United States persons,
who in the aggregate hold more than 50% of the income or capital interest in the
partnership; or (2) such foreign partnership is engaged in the conduct of a
United States trade or business.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against a U.S. Holder's U.S. federal income tax liability
provided the required information is furnished to the Internal Revenue Service
on a timely basis.
Non-U.S. Holders. Dividends paid to a Non-U.S. Holder on its series A
preferred shares generally will be subject to information reporting
requirements. Copies of the information returns reporting such dividends and any
withholding thereon may also be made available to the tax authorities in the
country in which the Non-U.S. Holder resides under the provisions of an
applicable income tax treaty. A Non-U.S. Holder will be subject to backup
withholding for dividends paid to such holder unless such holder certifies under
penalty of perjury that it is a Non-U.S. Holder (and the payor does not have
actual knowledge or reason to know that such holder is a United States person as
defined under the Code), or such holder otherwise establishes an exemption.
Information reporting and, depending on the circumstances, backup withholding
will apply to the proceeds of a sale of the series A preferred shares that is
effected within the United States or conducted through certain United
States-related financial intermediaries, unless the beneficial owner certifies
under penalty of perjury that it is a Non-U.S. Holder
S-29
(and the payor does not have actual knowledge or reason to know that the
beneficial owner is a United States person) or such holder otherwise establishes
an exemption.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against a Non-U.S. Holder's U.S. federal income tax liability
provided the required information is furnished to the Internal Revenue Service
on a timely basis.
S-30
UNDERWRITING
We intend to offer the series A preferred shares in the U.S. through the
underwriters. Goldman, Sachs & Co., Lehman Brothers Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated are acting as representatives of the
underwriters named below. Subject to the terms and conditions described in the
purchase agreement among us and the underwriters, we have agreed to sell the
underwriters, and the underwriters severally have agreed to purchase from us,
the number of series A preferred shares listed opposite their names below.
NUMBER OF
UNDERWRITER SERIES A PREFERRED SHARES
----------- -------------------------
Goldman, Sachs & Co......................................... 3,576,667
Lehman Brothers Inc......................................... 3,576,667
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................... 3,576,667
Citigroup Global Markets Inc................................ 696,667
J.P. Morgan Securities Inc.................................. 1,176,667
Wachovia Capital Markets, LLC............................... 696,667
Bear, Stearns & Co. Inc..................................... 233,333
BNP Paribas Securities Corp................................. 233,333
HSBC Securities (USA) Inc................................... 233,332
----------
Total................................................... 14,000,000
----------
----------
The underwriters have agreed to purchase all of the series A preferred
shares sold under the purchase agreement if any of the series A preferred shares
are purchased. If an underwriter defaults, the purchase agreement provides that
the purchase commitments of the nondefaulting underwriters may be increased or
the purchase agreement may be terminated.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments the
underwriters may be required to make in respect of those liabilities.
The underwriters are offering the series A preferred shares, subject to
prior sale, when, as and if issued to and accepted by them, subject to approval
of legal matters by their counsel, including the validity of the series A
preferred shares, and other conditions contained in the purchase agreements,
such as the receipt by the underwriters of officer's certificates and legal
opinions. The underwriters reserve the right to withdraw, cancel or modify
offers to the public and to reject orders in whole or in part.
COMMISSIONS AND DISCOUNTS
The representatives have advised us that the underwriters propose initially
to offer the series A preferred shares to the public at the initial offering
price on the cover page of this prospectus supplement and to dealers at that
price less a concession not in excess of $0.50 per share ($0.30 per share sold
to certain institutions). The underwriters may allow, and the dealers may
reallow, a discount not in excess of $0.40 per share to other dealers. After the
initial offering, the public offering price, concession and discount may be
changed.
The following table shows the public offering price, underwriting discount
and proceeds before expenses to CIT.
PER SHARE TOTAL
--------- -----
Public offering price....................................... $25.0000 $350,000,000
Underwriting discount....................................... $ 0.7875 $ 11,025,000
Proceeds, before expenses to CIT............................ $24.2125 $338,975,000
The underwriting discount will be $0.50 per series A preferred share offered
hereby with respect to any series A preferred shares sold in an aggregate
liquidation preference of $1,000,000 or more to a single purchaser, which
decreases the total underwriting discount and increases the total proceeds to
CIT Group Inc. by $2,760,000.
S-31
The expenses of the offering, not including the underwriting discount, are
estimated at $450,000 and are payable by CIT.
NEW YORK STOCK EXCHANGE LISTING
We expect the shares to be approved for listing on the New York Stock
Exchange under the symbol 'CIT PrA.' In order to meet the requirements for
listing in that exchange the underwriters have undertaken to sell a minimum
number of shares to a minimum number of beneficial owners as required by that
exchange. Before this offering, there has been no public market for our series A
preferred shares.
An active trading market for the series A preferred shares may not develop.
It is also possible that after the offering the series A preferred shares will
not trade in the public market at or above the initial offering price.
PRICE STABILIZATION, SHORT POSITIONS AND PENALTY BIDS
Until the distribution of the series A preferred shares is complete, SEC
rules may limit underwriters and selling group members from bidding for and
purchasing our series A preferred shares. However, the representatives may
engage in transactions that stabilize the price of the series A preferred
shares, such as bids or purchases to peg, fix or maintain that price.
If the underwriters create a short position in the series A preferred shares
in connection with the offering, i.e., if they sell more series A preferred
shares than are listed on the cover of this prospectus supplement, the
representatives may reduce that short position by purchasing series A preferred
shares in the open market. Purchases of the series A preferred shares to
stabilize its price or to reduce a short position may cause the price of the
series A preferred shares to be higher than it might have been in the absence of
such purchases.
The representatives may also impose a penalty bid on underwriters and
selling group members. This means that if the representatives purchase shares in
the open market to reduce the underwriter's short position or to stabilize the
price of such shares, they may reclaim the amount of the selling concession from
the underwriters and selling group members who sold those shares. The imposition
of a penalty bid may also affect the price of the series A preferred shares in
that it discourages resales of those series A preferred shares.
Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the series A preferred shares. In
addition, neither we nor any of the underwriters makes any representation that
the representatives or the lead managers will engage in these transactions or
that these transactions, once commenced, will not be discontinued without
notice.
OTHER RELATIONSHIPS
We have entered into an agreement to purchase shares of our common stock
from Goldman, Sachs & Co. in connection with a previously announced accelerated
stock buyback program. The net proceeds of this offering and the concurrent
offering of the series B preferred shares will be used in conjunction with such
accelerated stock buyback program. Some of the underwriters and their affiliates
have engaged in, and may in the future engage in, investment banking and other
commercial dealings in the ordinary course of business with us. They have
received and will receive customary fees and commissions for these transactions.
S-32
LEGAL MATTERS
Certain legal matters in connection with the offering of the series A
preferred shares will be passed upon for us by Shearman & Sterling LLP, New
York, New York. Certain legal matters in connection with the offering of the
series A preferred shares will be passed upon for the underwriters by Wilmer
Cutler Pickering Hale and Dorr LLP.
EXPERTS
The consolidated balance sheets of CIT Group Inc. and its subsidiaries as of
December 31, 2004 and December 31, 2003 and the related consolidated statements
of income, stockholders' equity and cash flows for the years ended December 31,
2004, December 31, 2003, the three months ended December 31, 2002 and the year
ended September 30, 2002, incorporated in the accompanying prospectus by
reference to CIT Group Inc.'s Current Report on Form 8-K dated July 20, 2005,
and management's assessment of the effectiveness of internal control over
financial reporting (which is included in Management's Report on Internal
Control over Financial Reporting) as of December 31, 2004, incorporated in the
accompanying prospectus by reference to the Annual Report on Form 10-K of CIT
Group Inc. for the year ended December 31, 2004 have been so incorporated by
reference in reliance on the report (which contains an adverse opinion on the
effectiveness of internal control over financial reporting) of
PricewaterhouseCoopers LLP, independent registered public accounting firm, given
on the authority of said firm as experts in auditing and accounting.
