The transcript summarizes CIT's first quarter 2005 earnings conference call. CIT reported strong financial results for the quarter, with diluted EPS increasing 29% and the dividend increased by 3 cents per share. Key highlights included exceeding the target return on tangible equity, asset growth of over $5 billion for the quarter reaching $59 billion, and credit remaining strong. Looking ahead, CIT raised its full-year EPS growth target to 20% and return on tangible equity target to 16%, expecting continued improvements in profitability from expense reduction initiatives.
The document provides a transcript of a conference call held by CIT Group Inc. on July 20, 2005 to discuss the company's second quarter earnings results.
In the call, CIT's Chairman and CEO Jeff Peek highlights that it was the company's ninth consecutive quarter of earnings growth. He notes several positive metrics for the quarter including a 26% increase in diluted EPS and exceeding their return on tangible equity target of 16%. Peek also discusses strategic initiatives including acquisitions, portfolio sales, international expansion, and increased focus on sales.
The CFO Joe Leone then discusses operating expense management, noting expenses were up due to Student Loan Express but that ongoing initiatives are expected to provide $25 million in
- Morgan Stanley Dean Witter reported net income of $1.075 billion for Q1 2001, down 30% from $1.544 billion in Q1 2000. Diluted earnings per share were $0.94, down 30% from $1.34 in Q1 2000.
- Revenues decreased 14% to $6.385 billion due to difficult markets negatively impacting several businesses, though fixed income and equity trading performed well.
- Return on equity was 23% and the company remains focused on reducing expenses while maintaining client services in challenging market conditions.
The transcript summarizes a quarterly earnings call for CIT. During the call, CIT's Chairman and CEO Al Gamper provided an overview of each of CIT's business segments and their performance in the recent quarter. He noted several positives, such as improved credit quality and margins, as well as some negatives like continued softness in certain markets. CIT's new President and COO Jeff Peek then discussed his background and initial observations from visiting CIT locations. Finally, CIT's CFO Joe Leone reviewed the company's financial results, noting improved profitability across most segments.
Morgan Stanley Dean Witter reported record first quarter net income of $1.5 billion, up 49% from the previous year, with record net revenues of $7.4 billion. Earnings per share were up 52% to $1.34. The Securities division achieved net income of $1.24 billion, up 54%, driven by record results in equities trading, investment banking, and asset management. Asset Management reported a 48% increase in net income to $158 million, with record assets under management of $455 billion. Credit Services net income was up 15% to $142 million, with record transaction volumes and consumer loan balances.
Morgan Stanley reported first quarter net income of $848 million, down 21% from the previous year. Revenue was $5.3 billion, down 16% year-over-year. While costs were well-controlled, declining 17% from last quarter and 19% year-over-year, business continued to be slow in investment banking and retail securities. The company achieved a return on equity of 16% for the quarter.
JPMorgan Chase Second Quarter 2008 Financial Results Conference Callfinance2
JPMorgan Chase reported net income of $2.0 billion for Q2 2008, down 55% from the prior year. Earnings per share were $0.54. While several businesses saw growth, losses increased significantly in the mortgage and credit card portfolios, and markdowns were taken on leveraged loans and mortgage-related positions. The firm also completed its acquisition of Bear Stearns during the quarter.
The Bank of New York Mellon Fourth Quarter 2008 Financial Resultsearningsreport
The Bank of New York Mellon Corporation reported earnings per share of $0.05 for the fourth quarter of 2008, down from $0.61 in the fourth quarter of 2007. Revenue was impacted by $1.24 billion in securities write-downs due to deteriorating market conditions. Expenses were well-controlled despite a $181 million restructuring charge. The company maintained strong capital ratios with Tier 1 capital at 13.1% as of December 31, 2008.
Northrop Grumman reported third quarter 2008 results, including a 6% increase in sales to $8.4 billion and a 4% increase in earnings from continuing operations to $509 million compared to the third quarter of 2007. Earnings per share from continuing operations increased 6% to $1.50. Based on the strong results, Northrop Grumman raised its full year 2008 guidance for earnings from continuing operations to a range of $5.10 to $5.20 per share. New business awards totaled $11.5 billion, resulting in a record backlog of $70.1 billion.
The document provides a transcript of a conference call held by CIT Group Inc. on July 20, 2005 to discuss the company's second quarter earnings results.
In the call, CIT's Chairman and CEO Jeff Peek highlights that it was the company's ninth consecutive quarter of earnings growth. He notes several positive metrics for the quarter including a 26% increase in diluted EPS and exceeding their return on tangible equity target of 16%. Peek also discusses strategic initiatives including acquisitions, portfolio sales, international expansion, and increased focus on sales.
The CFO Joe Leone then discusses operating expense management, noting expenses were up due to Student Loan Express but that ongoing initiatives are expected to provide $25 million in
- Morgan Stanley Dean Witter reported net income of $1.075 billion for Q1 2001, down 30% from $1.544 billion in Q1 2000. Diluted earnings per share were $0.94, down 30% from $1.34 in Q1 2000.
- Revenues decreased 14% to $6.385 billion due to difficult markets negatively impacting several businesses, though fixed income and equity trading performed well.
