CIT Reports First Quarter Results; Significant Progress on Liquidity Plan

Business Wire, April 17, 2008

First Quarter Net Loss of $257 Million, $1.35 per share

Commercial Businesses earn $0.82 per share excluding Noteworthy Items

Credit Loss Reserves Strengthened

Quarterly Dividend Reduced to $0.10 per share

NEW YORK -- CIT Group Inc. (NYSE: CIT) today announced a series of actions that demonstrate significant progress on the plans it announced on March 20, 2008 that improves its liquidity position. These actions include:

* Agreeing to sell $4.6 billion of asset-based loan commitments, of which $1.4 billion is currently drawn;

* Agreeing to sell $770 million of aircraft at a gain of approximately 10%, of which $300 million closed in the first quarter;

* Identifying another $2.0 billion of loan assets that will be either used for a secured financing or sold during the second quarter;

* Funding $335 million of first quarter commercial loan originations through CIT Bank;

* Engaging financial advisors to explore various capital raising initiatives including the possible issuance of equity securities and to evaluate strategic alternatives for the Company's $4 billion rail leasing business; and

* The declaration by the Board of Directors of a $0.10 per share quarterly dividend payable on May 30, 2008 to shareholders of record on May 15, 2008.

The combination of these actions, in addition to existing cash balances, materially enhances the Company's liquidity and significantly advances its plan to reduce the size of the balance sheet.

The Company reported a net loss of $257.2 million, or $1.35 per share, for the first quarter of 2008. Commercial segment earnings were more than offset by a combined net loss in our home lending and consumer lending segments, a non-cash charge related to terminated hedges, and severance costs. Net income was $200.6 million, or $1.01 of diluted earnings per share, for the comparable 2007 quarter.

"The prolonged and pervasive dislocation in the capital markets continued to present significant challenges for the financial services sector," said Jeffrey M. Peek, Chairman and CEO. "CIT's core commercial businesses performed well against this turbulent backdrop, with particularly strong results in Transportation and Trade Finance. Our overall loss for the quarter was driven largely by our liquidating consumer businesses. Given the need to continue to bolster our balance sheet and preserve capital, the Board of Directors has made the prudent but difficult decision to reduce the quarterly common stock dividend by 60% to $0.10 per share.

"The liquidity actions we announced today, coupled with the quality and breadth of our portfolio, provide us with increased flexibility to carry out future asset dispositions and evaluate funding and capital raising alternatives in a judicious manner. As we look ahead, it's clear we will operate a smaller, more nimble company that is competitively positioned to take advantage of both economic contractions and expansions. We are a recognized leader in the commercial middle market and remain committed to providing intellectual and financial capital to our customers."

The following table breaks down our reported results between our ongoing commercial businesses, liquidating consumer segments, and other noteworthy items:

[TABLE OMITTED]

Net income for Commercial Segments and Corporate was $156.9 million, down from $267.9 million in the prior year quarter and $368.8 million last quarter, reflecting lower finance margins, lower other income and higher credit costs.

The noteworthy items in the table above are comprised of the following:

* A lower of cost or market valuation allowance pretax charge of $117.5 million (decrease to EPS of $0.36) on assets held for sale in the Corporate Finance segment, reflecting the agreement to sell $4.6 billion of asset-based lending commitments of which $1.4 billion represents funded receivables that were classified as held for sale at March 31, 2008;

* A $33 million pretax impairment charge (decrease to EPS of $0.11), that should have been recorded concurrently with the 2007 fourth quarter sale of our Dell Financial Services joint venture equity interest, reflecting the repricing of debt cost underlying a securitization conduit vehicle in the Vendor Finance segment; the charge relates to the fourth quarter financial statements, as it was triggered by the buy out of CIT's joint venture equity in the fourth quarter of 2007;

* A pre-tax charge, in Corporate and other, of approximately $148 million related to losses on swaps that hedged the now inactive commercial paper program (decrease to EPS of $0.47) and were previously recorded in Other Comprehensive Income. An offsetting pre-tax gain of approximately $140 million on the termination of a corresponding amount of swaps with essentially offsetting economics was deferred and will be amortized over the remaining life of those terminated swaps;

* Pre-tax charges of $69 million, primarily reflecting costs associated with severance and termination expenses related to approximately 500 employees in corporate and other (decrease to EPS of $0.22); and