S-33
[THIS PAGE INTENTIONALLY LEFT BLANK]
PROSPECTUS
[CIT LOGO]
CIT GROUP INC.
$15,000,000,000
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
SENIOR DEBT SECURITIES
SUBORDINATED DEBT SECURITIES
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
-------------------
The securities covered by this prospectus may be sold from time to time by
CIT Group Inc. We may offer the securities independently or together in any
combination, called 'units,' for sale directly to purchasers or through
underwriters, dealers or agents to be designated at a future date.
We will provide the specific terms and prices of these securities in
supplements to this prospectus. The prospectus supplements may also add to,
update or change information contained in this prospectus. This prospectus may
not be used to offer or sell any securities unless accompanied by a prospectus
supplement. You should read this prospectus and the applicable prospectus
supplement carefully before you invest in the securities.
Our common stock is listed on the New York Stock Exchange under the symbol
'CIT.'
-------------------
We may sell securities to or through underwriters, dealers or agents. For
additional information on the method of sale, you should refer to the section
entitled 'Plan of Distribution.' The names of any underwriters, dealers or
agents involved in the sale of any securities and the specific manner in which
they may be offered will be set forth in the prospectus supplement covering the
sale of those securities.
-------------------
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.
THE DATE OF THIS PROSPECTUS IS OCTOBER 28, 2004
TABLE OF CONTENTS
PAGE
----
ABOUT THIS PROSPECTUS....................................... 3
WHERE YOU CAN FIND MORE INFORMATION......................... 3
FORWARD-LOOKING STATEMENTS.................................. 4
PROSPECTUS SUMMARY.......................................... 5
USE OF PROCEEDS............................................. 6
DESCRIPTION OF DEBT SECURITIES.............................. 7
DESCRIPTION OF CAPITAL STOCK................................ 16
DESCRIPTION OF DEPOSITARY SHARES............................ 16
DESCRIPTION OF WARRANTS..................................... 19
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE
UNITS..................................................... 21
PLAN OF DISTRIBUTION........................................ 21
LEGAL MATTERS............................................... 23
EXPERTS..................................................... 23
2
ABOUT THIS PROSPECTUS
The information contained in this prospectus is not complete and may be
changed. You should rely only on the information provided in or incorporated by
reference in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making an offer of any securities in any state where the offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front cover of
those documents and that any information we have incorporated by reference is
accurate as of any date other than the date of the document incorporated by
reference or such other date referred to in such document, regardless of the
time of delivery of this prospectus or any sale or issuance of a security.
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (the 'SEC') using a 'shelf' registration
process. Under this shelf registration process, we may sell or issue, in one or
more offerings up to a total amount of $15,000,000,000 of our:
common stock;
preferred stock;
depositary shares;
debt securities, in one or more series, which may be senior debt
securities or subordinated debt securities;
warrants;
stock purchase contracts;
stock purchase units; and
units consisting of any combination of these securities.
This prospectus provides you with a general description of the securities we
may offer. Each time we sell or issue securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
specific offering of securities and the specific manner in which they may be
offered. The prospectus supplement may also add to, update or change any of the
information contained in this prospectus. The prospectus supplement may also
contain information about any material federal income tax considerations
relating to the securities described in the prospectus supplement. You should
read both this prospectus and the applicable prospectus supplement together with
the additional information described under 'Where You Can Find More
Information.' This prospectus may not be used to consummate a sale of securities
unless it is accompanied by a prospectus supplement.
This prospectus contains summaries of provisions of certain documents that
are described herein, but reference is made to the actual documents for complete
information. All of the summaries are qualified in their entirety by the actual
documents. Copies of some of the documents referred to herein have been filed or
will be filed or incorporated by reference as exhibits to the registration
statement of which this prospectus is a part, and you may obtain copies of those
documents as described below under 'Where You Can Find More Information.'
The registration statement that contains this prospectus (including the
exhibits to the registration statement) contains additional information about us
and the securities offered under this prospectus. That registration statement
can be read at the SEC web site (www.sec.gov) or at the SEC offices mentioned
under the heading 'Where You Can Find More Information.'
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Such information may also be inspected
at The New York Stock Exchange, 20 Broad Street, New York, New York 10005. You
can also find information about us by visiting our website
3
at www.cit.com. We have included our web site address as an inactive textual
reference only. Information on our web site is not incorporated by reference
into and does not form a part of this prospectus.
The SEC allows us to incorporate by reference into this prospectus the
information we file with the SEC, which means that we can disclose important
information to you by referring you to those documents that have been filed with
the SEC. The information incorporated by reference is considered to be part of
this prospectus, and information that we file later with the SEC will
automatically update and supersede the previously filed information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), other than any portions
of the respective filings that were furnished, under applicable SEC rules,
rather than filed, until we complete our offerings of the securities registered
under this registration statement:
our Annual Report on Form 10-K for the year ended December 31, 2003;
our Definitive Proxy Statement filed with the SEC on April 5, 2004;
our Quarterly Report on Form 10-Q for the quarterly period ended March 31,
2004;
our Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2004;
our Current Reports on Form 8-K filed with the SEC on January 22, 2004,
April 22, 2004, July 22, 2004, August 17, 2004, September 9, 2004,
September 14, 2004, September 21, 2004 and October 21, 2004; and
the description of our common stock contained in Form 8-A filed on June
26, 2002, and any amendment or report filed under the Exchange Act for the
purpose of updating such description.
You may request a copy of these filings at no cost by writing or telephoning
us at the following address or phone number:
Glenn Votek
Executive Vice President and Treasurer
CIT Group Inc.
1 CIT Drive
Livingston, New Jersey 07039
(973) 740-5000
FORWARD-LOOKING STATEMENTS
This prospectus, prospectus supplements to this prospectus, the documents
incorporated by reference in this prospectus and other written reports and oral
statements made from time to time by the company may contain 'forward-looking
statements' within the meaning of the Securities Litigation Reform Act of 1995.
Forward-looking statements relate to expectations or forecasts of future events.
They use words such as 'anticipate,' 'believe,' 'could,' 'estimate,' 'expect,'
'forecast,' 'project,' 'intend,' 'plan,' 'potential,' 'will,' and other words
and terms of similar meaning in connection with a discussion of potential future
events, circumstances or future operating or financial performance. You can also
identify forward-looking statements by the fact that they do not relate strictly
to historical or current facts. Any forward-looking statements contained in this
prospectus, prospectus supplements to this prospectus and the documents
incorporated by reference in this prospectus are subject to 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 funding, borrowing costs and net finance margin;
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.
4
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.
Any or all of our forward-looking statements here or in other publications
may turn out to be wrong, and there are no guarantees about the performance of
the company. The company does not assume the obligation to update any
forward-looking statement for any reason.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere or incorporated by reference in this prospectus.
Because this is a summary, it may not contain all the information that is
important to you. You should read the entire prospectus and the applicable
prospectus supplement, including the information incorporated by reference,
before making an investment decision. As used in this prospectus, the terms 'CIT
Group Inc.,' 'CIT Group,' 'we,' 'us,' 'our' and 'the company' refer to CIT Group
Inc., unless the context clearly indicates otherwise.