- Return on equity was 23% and the company remains focused on reducing expenses while maintaining client services in challenging market conditions.
The transcript summarizes a quarterly earnings call for CIT. During the call, CIT's Chairman and CEO Al Gamper provided an overview of each of CIT's business segments and their performance in the recent quarter. He noted several positives, such as improved credit quality and margins, as well as some negatives like continued softness in certain markets. CIT's new President and COO Jeff Peek then discussed his background and initial observations from visiting CIT locations. Finally, CIT's CFO Joe Leone reviewed the company's financial results, noting improved profitability across most segments.
Morgan Stanley Dean Witter reported record first quarter net income of $1.5 billion, up 49% from the previous year, with record net revenues of $7.4 billion. Earnings per share were up 52% to $1.34. The Securities division achieved net income of $1.24 billion, up 54%, driven by record results in equities trading, investment banking, and asset management. Asset Management reported a 48% increase in net income to $158 million, with record assets under management of $455 billion. Credit Services net income was up 15% to $142 million, with record transaction volumes and consumer loan balances.
Morgan Stanley reported first quarter net income of $848 million, down 21% from the previous year. Revenue was $5.3 billion, down 16% year-over-year. While costs were well-controlled, declining 17% from last quarter and 19% year-over-year, business continued to be slow in investment banking and retail securities. The company achieved a return on equity of 16% for the quarter.
JPMorgan Chase Second Quarter 2008 Financial Results Conference Callfinance2
JPMorgan Chase reported net income of $2.0 billion for Q2 2008, down 55% from the prior year. Earnings per share were $0.54. While several businesses saw growth, losses increased significantly in the mortgage and credit card portfolios, and markdowns were taken on leveraged loans and mortgage-related positions. The firm also completed its acquisition of Bear Stearns during the quarter.
The Bank of New York Mellon Fourth Quarter 2008 Financial Resultsearningsreport
The Bank of New York Mellon Corporation reported earnings per share of $0.05 for the fourth quarter of 2008, down from $0.61 in the fourth quarter of 2007. Revenue was impacted by $1.24 billion in securities write-downs due to deteriorating market conditions. Expenses were well-controlled despite a $181 million restructuring charge. The company maintained strong capital ratios with Tier 1 capital at 13.1% as of December 31, 2008.
Northrop Grumman reported third quarter 2008 results, including a 6% increase in sales to $8.4 billion and a 4% increase in earnings from continuing operations to $509 million compared to the third quarter of 2007. Earnings per share from continuing operations increased 6% to $1.50. Based on the strong results, Northrop Grumman raised its full year 2008 guidance for earnings from continuing operations to a range of $5.10 to $5.20 per share. New business awards totaled $11.5 billion, resulting in a record backlog of $70.1 billion.
JPMorgan Chase First Quarter 2008 Financial Results Conference Call finance2
JPMorgan Chase reported net income of $2.4 billion for the first quarter of 2008, down 49% from $4.8 billion in the first quarter of 2007. Earnings per share were $0.68, down from $1.34 the previous year. The Investment Bank saw declines in revenue and increases in credit losses. Retail Financial Services increased revenue but also significantly increased its provision for credit losses due to deterioration in home equity and subprime portfolios. JPMorgan Chase maintained a strong capital position despite challenges in the market and credit environment.
Morgan Stanley reported second quarter net income of $797 million, down 14% from the previous year. Net revenues decreased 17% to $4.965 billion due to declines across most business segments. However, the company maintained a return on equity of 15% and benefited from strength in its Discover credit card segment. Going forward, Morgan Stanley will continue exercising expense discipline while serving client needs in challenging markets.
- Ameriprise Financial reported income before discontinued operations of $111 million for Q4 2005, down from $226 million in Q4 2004, primarily due to one-time separation costs.
- Adjusted earnings, which exclude one-time items, decreased 4% to $193 million compared to $202 million in Q4 2004, due to a lower tax provision in 2004. Revenues grew 5% to $1.9 billion.
- Key highlights included a 6% increase in mass affluent clients, higher advisor productivity, improved investment performance, and a 5% increase in owned, managed, and administered assets to over $428 billion.
Ameriprise Financial reported second quarter 2008 results, with net income increasing 7% year-over-year to $210 million. Earnings per share increased 15% to $0.93. Excluding realized losses and prior year separation costs, earnings per share increased 3% to $1.01. Total revenues declined 8% to $2.0 billion due to market depreciation. The company maintained a strong capital position and increased its quarterly dividend by 13%.
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J.P. Morgan Chase & Co. reported second quarter 2009 net income of $2.7 billion, up 36% from the prior year. Revenue was a record $27.7 billion. The Investment Bank reported record revenue for the first half of 2009, including record fees and fixed income markets revenue. Retail Financial Services saw higher revenue due to the Washington Mutual acquisition, but a higher provision for credit losses led to a net loss. JPMorgan maintained a strong capital position with Tier 1 capital of $122.2 billion after repaying $25 billion in TARP funds.
Bank of America reported third quarter 2005 results with the following key points:
1) Diluted EPS was up 12% year-over-year but down 4% quarter-over-quarter due to higher credit costs and lower securities gains.
2) Revenue grew 16% year-over-year and 4% quarter-over-quarter driven by strong growth across all business segments.
