CIT Reports First Quarter Results; Significant Progress on Liquidity Plan

Business Wire, April 17, 2008

* Charges for severance and related real estate exit activities totaled $69.1 million and reflects reductions of approximately 500 employees throughout the organization, as we continue to adjust to current market conditions and streamline certain processes. Expected annual savings from these actions are approximately $75 million, of which approximately $7 million was realized in the current quarter.

* Employee headcount totaled approximately 6,100 at March 31, 2008, down from 6,700 at December 31, 2007, and 7,500 a year ago.

Loss on Debt-related Derivative Extinguishments

* The pre-tax loss of $148.1 million is due to the discontinuation of hedge accounting for interest rate swaps hedging our commercial paper program. The swaps converted commercial paper, essentially a floating rate liability, to fixed rate for the funding of fixed rate assets with terms similar to the swaps. The loss resulted from declines in market interest rates since inception of the swaps. This loss had been previously reflected in other comprehensive income and therefore the loss had a negligible impact on shareholders' equity.

Income Tax Provision

* The effective tax rate of 55% for the quarter is the result of tax benefits generated by losses at high tax rates exceeding tax expense on income taxed at lower tax rates.

* The quarter results included $253.6 million of tax benefit related to the reported net loss for the home-lending and consumer lending segments, the loss on the interest rate swaps economically hedging the commercial paper program, and the valuation allowance related to asset-based lending commitments held for sale.

* Excluding these items and other noteworthy items, the effective tax rate is estimated to be approximately 20%, reflecting a higher proportion of international earnings.

Volume and Assets

* Total origination volumes, excluding factoring, declined from last quarter and last year as we have strategically limited new origination volumes to balance our liquidity goals with franchise value considerations. Origination volume in our commercial businesses for the quarter was $5.1 billion, down from $7.8 billion last quarter and $6.6 billion for the year ago quarter.

* Managed assets were up 2% from last quarter as the Company controlled balance sheet growth. The growth was primarily in the Corporate Finance segment, reflecting a modestly higher level of line utilization by clients, and the Consumer segment, reflecting the funding of existing commitments for government-guaranteed student loans. Managed assets are expected to be lower by the end of the second quarter as a result of our planned liquidity actions.

* Financing and leasing assets held for sale were $2.6 billion at March 31, 2008, up $1.0 billion from last quarter, and included approximately $500 million in commercial aircraft and $1.1 billion in revolving asset-based commercial loans with anticipated sales in conjunction with our planned liquidity measures.

Segment Results:

Corporate Finance

* Total net revenues (the sum of net finance revenue and other income) decreased from both prior year quarter and last quarter. The 10% increase in net finance revenue on higher asset levels over the last year quarter and the modest increase over last quarter was more than offset by lower other income. The declines in other income reflect a significantly lower level of loan sales and syndication activity.