CIT GROUP INC.
CIT Group Inc., a Delaware corporation, is a leading global commercial and
consumer finance company. Founded in 1908, we provide financing and leasing
capital for companies in a wide variety of industries, including many of today's
leading industries and emerging businesses. We offer factoring and vendor,
equipment, commercial, consumer and structured financing products.
We have broad access to customers and markets through our 'franchise'
businesses. Each business focuses on specific industries, asset types and
markets, with portfolios diversified by client, industry and geography. Managed
assets were $49.9 billion, owned financing and leasing assets were $41.5 billion
and stockholders' equity was $5.7 billion at June 30, 2004.
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. Our secured lending,
leasing and factoring products 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, conducted in our Specialty Finance
segment, consists primarily of home equity lending to consumers originated
largely through a network of brokers and correspondents.
5
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 work together in referring 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 origination volume and sell
certain finance receivables and equipment under operating leases to reduce
concentrations, for other balance sheet management purposes, or to improve
profitability.
-------------------
Our principal executive offices are located at 1 CIT Drive, Livingston, New
Jersey 07039. Our telephone number is (973) 740-5000.
USE OF PROCEEDS
Unless the applicable prospectus supplement indicates otherwise, we
currently intend to use the net proceeds from any sale of the offered securities
to provide additional working funds for us and our subsidiaries. Generally, we
use the proceeds from sales of our securities 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.
6
DESCRIPTION OF DEBT SECURITIES
This section contains a description of the general terms and provisions of
the debt securities that may be offered by this prospectus and to which any
prospectus supplement may relate. The particular terms of the debt securities
offered will be described in the applicable prospectus supplement. The
prospectus supplement relating to a series of debt securities being offered
pursuant to this prospectus will be attached to this prospectus.
We may issue senior debt securities and subordinated debt securities. The
senior debt securities are to be issued under an indenture (the 'senior
indenture') to be entered into between us and J.P. Morgan Trust Company,
National Association, as trustee, the form of which is filed as an exhibit to
the registration statement of which this prospectus forms a part. The
subordinated debt securities are to be issued under an indenture (the
'subordinated indenture') to be entered into between us and J.P. Morgan Trust
Company, National Association, as trustee, the form of which is filed as an
exhibit to the registration statement of which this prospectus forms a part. The
senior indenture and the subordinated indenture are sometimes referred to in
this prospectus collectively as the 'indentures' and each individually as an
'indenture.' The indentures may be supplemented from time to time.
This prospectus briefly outlines some of the indenture provisions. The
following summary of the material provisions of the indentures is qualified in
its entirety by the provisions of the indentures, including definitions of
certain terms used in the indentures. Wherever we refer to particular sections
or defined terms of the indentures, those sections or defined terms are
incorporated in this prospectus and the applicable prospectus supplement by
reference. You should review the indentures that are filed as exhibits to the
registration statement for additional information.
In addition, the material specific financial, legal and other terms as well
as federal income tax consequences particular to securities of each series will
be described in the prospectus supplement relating to the securities of that
series. The prospectus supplement may or may not modify the general terms found
in this prospectus and will be filed with the SEC. For a complete description of
the terms of a particular series of debt securities, you should read both this
prospectus and the prospectus supplement relating to that particular series.
GENERAL
The indenture provisions do not limit the amount of debt that we may issue
under the indentures or otherwise, and we may issue the securities in one or
more series with the same or various maturities, at par or a premium, or with
original issue discount.
Unless otherwise specified in the prospectus supplement, the debt securities
covered by this prospectus will be our direct unsecured obligations. Senior debt
securities will rank equally with our other unsecured and unsubordinated
indebtedness. Subordinated debt securities will be unsecured and subordinated in
right of payment to the prior payment in full of all of our unsecured and senior
indebtedness. See ' -- Subordination' below. Any of our secured indebtedness
will rank ahead of the debt securities to the extent of the assets securing such
indebtedness.
We conduct operations primarily through our subsidiaries and substantially
all of our consolidated assets are held by our subsidiaries. Accordingly, our
cash flow and our ability to meet our obligations under the debt securities will
be largely dependent on the earnings of our subsidiaries and the distribution or
other payment of these earnings to us in the form of dividends, loans or
advances and repayment of loans and advances from us. Our subsidiaries are
separate and distinct legal entities and have no obligation to pay the amounts
that will be due on our debt securities or to make any funds available for
payment of amounts that will be due on our debt securities. Because we are a
holding company, our obligations under our debt securities will be effectively
subordinated to all existing and future liabilities of our subsidiaries.
Therefore, our rights, and the rights of our creditors, including the rights of
the holders of the debt securities to participate in any distribution of assets
of any of our subsidiaries, if such subsidiary were to be liquidated or
reorganized, are subject to the prior claims of the subsidiary's creditors. To
the extent that we may be a creditor with recognized claims against our
subsidiaries, our claims will still be effectively subordinated to any security
interest in, or mortgages or other liens on, the assets of the subsidiary that
are senior to us.
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The prospectus supplement relating to any series of debt securities being
offered will include specific terms relating to the offering. These terms will
include, among other terms, some or all of the following, as applicable:
the title and series of such debt securities, which may include
medium-term notes;
the total principal amount of the series of debt securities and whether
there shall be any limit upon the aggregate principal amount of such debt
securities;
the date or dates, or the method or methods, if any, by which such date or
dates will be determined, on which the principal of the debt securities
will be payable;
the rate or rates at which such debt securities will bear interest, if
any, which rate may be zero in the case of certain debt securities issued
at an issue price representing a discount from the principal amount
payable at maturity, or the method by which such rate or rates will be
determined (including, if applicable, any remarketing option or similar
method), and the date or dates from which such interest, if any, will
accrue or the method by which such date or dates will be determined;
the date or dates on which interest, if any, on such debt securities will
be payable and any regular record dates applicable to the date or dates on
which interest will be so payable;
the place or places where the principal of or any premium or interest on
such debt securities will be payable, where any of such debt securities
that are issued in registered form may be surrendered for registration of
or transfer or exchange, and where any such debt securities may be
surrendered for conversion or exchange;
if such debt securities are to be redeemable at our option, the date or
dates on which, the period or periods within which, the price or prices at
which and the other terms and conditions upon which such debt securities
may be redeemed, in whole or in part, at our option;
provisions specifying whether we will be obligated to redeem or purchase
any of such debt securities pursuant to any sinking fund or analogous
provision or at the option of any holder of such debt securities and, if
so, the date or dates on which, the period or periods within which, the
price or prices at which and the other terms and conditions upon which
such debt securities will be redeemed or purchased, in whole or in part,
pursuant to such obligation, and any provisions for the remarketing of
such debt securities so redeemed or purchased;
if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which any debt securities to be issued in registered
form will be issuable and, if other than a denomination of $5,000, the
denominations in which any debt securities to be issued in bearer form
will be issuable;
provisions specifying whether the debt securities will be convertible into
other securities of CIT and/or exchangeable for securities of CIT or other
issuers and, if so, the terms and conditions upon which such debt
securities will be so convertible or exchangeable;
if other than the principal amount, the portion of the principal amount
(or the method by which such portion will be determined) of such debt
securities that will be payable upon declaration of acceleration of the
maturity thereof;
if other than U.S. dollars, the currency of payment, including composite
currencies, of the principal of, and any premium or interest on any of
such debt securities;
provisions specifying whether the principal of, and any premium or
interest on such debt securities will be payable, at the election of CIT
or a holder of debt securities, in a currency other than that in which
such debt securities are stated to be payable and the date or dates on
which, the period or periods within which, and the other terms and
conditions upon which, such election may be made;
any index, formula or other method used to determine the amount of
payments of principal of, any premium or interest on such debt securities;
provisions specifying whether such debt securities are to be issued in the
form of one or more global securities and, if so, the identity of the
depositary for such global security or securities;
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provisions specifying whether such debt securities are senior debt
securities or subordinated debt securities and, if subordinated debt
securities, the specific subordination provisions applicable thereto;
in the case of subordinated debt securities, provisions specifying the
relative degree, if any, to which such subordinated debt securities of the
series will be senior to or be subordinated in right of payment to other
series of subordinated debt securities or other indebtedness of CIT, as
the case may be, whether such other series of subordinated debt securities
or other indebtedness is outstanding or not;
any deletions from, modifications of or additions to the events of default
or covenants of CIT with respect to such debt securities;
terms specifying whether the provisions described below under
' -- Discharge; Defeasance and Covenant Defeasance' will be applicable to
such debt securities;
terms specifying whether any of such debt securities are to be issued upon
the exercise of warrants, and the time, manner and place for such debt
securities to be authenticated and delivered; and
any other terms of such debt securities and any other deletions from or
modifications or additions to the applicable indenture in respect of such
debt securities.