3) Credit costs increased from very low levels in previous quarters as charge-offs moved off recent lows.
FBR Capital Markets reported a net loss of $16.2 million for Q1 2009, compared to a net loss of $10.2 million in Q1 2008. Revenue was $49.7 million for Q1 2009. Institutional brokerage revenue increased to $39.7 million due to adding a convertible securities business in late 2008. Non-compensation expenses decreased 19% to $28.2 million from cost cutting. The company eliminated all debt and reduced balance sheet risk by selling its remaining mortgage backed securities holdings of $454.3 million.
CSC reported revenue growth of 5.1% in the first quarter of fiscal year 2005 compared to the same period last year. Revenue totaled $3.7 billion for the quarter. Net income was $110.4 million and earnings per share were $0.58. CSC saw growth in its European outsourcing and U.S. federal government businesses. The company's pipeline of federal opportunities over the next 20 months stands at around $33 billion. CSC announced $4.9 billion in new awards during the quarter from both commercial and government clients.
This document provides financial highlights and performance metrics for JPMorgan Chase & Co. for the second quarter of 2008. Some key details include:
- Net income was $2 billion, down 16% from the previous quarter and 53% from the same quarter last year.
- Total assets grew to $1.78 trillion, up 8% from the previous quarter.
- Total deposits declined slightly to $723 billion.
- The provision for credit losses was $3.5 billion, down 22% from the previous quarter due to higher loss rates.
- Black & Decker reported second quarter 2008 net earnings of $96.7 million or $1.58 per diluted share, down from $118 million or $1.75 per diluted share in second quarter 2007.
- Sales decreased 3% to $1.6 billion due to weakness in the US housing market and slowing conditions in parts of Europe, though currency translation provided a 5% boost.
- The company expects a mid-to-high single digit decline in organic sales for Q3 and full year 2008, and forecasts full-year EPS of $5.25-$5.45 excluding restructuring charges.
C-Suite Snacks Webinar Series: Reducing Risk and Cost in the Global Supply ChainCitrin Cooperman
This webinar discusses various strategies companies can use to reduce risk and costs in their global supply chains, particularly in light of increased tariffs. It outlines areas for companies to consider like leveraging free trade agreements, drawback programs, bonded warehousing, and foreign trade zones. It also discusses alternative sourcing, tariff engineering, and improved demand planning. The presentation aims to help companies assess opportunities to lower costs and mitigate tariff impacts through a collaborative cross-functional process.
- Total net revenue for JPMorgan Chase & Co. in the third quarter of 2009 was $26.6 billion, up 4% from the previous quarter and up 81% from the third quarter of 2008.
- Net income was $3.6 billion, up 32% from the third quarter of 2008.
- Earnings per share were $0.82, up 193% from the third quarter of 2008.
- Black & Decker reported first quarter 2008 net earnings of $67.4 million, down from $108.1 million in first quarter 2007, due to lower sales and higher costs. Excluding restructuring charges, earnings were $79.6 million.
- Sales decreased 5% to $1.5 billion due to a sharp decline in demand in North America, partly offset by strong growth in developing markets.
- The company expects a mid-to-high single digit decline in organic sales for the second quarter and full year and lowered its full-year earnings guidance.
Citigroup reported record net income of $15.28 billion for 2002, an 8% increase over 2001. Net income per share also rose 8% to $2.94. Core income for the year was a record $13.65 billion, or $2.63 per share. However, fourth quarter net income declined 37% to $2.43 billion due to a $1.55 billion legal settlement charge. Core income fell 32% to $2.44 billion. Revenue grew 7% for the full year to $75.76 billion but was flat in the fourth quarter at $18.93 billion.
Citigroup reported quarterly financial results, with net income of $3.92 billion for 3Q 2002, a 23% increase over 3Q 2001. Core income, which excludes certain items, was $3.79 billion for 3Q 2002, up 17% from the prior year. Diluted earnings per share on net income were $0.76 for the quarter, rising 25% year-over-year, while diluted EPS on core income increased 19% to $0.74. Citigroup operates as a global financial services company with over 200 million customer accounts in more than 100 countries.
The document provides highlights from Rohm and Haas' 2002 annual report. It discusses Rohm and Haas' positive working relationship with Jacobs that has enabled fast-track projects around the world. It also provides selected financial highlights showing increases in revenues, net earnings, assets, and backlog from 2000 to 2002. The report discusses the company's strategic growth through acquisitions, integration of acquired companies, and debt reduction. Market conditions and outlook are also summarized for various industries.
The earnings call transcript summarizes CIT's financial results for the fourth quarter and full year of 2004. Key highlights included core earnings per share of $0.91 for Q4, a return on tangible equity of 14.5%, and strong new business volume growth of 32% for Q4 and 16% for the full year. The CEO discussed progress on strategic initiatives around capital discipline, growth culture, and profitability. Business units reported increased volumes and improving credit trends. The CFO provided additional details on drivers of the financial results.
CIT Group reported financial results for the third quarter of 2005 with improvements across key metrics. Earnings per share were up 23% from the prior year due to higher margins, new business volume growth of 34%, and lower net charge-offs. Return on tangible common equity rose to 17%. However, results included gains and losses from various portfolio activities and hurricane provisions. Overall, the company exceeded targets and expects continued momentum.