We will have the ability under the indentures to 'reopen' a previously
issued series of debt securities and issue additional debt securities of that
series or establish additional terms of that series. We also are permitted to
issue debt securities with the same terms as previously issued debt securities.
We may in the future issue debt securities other than the debt securities
described in this prospectus. There is no requirement that any other debt
securities that we issue be issued under the indentures described in this
prospectus. Thus, any other debt securities that we may issue may be issued
under other indentures or documentation containing provisions different from
those included in the indentures or applicable to one or more issues of the debt
securities described in this prospectus.
NEGATIVE PLEDGE
The indentures do not limit the amount of other securities that we or our
subsidiaries may issue. However, an indenture provision, which we refer to in
this prospectus as the 'Negative Pledge,' provides that we will not pledge or
otherwise subject any of our property or assets to any lien to secure
indebtedness for money borrowed that is incurred, issued, assumed or guaranteed
by us, subject to certain exceptions.
The terms of the Negative Pledge do nevertheless permit us to create:
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;
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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;
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.
In addition, under the indenture pursuant to which any of our senior
subordinated debt is issued, 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 June 30, 2004, we could
issue up to approximately $5.7 billion of additional senior subordinated
indebtedness.
CONSOLIDATION, MERGER OR SALE
Subject to the provisions of the Negative Pledge described above, we will
not be prevented from consolidating or merging with any other person or selling
our assets as, or substantially as, an entirety. However, we have agreed not to
consolidate with or merge into any other person or convey or transfer or lease
substantially all of our properties and assets to any person, unless, among
other things:
the successor entity (if other than the company) expressly assumes by a
supplemental indenture the due and punctual payment of the principal of,
and any premium and any interest on, all the debt securities then
outstanding and the performance and observance of every covenant in the
indenture that we would otherwise have to perform as if it were an
original party to the indenture; and
the person to which our properties and assets are sold expressly assumes,
as a part of the purchase price, by a supplemental indenture the due and
punctual payment of the principal of, and any premium and any interest on,
all the debt securities then outstanding and the performance and
observance of every covenant in the indenture that we would otherwise have
to perform as if it were an original party to the indenture.
The successor entity or purchaser of our properties and assets, as
applicable, will assume all our obligations under the indentures as if it were
an original party to such indentures. After assuming the obligations, the
successor entity will have all our rights and powers under such indentures.
EVENTS OF DEFAULT
An 'event of default' means any one of the following events that occurs with
respect to a series of debt securities issued under the indenture:
we fail to pay interest on any debt security of such series for 30 days
after payment was due;
we fail to make the principal or any premium payment on any debt security
of such series when due;
we fail to make any sinking fund payment or analogous obligation when due
in respect of any debt securities of such series;
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we fail to perform any other covenant in the indenture and this failure
continues for 30 days after we receive written notice of it (other than
any failure to perform in respect of a covenant included in the indenture
solely for the benefit of another series of debt securities);
any event of default shall have occurred in respect of our indebtedness
(including guaranteed indebtedness but excluding any subordinated
indebtedness), and, as a result, an aggregate principal amount exceeding
$25.0 million of such indebtedness is accelerated prior to its scheduled
maturity and such acceleration is not rescinded or annulled within 30 days
after we receive written notice; or
we or a court take certain actions relating to the bankruptcy, insolvency
or reorganization of our company.
A supplemental indenture or the form of security for a particular series of
debt securities may include additional events of default or changes to the
events of default described above. The events of default applicable to a
particular series of debt securities will be discussed in the prospectus
supplement relating to such series. Other than as specified above, a default
under our other indebtedness will not be a default under the indenture for the
debt securities covered by this prospectus, and a default under one series of
debt securities will not necessarily be a default under another series.
If an event of default with respect to outstanding debt securities of any
series occurs and is continuing, then the trustee or the holders of at least 25%
in principal amount of outstanding debt securities of that series may declare,
in a written notice, the principal amount (or specified amount) on all debt
securities of that series to be immediately due and payable. In the case of
certain events of bankruptcy or insolvency of CIT, all unpaid principal amount
(or specified amount) of and all accrued and unpaid interest on the outstanding
debt securities of such series shall automatically become immediately due and
payable.
The trustee may withhold notice to the holders of our debt securities of any
default (except for defaults that involve our failure to pay principal of,
premium, if any or interest, if any, or any sinking fund payment, if applicable,
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.
At any time after a declaration of acceleration with respect to debt
securities of any series has been made, the holders of a majority in principal
amount (or specified amount) of the outstanding debt securities of that series,
by written notice to us and the trustee, may rescind and annul such declaration
and its consequences if:
we have paid or deposited with the trustee a sum sufficient to pay overdue
interest and overdue principal other than the accelerated interest and
principal; and
we have cured or the holders have waived all events of default, other than
the non-payment of accelerated principal and interest with respect to debt
securities of that series, as provided in the indenture.
We refer you to the prospectus supplement relating to any series of debt
securities that are discount securities for the particular provisions relating
to acceleration of a portion of the principal amount of the discount securities
upon the occurrence of an event of default.
If a default in the performance or breach, of an indenture shall have
occurred and be continuing, the holders of not less than a majority in principal
amount of the outstanding securities of all series, by notice to the trustee,
may waive any past event of default or its consequences under the applicable
indenture. However, an event of default cannot be waived with respect to any
series of securities in the following two circumstances:
a failure to pay the principal of, and premium, if any, or interest on,
any security; or
a covenant or provision that cannot be modified or amended without the
consent of each holder of outstanding securities of that series.
Other than its duties in case of a default, the trustee is not obligated to
exercise any of its rights or powers under an indenture at the request, order or
direction of any holders, unless the holders offer the trustee reasonable
indemnity. If they provide this reasonable indemnity, the holders of a majority
in
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principal amount outstanding of any series of debt securities may, subject to
certain limitations, direct the time, method and place of conducting any
proceeding or any remedy available to the trustee, or exercising any power
conferred upon the trustee, for any series of debt securities.
We are required to deliver to the trustee an annual statement as to our
fulfillment of all of our obligations under each existing indenture.
MODIFICATION OF INDENTURE
The indenture provisions permit us and the trustee to amend, modify or
supplement an indenture and any supplemental indenture under which a series of
debt securities is issued. 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.
However, no modification of the maturity date or principal or interest
payment terms, no modification of the currency for payment, no impairment of the
right to sue for the enforcement of payment at the maturity of the debt
security, no modification of any conversion rights and no modification reducing
the percentage required for modifications or modifying the foregoing
requirements or reducing the percentage required to waive certain specified
covenants is effective against any holder without its consent. In addition, no
supplemental indenture shall adversely affect the rights of any holder of senior
indebtedness with respect to subordination without the consent of such holder.
In computing whether the holders of the requisite principal amount of
outstanding debt securities have taken action under an indenture or supplemental
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; and
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.
SUBORDINATION
The extent to which a particular series of subordinated debt securities may
be subordinated to our unsecured and unsubordinated indebtedness will be set
forth in the prospectus supplement for any such series and any indenture may be
modified by a supplemental indenture to reflect such subordination provisions.
PAYMENT AND TRANSFER
Unless otherwise specified in the related prospectus supplement, we will pay
principal, interest and any premium on fully registered securities at the place
or places designated by us for such purposes. We will make payment to the
persons in whose names the debt securities are registered on the close of
business on the day or days specified by us. Any other payments will be made as
set forth in the applicable prospectus supplement.
All paying agents initially designated by us with respect to payments on the
debt securities will be named in the related prospectus supplement. We may at
any time designate additional paying agents or rescind the designation of any
paying agent or approve a change in the office through which any paying agent
acts, except that we will be required to maintain a paying agent in each place
where the principal of and any premium or interest on any debt securities are
payable.
Unless otherwise provided in the related prospectus supplement, holders may
transfer or exchange debt securities at the corporate trust office of the
trustee or at any other office or agency maintained by us for such purposes. We
will not charge a service fee for any transfer or exchange of certificated
securities, but we may require payment of a sum sufficient to cover any stamp
tax or other governmental charge and any other reasonable expenses (including
fees and expenses of the trustee) that we are required to pay in connection with
a transfer or exchange.
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You may effect the transfer of certificated securities and the right to
receive the principal, premium and interest on certificated securities only by
surrendering the certificate representing those certificated securities and
either reissuance by us or the trustee of the certificate to the new holder or
the issuance by us or the trustee of a new certificate to the new holder.
We are not required to:
register the transfer of or exchange securities of any series during a
period beginning at the opening of business 15 days before the day we
transmit a notice of redemption of securities of the series selected for
redemption and ending at the close of business on the day of the
transmission; or
register the transfer of or exchange any security so selected for
redemption in whole or in part, except the unredeemed portion of any
security being redeemed in part.
All transfer agents initially designated by us will be named in the related
prospectus supplement. We may at any time rescind the designation of any
transfer agent or approve a change in the office through which any transfer
agent acts, except that we will be required to maintain a transfer agent in each
place where the principal of and any premium or interest on any debt securities
are payable.
We have initially appointed the trustee as security registrar, transfer
agent and paying agent for the debt securities.
GLOBAL SECURITIES
We may issue the global securities in either registered or bearer form, in
either temporary or permanent form. Where any debt securities of any series are
issued in bearer form, the restrictions and considerations applicable to such
debt securities and with respect to the payment, transfer and exchange of such
debt securities will be described in the related prospectus supplement. Debt
securities that are represented in whole or in part by one or more global
securities will be registered in the name of a depositary or its nominee
identified in the applicable prospectus supplement, and such global securities
will be deposited with, or on behalf of, the depositary. The applicable
prospectus supplement will describe the specific terms of the depositary
arrangement with respect to the applicable securities of that series. We
anticipate that the following provisions will apply to all depositary
arrangements.
Once a global security is issued, the depositary will credit on its
book-entry system the respective principal amounts of the individual securities
represented by that global security to the accounts of institutions that have
accounts with the depositary. These institutions are known as participants. The
underwriters for the securities will designate the accounts to be credited.
However, if we have offered or sold the securities either directly or through
agents, we or the agents will designate the appropriate accounts to be credited.
Ownership of beneficial interest in a global security will be limited to
participants or persons that may hold beneficial interests through participants.
Ownership of beneficial interest in a global security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the depositary's participants or persons that hold through participants. The
laws of some states require that certain purchasers of securities take physical
delivery of securities. Such limits and such laws may limit the market for
beneficial interests in a global security.
So long as the depositary for a global security, or its nominee, is the
registered owner of a global security, the depositary or nominee will be
considered the sole owner or holder of the securities represented by the global
security for all purposes under the indenture. Except as provided in the
applicable prospectus supplement, owners of beneficial interests in a global
security:
will not be entitled to have securities represented by global securities
registered in their names;
will not receive or be entitled to receive physical delivery of securities
in definitive form; and
will not be considered owners or holders of these securities under the
indenture.
Payments of principal, any premium and interest on the individual securities
registered in the name of the depositary or its nominee will be made to the
depositary or its nominee as the holder of that global security. Neither we nor
the trustee will have any responsibility or liability for any aspect of the
records
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relating to, or payments made on account of, beneficial ownership interests of a
global security, or for maintaining, supervising or reviewing any records
relating to beneficial ownership interests, and each of us and the trustee may
act or refrain from acting without liability on any information provided by the
depositary.
We expect that the depositary, after receiving any payment of principal, any
premium or interest in respect of a global security, will immediately credit the
accounts of the participants with payment in amounts proportionate to their
respective holdings in principal amount of beneficial interest in a global
security as shown on the records of the depositary. We also expect that payments
by participants to owners of beneficial interests in a global security will be
governed by standing customer instructions and customary practices, as is now
the case with securities held for the accounts of customers in bearer form or
registered in 'street name,' and will be the responsibility of such
participants.
Debt securities represented by a global security will be exchangeable for
debt securities in definitive form of like tenor in authorized denominations
only if the depositary notifies us that it is unwilling or unable to continue as
the depositary and a successor depositary is not appointed by us within 90 days
or we, in our discretion, determine not to require all of the debt securities of
a series to be represented by a global security and notify the trustee of our
decision.
DISCHARGE; DEFEASANCE AND COVENANT DEFEASANCE
We may discharge certain obligations to the holders of any debt securities
of any series that have not already been delivered to the trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) if we
deposit with the trustee, in trust, funds in the currency in which such debt
securities are payable in an amount sufficient to pay the entire indebtedness on
such debt securities with respect to principal and any premium and interest to
the date of such deposit (if such debt securities have then become due and
payable) or to the maturity date of such debt securities, as the case may be.
We also may, at our option, elect to:
discharge any and all of our obligations with respect to the debt
securities of such series, except for, among other things, our obligation
to register the transfer of or exchange such debt securities and to
maintain an office or agency with respect to such debt securities (which
we refer to in this prospectus as 'defeasance'); or
release ourselves from our obligation to comply with certain restrictive
covenants under the indenture, and to provide that any failure to comply
with such obligations shall not constitute a default or an event of
default with respect to such series of debt securities (which we refer to
in this prospectus as 'covenant defeasance').
Defeasance or covenant defeasance, as the case may be, shall be conditioned
upon the irrevocable deposit by us with the trustee, in trust, of an amount in
U.S. dollars or in the foreign currency in which such debt securities are
payable at stated maturity, or government obligations, or both, applicable to
such debt securities which, through the scheduled payment of principal and
interest in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any premium and interest on such debt
securities on the scheduled due dates.
Such trust may only be established if, among other things:
the applicable defeasance or covenant defeasance does not result in a
breach or violation of, or constitute a default under, the applicable
indenture or any other material agreement or instrument to which we are a
party or by which we are bound;
no event of default or event which with notice or lapse of time or both
would become and an event of default with respect to the debt securities
to be defeased shall have occurred and be continuing on the date of
establishment of such trust; and
we shall have delivered to the trustee an opinion of counsel to the effect
that the deposit and related defeasance or covenant defeasance, as the
case may be, would not cause the holders of the securities to recognize
income, gain or loss for U.S. federal income tax purposes.