- CIT reported increased net income of $136.9 million or $0.65 per share for Q2 2003, up from $127 million or $0.60 per share in Q1 2003. Return on tangible equity increased to 11.6%.
- Key metrics improved including credit quality, net finance margin, cost of funds, and repayment of outstanding bank lines. Origination volume excluding factoring was up 12% from last quarter.
- 60+ day delinquency and non-performing assets declined from last quarter across most business units. Total charge-offs were $108.4 million compared to $114.3 million in Q1 2003.
- Each business segment reported increased or stable
CIT reported diluted EPS of $0.82 for Q2 2004, up 26% from the prior year. Net income was $176.6 million for Q2, up from $136.9 million in Q2 2003. Return on tangible equity increased to 13.7% from 11.6% the prior year. Credit performance continued to improve with lower delinquencies, non-performing assets, and charge-offs across all segments. Net finance margin improved to 3.99% due to lower borrowing costs.
CIT Group Inc. reported strong financial results for Q3 2004, with diluted EPS up 25% from the prior year. Key highlights included portfolio assets growing 13% year-over-year to $44.4 billion, return on tangible equity increasing to 14.1%, and credit quality strengthening further as delinquencies and charge-offs declined. Management commented that the results reflected brisk business conditions and solid performance across all business segments.
This document is CIT Group's quarterly report filed with the SEC for the quarter ended September 30, 2005. It includes consolidated financial statements such as the balance sheet, income statement, and cash flow statement. Some highlights include:
- Total assets increased to $60.2 billion as of 9/30/2005 from $51.1 billion as of 12/31/2004.
- Net income for the first nine months of 2005 was $1.04 billion, up from $916 million in the same period of 2004.
- Revenue from financing and leasing activities was $3.28 billion for the first nine months of 2005, up from $2.76 billion in the same period of 2004
JPMorgan Chase First Quarter 2008 Financial Results Conference Call finance2
JPMorgan Chase reported net income of $2.4 billion for the first quarter of 2008, down 49% from $4.8 billion in the first quarter of 2007. Earnings per share were $0.68, down from $1.34 the previous year. The Investment Bank saw declines in revenue and increases in credit losses. Retail Financial Services increased revenue but also significantly increased its provision for credit losses due to deterioration in home equity and subprime portfolios. JPMorgan Chase maintained a strong capital position despite challenges in the market and credit environment.
Morgan Stanley reported second quarter net income of $797 million, down 14% from the previous year. Net revenues decreased 17% to $4.965 billion due to declines across most business segments. However, the company maintained a return on equity of 15% and benefited from strength in its Discover credit card segment. Going forward, Morgan Stanley will continue exercising expense discipline while serving client needs in challenging markets.
- Ameriprise Financial reported income before discontinued operations of $111 million for Q4 2005, down from $226 million in Q4 2004, primarily due to one-time separation costs.
- Adjusted earnings, which exclude one-time items, decreased 4% to $193 million compared to $202 million in Q4 2004, due to a lower tax provision in 2004. Revenues grew 5% to $1.9 billion.
- Key highlights included a 6% increase in mass affluent clients, higher advisor productivity, improved investment performance, and a 5% increase in owned, managed, and administered assets to over $428 billion.
Ameriprise Financial reported second quarter 2008 results, with net income increasing 7% year-over-year to $210 million. Earnings per share increased 15% to $0.93. Excluding realized losses and prior year separation costs, earnings per share increased 3% to $1.01. Total revenues declined 8% to $2.0 billion due to market depreciation. The company maintained a strong capital position and increased its quarterly dividend by 13%.
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J.P. Morgan Chase & Co. reported second quarter 2009 net income of $2.7 billion, up 36% from the prior year. Revenue was a record $27.7 billion. The Investment Bank reported record revenue for the first half of 2009, including record fees and fixed income markets revenue. Retail Financial Services saw higher revenue due to the Washington Mutual acquisition, but a higher provision for credit losses led to a net loss. JPMorgan maintained a strong capital position with Tier 1 capital of $122.2 billion after repaying $25 billion in TARP funds.
Bank of America reported third quarter 2005 results with the following key points:
1) Diluted EPS was up 12% year-over-year but down 4% quarter-over-quarter due to higher credit costs and lower securities gains.
2) Revenue grew 16% year-over-year and 4% quarter-over-quarter driven by strong growth across all business segments.
3) Credit costs increased from very low levels in previous quarters as charge-offs moved off recent lows.
FBR Capital Markets reported a net loss of $16.2 million for Q1 2009, compared to a net loss of $10.2 million in Q1 2008. Revenue was $49.7 million for Q1 2009. Institutional brokerage revenue increased to $39.7 million due to adding a convertible securities business in late 2008. Non-compensation expenses decreased 19% to $28.2 million from cost cutting. The company eliminated all debt and reduced balance sheet risk by selling its remaining mortgage backed securities holdings of $454.3 million.
CSC reported revenue growth of 5.1% in the first quarter of fiscal year 2005 compared to the same period last year. Revenue totaled $3.7 billion for the quarter. Net income was $110.4 million and earnings per share were $0.58. CSC saw growth in its European outsourcing and U.S. federal government businesses. The company's pipeline of federal opportunities over the next 20 months stands at around $33 billion. CSC announced $4.9 billion in new awards during the quarter from both commercial and government clients.
This document provides financial highlights and performance metrics for JPMorgan Chase & Co. for the second quarter of 2008. Some key details include:
- Net income was $2 billion, down 16% from the previous quarter and 53% from the same quarter last year.
- Total assets grew to $1.78 trillion, up 8% from the previous quarter.
- Total deposits declined slightly to $723 billion.
- The provision for credit losses was $3.5 billion, down 22% from the previous quarter due to higher loss rates.
- Black & Decker reported second quarter 2008 net earnings of $96.7 million or $1.58 per diluted share, down from $118 million or $1.75 per diluted share in second quarter 2007.
- Sales decreased 3% to $1.6 billion due to weakness in the US housing market and slowing conditions in parts of Europe, though currency translation provided a 5% boost.
- The company expects a mid-to-high single digit decline in organic sales for Q3 and full year 2008, and forecasts full-year EPS of $5.25-$5.45 excluding restructuring charges.
C-Suite Snacks Webinar Series: Reducing Risk and Cost in the Global Supply ChainCitrin Cooperman
This webinar discusses various strategies companies can use to reduce risk and costs in their global supply chains, particularly in light of increased tariffs. It outlines areas for companies to consider like leveraging free trade agreements, drawback programs, bonded warehousing, and foreign trade zones. It also discusses alternative sourcing, tariff engineering, and improved demand planning. The presentation aims to help companies assess opportunities to lower costs and mitigate tariff impacts through a collaborative cross-functional process.
- Total net revenue for JPMorgan Chase & Co. in the third quarter of 2009 was $26.6 billion, up 4% from the previous quarter and up 81% from the third quarter of 2008.
- Net income was $3.6 billion, up 32% from the third quarter of 2008.
- Earnings per share were $0.82, up 193% from the third quarter of 2008.
- Black & Decker reported first quarter 2008 net earnings of $67.4 million, down from $108.1 million in first quarter 2007, due to lower sales and higher costs. Excluding restructuring charges, earnings were $79.6 million.
- Sales decreased 5% to $1.5 billion due to a sharp decline in demand in North America, partly offset by strong growth in developing markets.
- The company expects a mid-to-high single digit decline in organic sales for the second quarter and full year and lowered its full-year earnings guidance.
Citigroup reported record net income of $15.28 billion for 2002, an 8% increase over 2001. Net income per share also rose 8% to $2.94. Core income for the year was a record $13.65 billion, or $2.63 per share. However, fourth quarter net income declined 37% to $2.43 billion due to a $1.55 billion legal settlement charge. Core income fell 32% to $2.44 billion. Revenue grew 7% for the full year to $75.76 billion but was flat in the fourth quarter at $18.93 billion.
Citigroup reported quarterly financial results, with net income of $3.92 billion for 3Q 2002, a 23% increase over 3Q 2001. Core income, which excludes certain items, was $3.79 billion for 3Q 2002, up 17% from the prior year. Diluted earnings per share on net income were $0.76 for the quarter, rising 25% year-over-year, while diluted EPS on core income increased 19% to $0.74. Citigroup operates as a global financial services company with over 200 million customer accounts in more than 100 countries.
The document provides highlights from Rohm and Haas' 2002 annual report. It discusses Rohm and Haas' positive working relationship with Jacobs that has enabled fast-track projects around the world. It also provides selected financial highlights showing increases in revenues, net earnings, assets, and backlog from 2000 to 2002. The report discusses the company's strategic growth through acquisitions, integration of acquired companies, and debt reduction. Market conditions and outlook are also summarized for various industries.
The earnings call transcript summarizes CIT's financial results for the fourth quarter and full year of 2004. Key highlights included core earnings per share of $0.91 for Q4, a return on tangible equity of 14.5%, and strong new business volume growth of 32% for Q4 and 16% for the full year. The CEO discussed progress on strategic initiatives around capital discipline, growth culture, and profitability. Business units reported increased volumes and improving credit trends. The CFO provided additional details on drivers of the financial results.
CIT Group reported financial results for the third quarter of 2005 with improvements across key metrics. Earnings per share were up 23% from the prior year due to higher margins, new business volume growth of 34%, and lower net charge-offs. Return on tangible common equity rose to 17%. However, results included gains and losses from various portfolio activities and hurricane provisions. Overall, the company exceeded targets and expects continued momentum.
- CIT reported increased net income of $136.9 million or $0.65 per share for Q2 2003, up from $127 million or $0.60 per share in Q1 2003. Return on tangible equity increased to 11.6%.
- Key metrics improved including credit quality, net finance margin, cost of funds, and repayment of outstanding bank lines. Origination volume excluding factoring was up 12% from last quarter.
- 60+ day delinquency and non-performing assets declined from last quarter across most business units. Total charge-offs were $108.4 million compared to $114.3 million in Q1 2003.