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In the case of a defeasance, we must also deliver any ruling to such effect
received from or published by the United States Internal Revenue Service.
CONCERNING THE TRUSTEE
J.P. Morgan Trust Company, National Association, a national banking
association, will act as trustee under our senior indenture and our subordinated
indenture, as permitted by the terms thereof. At all times, the trustee must be
organized and doing business under the laws of the United States, any state
thereof or the District of Columbia, and must comply with all applicable
requirements under the Trust Indenture Act.
The trustee may resign at any time by giving us written notice or may be
removed:
by act of the holders of a majority in principal amount of a series of
outstanding debt securities; or
if it (i) fails to comply with the obligations imposed upon it under the
Trust Indenture Act; (ii) is not organized and doing business under the
laws of the United States, any state thereof or the District of Columbia;
(iii) becomes incapable of acting as trustee; or (iv) or a court takes
certain actions relating to bankruptcy, insolvency or reorganization.
If the trustee resigns, is removed or becomes incapable of acting, or if a
vacancy occurs in the office of the trustee for any cause, we, by or pursuant to
a board resolution, will promptly appoint a successor trustee or trustees with
respect to the debt securities of such series. We will give written notice to
holders of the relevant series of debt securities, of each resignation and each
removal of the trustee with respect to the debt securities of such series and
each appointment of a successor trustee. Upon the appointment of any successor
trustee, we, the retiring trustee and such successor trustee, will execute and
deliver a supplemental indenture in which each successor Trustee will accept
such appointment and which will contain such provisions as necessary or
desirable to transfer to such successor trustee all the rights, powers, trusts
and duties of the retiring trustee with respect to the relevant series of debt
securities.
The trustee may be contacted at the following address: J.P. Morgan Trust
Company, National Association, 611 Woodward Ave. 11th Floor Detroit, Michigan
48226. The form of senior indenture and the form of subordinated indenture are
filed as exhibits to this registration statement. Holders of any series of debt
securities may obtain an indenture or any other documents relating to a series
of debt securities by contacting us or the trustee or by accessing the SEC's web
site. See 'Where You Can Find More Information'.
J.P. Morgan Trust Company, National Association and certain of its
affiliates have in the past and may in the future provide banking, investment
and other services to us. A trustee under a senior indenture or a senior
subordinated indenture may act as trustee under any of our other indentures.
NEW YORK LAW TO GOVERN
The indentures will be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made or instruments entered
into and, in each case, performed in that state.
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DESCRIPTION OF CAPITAL STOCK
This section contains a description of our capital stock. The following
summary of the terms of our capital stock is not meant to be complete and is
qualified by reference to our certificate of incorporation, as amended, and our
by-laws, as amended, which are incorporated by reference as exhibits into the
registration statement of which this prospectus is a part.
As of June 30, 2004, our authorized capital stock consisted of:
(1) 600,000,000 shares of common stock, par value $0.01 per share, of which
212,092,592 were issued and 211,195,862 were outstanding, 896,730 were issued
and held in treasury; and (2) 100,000,000 shares of preferred stock, par value
$0.01 per share, none of which have been issued.
COMMON STOCK
Each share of our common stock entitles the holder thereof to one vote on
all matters, including the election of directors, and, except as otherwise
required by law or provided in any resolution adopted by our board of directors
with respect to any series of preferred stock, the holders of the shares of
common stock will possess all voting power. Our certificate of incorporation
does not provide for cumulative voting in the election of directors. Generally,
all matters to be voted on by the stockholders must be approved by a majority,
or, in the case of the election of directors, by a plurality, of the votes cast,
subject to state law and any voting rights granted to any of the holders of
preferred stock. Notwithstanding the foregoing, approval of the following three
matters requires the vote of holders of 66 2/3% of our outstanding capital stock
entitled to vote in the election of directors: (1) amending, repealing or
adopting of by-laws by the stockholders; (2) removing directors (which is
permitted for cause only); and (3) amending, repealing or adopting any provision
that is inconsistent with certain provisions of our certificate of
incorporation. The holders of common stock do not have any preemptive rights.
There are no subscription, redemption, conversion or sinking fund provisions
with respect to the common stock.
Subject to any preferential rights of any outstanding series of preferred
stock that our board of directors may create, from time to time, the holders of
common stock will be entitled to dividends as may be declared from time to time
by the board of directors from funds available therefor. Upon liquidation of
CIT, subject to the rights of holders of any preferred stock outstanding, the
holders of common stock will be entitled to receive our assets remaining after
payment of liabilities proportionate to their pro rata ownership of the
outstanding shares of common stock.
PREFERRED STOCK
Our board of directors has the authority, without further action of our
stockholders, to issue up to 100,000,000 shares of preferred stock, par value
$0.01 per share, in one or more series and to fix the powers, preferences,
rights and qualifications, limitations or restrictions thereof, including
dividend rights, conversion rights, voting rights, terms of redemption,
liquidation preferences and the number of shares constituting any series or the
designations of the series. The issuance of preferred stock could adversely
affect the holders of common stock. The potential issuance of preferred stock
may have the effect of discouraging, delaying or preventing a change of control
of CIT, may discourage bids for the common stock at a premium over market price
of the common stock and may adversely affect the market price of the common
stock. As of the date of this prospectus, we do not have any shares of preferred
stock outstanding, and we have no current plans to issue any shares of preferred
stock.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
We may elect to offer fractional shares of preferred stock rather than full
shares of preferred stock. In that event, we will issue receipts for depositary
shares, and each of these depositary shares will represent a fraction (to be set
forth in the applicable prospectus supplement) of a share of a particular series
of preferred stock.
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The shares of any series of preferred stock underlying the depositary shares
will be deposited under a deposit agreement between us and a bank or trust
company selected by us. The depositary will have its principal office in the
United States and a combined capital and surplus of at least $50,000,000.
Subject to the terms of the deposit agreement, each owner of a depositary
share will be entitled, in proportion to the applicable fraction of a share of
preferred stock underlying the depositary share, to all the rights and
preferences of the preferred stock underlying that depositary share. Those
rights may include dividend, voting, redemption, conversion and liquidation
rights.
The depositary shares will be evidenced by depositary receipts issued under
a deposit agreement. Depositary receipts will be distributed to those persons
purchasing the fractional shares of preferred stock underlying the depositary
shares, in accordance with the terms of the offering. The following description
of the material terms of the deposit agreement, the depositary shares and the
depositary receipts is only a summary, and you should refer to the forms of the
deposit agreement and depositary receipts that will be filed with the SEC in
connection with the offering of the specific depositary shares for more complete
information.
Pending the preparation of definitive engraved depositary receipts, the
depositary may, upon our written order, issue temporary depositary receipts
substantially identical to the definitive depositary receipts but not in
definitive form. These temporary depositary receipts entitle their holders to
all the rights of definitive depositary receipts. Temporary depositary receipts
will then be exchangeable for definitive depositary receipts at our expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions received with respect to the underlying stock to the record
holders of depositary shares in proportion to the number of depositary shares
owned by those holders.
If there is a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
that are entitled to receive the distribution, unless the depositary determines
that it is not feasible to make the distribution. If this occurs, the depositary
may, with our approval, sell the property and distribute the net proceeds from
the sale to the applicable holders.
WITHDRAWAL OF UNDERLYING PREFERRED STOCK
Unless we say otherwise in a prospectus supplement, holders may surrender
depositary receipts at the principal office of the depositary and, upon payment
of any unpaid amount due to the depositary, be entitled to receive the number of
whole shares of underlying preferred stock and all money and other property
represented by the related depositary shares. We will not issue any partial
shares of preferred stock. If the holder delivers depositary receipts evidencing
a number of depositary shares that represent more than a whole number of shares
of preferred stock, the depositary will issue a new depositary receipt
evidencing the excess number of depositary shares to that holder.
REDEMPTION OF DEPOSITARY SHARES
If a series of preferred stock represented by depositary shares is subject
to redemption, the depositary shares will be redeemed from the proceeds received
by the depositary resulting from the redemption, in whole or in part, of that
series of underlying stock held by the depositary. The redemption price per
depositary share will be equal to the applicable fraction of the redemption
price per share payable with respect to that series of underlying stock.
Whenever we redeem shares of underlying stock that are held by the depositary,
the depositary will redeem, as of the same redemption date, the number of
depositary shares representing the shares of underlying stock so redeemed. If
fewer than all the depositary shares are to be redeemed, the depositary shares
to be redeemed will be selected by lot or proportionately or by other equitable
method, as may be determined by the depositary.
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VOTING
Upon receipt of notice of any meeting at which the holders of the underlying
stock are entitled to vote, the depositary will mail the information contained
in the notice to the record holders of the depositary shares underlying the
preferred stock. Each record holder of the depositary shares on the record date
(which will be the same date as the record date for the underlying stock) will
be entitled to instruct the depositary as to the exercise of the voting rights
pertaining to the amount of the underlying stock represented by that holder's
depositary shares. The depositary will then try, as far as practicable, to vote
the number of shares of preferred stock underlying those depositary shares in
accordance with those instructions, and we will agree to take all reasonable
actions which may be deemed necessary by the depositary to enable the depositary
to do so. The depositary will not vote the underlying shares to the extent it
does not receive specific instructions with respect to the depositary shares
representing the preferred stock.
CONVERSION OR EXCHANGE OF PREFERRED STOCK
If the deposited preferred stock is convertible into or exchangeable for
other securities, the following will apply. The depositary shares, as such, will
not be convertible into or exchangeable for such other securities. Rather, any
holder of the depositary shares may surrender the related depositary receipts,
together with any amounts payable by the holder in connection with the
conversion or the exchange, to the depositary with written instructions to cause
conversion or exchange of the preferred stock represented by the depositary
shares into or for such other securities. If only some of the depositary shares
are to be converted or exchanged, a new depositary receipt or receipts will be
issued for any depositary shares not to be converted or exchanged.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time be amended by agreement
between us and the depositary. However, any amendment which materially and
adversely alters the rights of the holders of depositary shares will not be
effective unless the amendment has been approved by the holders of at least a
majority of the depositary shares then outstanding. The deposit agreement may be
terminated by us upon not less than 60 days' notice whereupon the depositary
shall deliver or make available to each holder of depositary shares, upon
surrender of the depositary receipts held by such holder, the number of whole or
fractional shares of preferred stock represented by such receipts. The deposit
agreement will automatically terminate if (a) all outstanding depositary shares
have been redeemed or converted into or exchanged for any other securities into
or for which the underlying preferred stock are convertible or exchangeable or
(b) there has been a final distribution of the underlying stock in connection
with our liquidation, dissolution or winding up and the underlying stock has
been distributed to the holders of depositary receipts.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will also pay
charges of the depositary in connection with its duties in accordance with the
deposit agreement. Holders of depositary receipts will pay transfer and other
taxes and governmental and other charges, including a fee for any permitted
withdrawal of shares of underlying stock upon surrender of depositary receipts,
as are expressly provided in the deposit agreement to be for their accounts.
REPORTS
The depositary will forward to holders of depositary receipts all reports
and communications from us that we deliver to the depositary and that we are
required to furnish to the holders of the underlying stock.
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LIMITATION ON LIABILITY
Neither we nor the depositary will be liable if either of us is prevented or
delayed by law or any circumstance beyond our control in performing our
respective obligations under the deposit agreement. Our obligations and those of
the depositary will be limited to performance in good faith of our respective
duties under the deposit agreement. Neither we nor the depositary will be
obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or underlying stock unless satisfactory indemnity is
furnished. We and the depositary may rely upon written advice of counsel or
accountants, or upon information provided by persons presenting underlying stock
for deposit, holders of depositary receipts or other persons believed to be
competent and on documents believed to be genuine.
In the event the depositary receives conflicting claims, requests or
instructions from any holders of depositary shares, on the one hand, and us, on
the other, the depositary will act on our claims, requests or instructions.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering notice to us of its
election to resign. We may remove the depositary at any time. Any resignation or
removal will take effect upon the appointment of a successor depositary and its
acceptance of the appointment. The successor depositary must be appointed within
60 days after delivery of the notice of resignation or removal and must be a
bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000.
DESCRIPTION OF WARRANTS
The following is a general description of the terms of the warrants we may
issue from time to time. This description is subject to the detailed provisions
of a warrant agreement to be entered into between us and a warrant agent we
select at the time of issue and the description in the prospectus supplement
relating to the applicable series of warrants.
GENERAL
We may issue warrants to purchase debt securities, preferred stock,
depositary shares, common stock or any combination thereof. Such warrants may be
issued independently or together with any such securities and may be attached or
separate from such securities. We may issue each series of warrants under a
separate warrant agreement to be entered into between a warrant agent and us.
The warrant agent will act solely as our agent and will not assume any
obligation or relationship of agency for or with holders or beneficial owners of
warrants.
A prospectus supplement will describe the particular terms of any series of
warrants we may issue, including the following:
the title of such warrants;
the aggregate number of such warrants;
the price or prices at which such warrants will be issued;
the currency or currencies, including composite currencies, in which the
price of such warrants may be payable;
the designation and terms of the securities purchasable upon exercise of
such warrants and the number of such securities issuable upon exercise of
such warrants;
the price at which and the currency or currencies, including composite
currencies, in which the securities purchasable upon exercise of such
warrants may be purchased;
the date on which the right to exercise such warrants shall commence and
the date on which such right will expire;
whether such warrants will be issued in registered form or bearer form;
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if applicable, the minimum or maximum amount of such warrants which may be
exercised at any one time;
if applicable, the designation and terms of the securities with which such
warrants are issued and the number of such warrants issued with each such
security;
if applicable, the date on and after which such warrants and the related
securities will be separately transferable;
information with respect to book-entry procedures, if any;
if applicable, a discussion of certain U.S. federal income tax
considerations; and
any other terms of such warrants, including terms, procedures and
limitations relating to the exchange and exercise of such warrants.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENT
We and the warrant agent may amend or supplement the warrant agreement for a
series of warrants without the consent of the holders of the warrants issued
thereunder to effect changes that are not inconsistent with the provisions of
the warrants and that do not materially and adversely affect the interests of
the holders of the warrants.
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DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The following is a general description of the terms of the stock purchase
contracts and stock purchase units we may issue from time to time.
The applicable prospectus supplement will describe the terms of any stock
purchase contracts or stock purchase units and, if applicable, prepaid stock
purchase contracts. The description in the prospectus supplement will be
qualified in its entirety by reference to (1) the stock purchase contracts, (2)
the collateral arrangements and depositary arrangements, if applicable, relating
to such stock purchase contracts or stock purchase units and (3) if applicable,
the prepaid stock purchase contracts and the document pursuant to which such
prepaid stock purchase contracts will be issued.