- Each business segment reported increased or stable
CIT reported diluted EPS of $0.82 for Q2 2004, up 26% from the prior year. Net income was $176.6 million for Q2, up from $136.9 million in Q2 2003. Return on tangible equity increased to 13.7% from 11.6% the prior year. Credit performance continued to improve with lower delinquencies, non-performing assets, and charge-offs across all segments. Net finance margin improved to 3.99% due to lower borrowing costs.
CIT Group Inc. reported strong financial results for Q3 2004, with diluted EPS up 25% from the prior year. Key highlights included portfolio assets growing 13% year-over-year to $44.4 billion, return on tangible equity increasing to 14.1%, and credit quality strengthening further as delinquencies and charge-offs declined. Management commented that the results reflected brisk business conditions and solid performance across all business segments.
This document is CIT Group's quarterly report filed with the SEC for the quarter ended September 30, 2005. It includes consolidated financial statements such as the balance sheet, income statement, and cash flow statement. Some highlights include:
- Total assets increased to $60.2 billion as of 9/30/2005 from $51.1 billion as of 12/31/2004.
- Net income for the first nine months of 2005 was $1.04 billion, up from $916 million in the same period of 2004.
- Revenue from financing and leasing activities was $3.28 billion for the first nine months of 2005, up from $2.76 billion in the same period of 2004
The earnings call transcript summarizes CIT's financial results for the fourth quarter and full year of 2004. CIT reported strong results, with core earnings per share of $0.91 for the quarter, up from $0.75 the previous year. Return on tangible equity increased to 14.5% compared to 13.1% the prior year. Several of CIT's business units performed well, including Factoring, Equipment Finance, and Specialty Finance. However, total operating expenses were higher than expected, and CIT aims to improve operational efficiency in 2005. The call also provided an overview of CIT's strategic initiatives and recent acquisitions.
The quarterly earnings call for CIT discussed their strong second quarter results. Key highlights included record origination volume of $8 billion, exceeding their target return on tangible equity of 16% with a result of 16.3%, and raising full year earnings per share growth guidance to exceed 20%. CIT also discussed ongoing initiatives around portfolio optimization, acquisitions, international expansion, sales force growth, and expense management to further improve performance.
The document is a transcript of a conference call by CIT Group discussing their third quarter earnings results. In the call, CIT executives report that earnings per share increased 23% year-over-year. They also exceeded their target return on tangible equity of 16% for the quarter. CIT saw strong origination volume growth of 34% compared to the previous year. However, operating efficiency did not improve during the quarter, which executives said they would focus on addressing.
CIT delivered a solid fourth quarter and year-end results. Key accomplishments in 2005 included realigning the business around more attractive sectors, focusing on client needs through industry-specific teams, and improving productivity. The fourth quarter saw record loan originations, asset growth, and continued strong credit quality. Looking ahead, management is focused on high-return sectors and improving profitability.
CIT delivered a solid fourth quarter and year-end results. Key accomplishments in 2005 included realigning the business around more attractive sectors, focusing on client needs through industry-specific teams, and improving productivity. The fourth quarter saw record loan originations, asset growth, and continued strong credit quality. Looking ahead, management is focused on high-return sectors and improving profitability.
The document is a transcript of a CIT earnings call from July 22, 2004. In the call, Al Gamper, then CEO of CIT, discusses CIT's strong financial performance and progress over the last two years, including improvements to credit quality and returns. He expresses confidence that CIT will continue to improve under the new leadership of Jeff Peek, to whom he is handing over leadership, while noting that CIT has not yet peaked in its potential for growth. Jeff Peek then thanks Al Gamper for his leadership and accomplishments in building CIT.
1) CIT reported strong third quarter earnings and growth, with ROE reaching 14.1%, near its target of 15%.
2) Several new initiatives were launched across business units aimed at increasing collaboration, sales, and diversity.
3) Business volumes grew across most segments, with managed assets up over 5% from last quarter, though expenses remained stubbornly high.
The document is a transcript of CIT's first quarter 2004 earnings call. In the call, CIT executives discuss the company's financial results and business performance for the quarter. Key points include:
- CIT delivered a solid start to 2004 with improved margins and continued credit quality improvements. Return on equity was 13% for the quarter.
- Most business units saw increased new business volumes and asset growth compared to the prior year quarter. Specialty Finance announced an acquisition that closed in the second quarter.
- While Equipment Finance and Aerospace still face challenges, fundamentals are improving in their end markets. Expenses were slightly higher than expected for the quarter.
- Executives expressed confidence that positive
This transcript summarizes a conference call by CIT Group Inc. regarding the sale of its Home Lending business.
1) CIT is selling its entire Home Lending portfolio, including loans, real estate owned, and servicing operations, to two buyers - Lone Star Funds and Vanderbilt Mortgage and Finance.
2) The sale price is $1.8 billion in cash, representing around $0.63-$0.64 on the dollar of unpaid principal balance.
3) CIT expects to record a pre-tax loss of around $2.5 billion on the sale in the second quarter, consisting of ongoing losses in the business plus a loss on the sale. The
The document provides details of PAX Global's 2020 interim earnings call, including financial highlights and Q&A. Key points include:
- Revenue increased 7.4% driven by overseas growth, with gross and operating margins up as well.
- Receivables impairments included provisions for some APAC and US customers, including less than $10 million related to Wirecard.
- Financial targets for 2020 were maintained or increased despite COVID-19 uncertainties, aiming for flat revenue growth but higher gross and operating margins.
- Questions from analysts focused on conservative 2020 targets implying a weaker second half, and details on receivables impairments.
This document is the transcript of Aon Corporation's second-quarter 2008 earnings conference call. The call discusses Aon's financial performance in the second quarter of 2008, with an emphasis on organic revenue growth, adjusted pretax margin, and adjusted earnings per share. Aon's CEO notes that the company achieved progress on all three metrics despite soft market conditions. The transcript also covers Aon's continued investments in areas like retail brokerage, reinsurance, and consulting to strengthen its client capabilities globally.
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CIT Group reported their first quarter 2008 earnings. The CEO discussed strategic actions taken to improve liquidity including reducing staff by over 500 employees, selling over $5.5 billion in assets, cutting the dividend by 60%, exploring strategic alternatives for the rail business, and continuing discussions to secure additional liquidity and capital. While the commercial finance franchises performed respectably, provisions were taken for the home lending and student lending portfolios due to housing market declines. The CEO believes strategic actions taken will enhance shareholder value and position the company for the future.
CIT Group reported earnings for the first quarter of 2008. The commercial finance divisions performed well with a combined return on equity of 12%, however losses from the home lending and student loan portfolios contributed to an overall loss for the company. CIT outlined plans to reduce assets by $5-7 billion through sales, cut the dividend, explore strategic options for the rail division, and pursue additional liquidity and capital. Management remains focused on the core commercial finance businesses and serving customers during this challenging time.
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Virgin Media reported its financial results for the first quarter of 2007. Key highlights include:
1) Strong growth in broadband, TV and mobile contract customers due to compelling offers and marketing campaigns promoting bundled services. However, fixed line customers continued to decline due to increased competition.
2) ARPU was slightly down due to lower fixed line usage, but triple play penetration and Old NTL ARPU increased, pointing to continued ARPU growth.
3) Customer churn improved to 1.6% due to more rigorous credit policies and efficient sales channels, while Sky basics had a minimal impact in Q1.
4) Mobile contract growth remained strong through cable cross-sell, while pre-pay declined season
This document summarizes Virgin Media's performance in the first quarter of 2007. It discusses Virgin Media's progress on key priorities such as brand strength, targeting competitors, cable integration, and cross-sell opportunities. Financial metrics like revenue, customer additions and disconnects, and ARPU are also reviewed. Challenges from increased competition and the impact of Sky's new "Basics" package are addressed.
This document provides a summary of Virgin Media's financial performance in the second quarter of 2007. It discusses declines in revenue due to customer churn related to the loss of Sky basics channels, but notes improving trends in areas like TV and broadband. Key points highlighted include strong growth in video on demand usage, successful bundling of products, expansion of high speed broadband services, and continued strength in the mobile business. The summary also previews upcoming content initiatives and their potential to further drive customer growth and engagement.
This document summarizes Virgin Media's financial performance in the second quarter of 2007. Key points include: losses of Sky basic channels impacted customer churn but TV performance was better than expected; strong mobile contract sales and bundling of products continued; and while ARPU was affected by retention activities, cash flow outlook remains strong. The document provides details on customer additions and disconnects, growth of triple play bundling, and increases in video on demand usage.
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This document provides a summary of Virgin Media's financial results for the third quarter of 2007. It discusses improvements in customer and revenue growth metrics compared to previous quarters. Specifically, it notes record quarterly gross additions and reduced churn. It also summarizes growth in the company's broadband, TV, telephony, mobile, and business services segments. The document concludes with discussions of operating cash flow, revenue, and net debt levels.
The document summarizes an UBS media conference by Acting CEO Neil Berkett of Virgin Media on December 5, 2007. Berkett discussed Virgin Media's transformation through integration, re-engineering growth initiatives. He highlighted opportunities in premium TV, basic pay-TV, free DTV and contract mobile. Berkett also outlined Virgin Media's network advantages in speed and reach, and strategies to increase customer value through volume, ARPU and tenure. Mobile was discussed as an important driver of consumer value through cross-selling. Valuable tax assets were also noted.
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This document provides a summary of Virgin Media's financial and operational results for the first quarter of 2008. Key highlights include continued strong growth in broadband and TV customers, record-low cable churn of 1.2%, and stable cable ARPU despite non-recurring benefits in the previous quarter. OCF increased slightly compared to last quarter. Capex remained high at 13.7% of revenue to support network upgrades including faster broadband speeds. Revenue declined slightly due to seasonal factors in certain business units.
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Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
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Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
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A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
An accounting information system (AIS) refers to tools and systems designed for the collection and display of accounting information so accountants and executives can make informed decisions.
1. CIT
Moderator: Valerie Gerard
01-19-05/10:00 am CT
Confirmation # 3102269
Page 1
The following transcript has been provided by a third party transcription
service for informational purposes only. The transcript has been reviewed
and edited by CIT and in our opinion is the best interpretation of the
statements made on the call. The actual conference call may have differed
slightly.