STOCK PURCHASE CONTRACTS
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and obligating us to sell to holders, a fixed or
varying number of common stock, preferred stock or depositary shares at a future
date or dates. The consideration per share of common stock, preferred stock or
depositary shares may be fixed at the time that the stock purchase contracts are
issued or may be determined by reference to a specific formula set forth in the
stock purchase contracts. Any stock purchase contract may include anti-dilution
provisions to adjust the number of shares issuable pursuant to such stock
purchase contract upon the occurrence of certain events.
STOCK PURCHASE UNITS
The stock purchase contracts may be issued separately or as a part of units
('stock purchase units'), consisting of a stock purchase contract and debt
securities, preferred securities or debt or equity obligations of third parties,
including U.S. Treasury securities, in each case securing holders' obligations
to purchase common stock, preferred stock or depositary shares under the stock
purchase contracts. The stock purchase contracts may require us to make periodic
payments to holders of the stock purchase units, or vice versa, and such
payments may be unsecured or prefunded and may be paid on a current or on a
deferred basis. The stock purchase contracts may require holders to secure their
obligations thereunder in a specified manner and in certain circumstances we may
deliver newly issued prepaid stock purchase contracts upon release to a holder
of any collateral securing such holder's obligations under the original stock
purchase contract. Any one or more of the above securities, common stock or the
stock purchase contracts or other collateral may be pledged as security for the
holders' obligations to purchase or sell, as the case may be, the common stock,
preferred stock or depositary shares under the stock purchase contracts. The
stock purchase contracts may also allow the holders, under certain
circumstances, to obtain the release of the security for their obligations under
such contracts by depositing with the collateral agent as substitute collateral
treasury securities with a principal amount at maturity equal to the collateral
so released or the maximum number of shares deliverable by such holders under
stock purchase contracts requiring the holders to sell common stock, preferred
stock or depositary shares to us.
PLAN OF DISTRIBUTION
We may sell the securities covered by this prospectus in any of the
following three ways (or in any combination):
through underwriters, dealers or remarketing firms;
directly to one or more purchasers, including to a limited number of
institutional purchasers; or
through agents.
Any such dealer or agent, in addition to any underwriter, may be deemed to
be an underwriter within the meaning of the Securities Act of 1933, as amended
(the 'Securities Act'). Any discounts or commissions received by an underwriter,
dealer, remarketing firm or agent on the sale or resale of securities may be
considered by the SEC to be underwriting discounts and commissions under the
Securities Act.
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In addition, we may enter into derivative transactions with third parties,
or sell securities not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement indicates, in
connection with such a transaction, the third parties may, pursuant to this
prospectus and the applicable prospectus supplement, sell securities covered by
this prospectus and the applicable prospectus supplement. If so, the third party
may use securities borrowed from us or others to settle such sales and may use
securities received from us to close out any related short positions. We may
also loan or pledge securities covered by this prospectus and the applicable
prospectus supplement to third parties, who may sell the loaned securities or,
in an event of default in the case of a pledge, sell the pledged securities
pursuant to this prospectus and the applicable prospectus supplement.
The terms of the offering of the securities with respect to which this
prospectus is being delivered will be set forth in the applicable prospectus
supplement and will include, among other things:
the type of and terms of the securities offered;
the price of the securities;
the proceeds to us from the sale of the securities;
the names of the securities exchanges, if any, on which the securities are
listed;
the name of any underwriter, dealer, remarketing firm or agent and the
amount of securities underwritten or purchased by each of them;
any over-allotment options under which underwriters may purchase
additional securities from us;
any underwriting discounts, agency fees or other compensation to
underwriters or agents; and
any discounts or concessions which may be allowed or reallowed or paid to
dealers.
If underwriters are used in the sale of securities, such securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more
underwriters acting alone. Unless otherwise set forth in the applicable
prospectus supplement, the obligations of the underwriters to purchase the
securities described in the applicable prospectus supplement will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all such securities if any are purchased by them. Any public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If dealers acting as principals are used in the sale of any securities, such
securities will be acquired by the dealers, as principals, and may be resold
from time to time in one or more transactions at varying prices to be determined
by the dealer at the time of resale. The name of any dealer and the terms of the
transaction will be set forth in the prospectus supplement with respect to the
securities being offered.
Securities may also be offered and sold, if so indicated in the applicable
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms, which we refer to herein as the 'remarketing firms,'
acting as principals for their own accounts or as our agents, as applicable. Any
remarketing firm will be identified and the terms of its agreement, if any, with
us and its compensation will be described in the applicable prospectus
supplement. Remarketing firms may be deemed to be underwriters, as that term is
defined in the Securities Act in connection with the securities remarketed
thereby.
The securities may be sold directly by us or through agents designated by us
from time to time. In the case of securities sold directly by us, no
underwriters or agents would be involved. Any agents involved in the offer or
sale of the securities in respect of which this prospectus is being delivered,
and any commissions payable by us to such agents, will be set forth in the
applicable prospectus supplement. Unless otherwise indicated in the applicable
prospectus supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
We may authorize agents, underwriters or dealers to solicit offers by
certain specified institutions to purchase the securities to which this
prospectus and the applicable prospectus supplement relates from us at the
public offering price set forth in the applicable prospectus supplement, plus,
if applicable, accrued
22
interest, pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Such contracts will be subject only
to those conditions set forth in the applicable prospectus supplement, and the
applicable prospectus supplement will set forth the commission payable for
solicitation of such contracts.
Agents, dealers, underwriters and remarketing firms may be entitled, under
agreements entered into with us to indemnification by us against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
to payments they may be required to make in respect thereof. Agents, dealers,
underwriters and remarketing firms may be customers of, engage in transactions
with, or perform services for us or our subsidiaries in the ordinary course of
business.
Unless otherwise indicated in the applicable prospectus supplement, all
securities offered by this prospectus, other than our common stock that is
listed on the New York Stock Exchange, will be new issues with no established
trading market. We may elect to list any series of securities on an exchange,
and, in the case of our common stock, on any additional exchange, but, unless
otherwise specified in the applicable prospectus supplement, we shall not be
obligated to do so. In addition, underwriters will not be obligated to make a
market in any securities. No assurance can be given regarding the activity of
trading in, or liquidity of, any securities.
Any underwriter may engage in over-allotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves sales in excess of the offering
size, which create a short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a selling concession
from a dealer when the securities originally sold by the dealer are purchased in
a covering transaction to cover short positions. Those activities may cause the
price of the securities to be higher than it would otherwise be. If commenced,
the underwriters may discontinue any of the activities at any time.
LEGAL MATTERS
Unless otherwise indicated in a supplement to this prospectus, the validity
of the securities will be passed upon for us by Shearman & Sterling LLP, New
York, New York.
EXPERTS
The consolidated balance sheets of CIT Group Inc. and its subsidiaries as of
December 31, 2003, December 31, 2002 and September 30, 2002 and the related
consolidated statements of income, stockholders' equity and cash flows for the
year ended December 31, 2003, 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 included in the
Current Report on Form 8-K dated September 21, 2004, 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 registered public accounting firm, given
on the authority of said firm as experts in auditing and accounting.
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________________________________________________________________________________
14,000,000 SHARES
6.350% NON-CUMULATIVE PREFERRED STOCK, SERIES A
[CIT LOGO]
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PROSPECTUS SUPPLEMENT
JULY 26, 2005
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GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
CITIGROUP
JPMORGAN
WACHOVIA SECURITIES
BEAR, STEARNS & CO. INC.
BNP PARIBAS
HSBC
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