CIT
Moderator: Valerie Gerard
April 20, 2005
11:00 am EDT
Operator: Good afternoon. My name is Michelle and I will be your conference
facilitator. At this time I would like to welcome everyone to the CIT first
quarter 2005 earnings conference call.
All lines have been placed on mute to prevent any background noise. After
the speaker’s remarks, there will be a question and answer period. If you
would like to ask a question during this time, simply press star then the
number 1 on your telephone keypad. If you would like to withdraw your
question, press star then the number 2 on your telephone keypad.
Thank you. Miss Gerard, you may begin your conference.
Valerie Gerard: Thanks very much Michelle and good morning everyone. Welcome. We’re
delighted that you’re here with us this morning to talk about the results for the
quarter.
After our formal remarks by Jeff Peek, our CEO and Joe Leone, our CFO, we
will move into our standard Q&A session. One housekeeping item to note,
we are pleased to announce that CIT investor day for 2005 will be held on
Tuesday, November 8 in New York City. Mark your calendars. Details to
come.
Now as you know, elements of this call are forward-looking in nature and
relate only to the time and date of this call. We expressly disclaim any duty to
update these statements based on new information, future events or otherwise.
For information about risk factors relating to the business, please refer to our
SEC reports. Any references to certain non-GAAP financial measures are
2. CIT
Moderator: Valerie Gerard
01-19-05/10:00 am CT
Confirmation # 3102269
Page 2
meant to provide meaningful insight and are reconciled with GAAP in the
investor relations section of our website at www.cit.com.
So now it’s my pleasure to introduce our Chairman and CEO, Jeff Peek.
Jeffrey Peek: Thanks Valerie and good morning to everyone.
I’m pleased to report that CIT performed strongly in the first quarter of 2005.
Our diluted earnings per share increased 29% to 98 cents over the first quarter
of 2004. Now this was after excluding an extraordinary gain from debt
redemption in the first quarter of 2004.
In addition, as you heard on Monday, we increased our quarterly dividend
three cents to 16 cents per share per quarter. In addition, we delivered strong
results in some of the key areas that we had highlighted in the previous
quarter. We did exceed our target return on return-on-tangible equity, ROTE.
We reported 15.3% for the first quarter compared to 13.1% in the first quarter
of 2004, once again excluding the gain from the debt redemption.
In terms of asset growth, we saw quarterly asset growth exceed $5 billion for
the quarter, reaching almost $59 billion. Now asset growth as 2.5% after
adjusting for the Education Lending acquisition and also the disposition of
various manufactured housing and venture capital assets. If you take that
2.5%, it breaks out to 1% from organic growth and 1.5% from bolt on
acquisitions, namely the SunTrust factoring acquisition.
Importantly, we are focused on decreasing our operating expenses and we
believe they are moving in the right direction. Operating expenses were down
$17 million from the fourth quarter of 2004 before the impact of the additional
expenses in the Education Lending acquisition. Additionally, we believe we
have initiatives in place to streamline our business and simplify our
infrastructure. This should result in continued expense decreases. The most
significant, which will include deploying consistent technology across all of
CIT’s business and consolidating our servicing platforms.
Now in general, we continue to execute on the fundamentals of our business.
We remain prudent about growth. And we won’t compromise on our core
competencies of credit, risk management, and capital discipline. Our
increased focus on sales and growth initiatives combined with our efforts to
enhance our profitability and our capital returns is building momentum across
CIT. Our vertical market strategy is moving forward. And as we continue to
build this model in Commercial Finance, it will make our businesses more
efficient an enable them to work together leveraging previously unrealized
synergies to better serve our clients.
3. CIT
Moderator: Valerie Gerard
01-19-05/10:00 am CT
Confirmation # 3102269
Page 3
Now here are a couple of the highlights from the first quarter. First, a report
on the integration of the CitiCapital acquisition from October of last year.
The final piece of that integration and our servicing platform in Dublin has
been completed and we’ve reduced operating expenses per year in that
acquisition from $30 million before the transaction to $8 million projected for
2006. So that integration has gone very well for us.
Secondly, we’ve extended our vendor relationship with CDW, a leading
provider of technology solutions for commercial, government, and educational
customers. And we are now CDW’s preferred financing partner for their
state, local government, and educational opportunities as well as their
commercial opportunities. Within the context of the Dell relationship, we’ve
launched a government finance program in Mexico. Within the context of our
Agilent relationship, we’re expanding our vendor business beyond its present
limitations in South Korea. And finally the University of Wisconsin at
Milwaukee selected Education Lending as its sole provider of educational
finance during the first quarter.
Now as you know, we made two significant acquisitions during the first
quarter. The SunTrust factoring buy was a “bolt-on” acquisition that takes out
significant costs, strengthens an existing business, and obviously solidifies our
strong leadership position in that area. The other acquisition was more
significant, Education Lending Group. And we want to report that since the
beginning of the year, 63 new schools have added CIT to their preferred
lender list bringing the number of schools to approximately 700 where we are
a preferred lender. Additionally, we’ve initiated several discussions with
several of our vendor partners who see additional opportunities for EDLG. So
we’re very pleased with the developing potential of last quarter’s acquisition.
This quarter, we also invested in our human capital by hiring several very
talented and experienced professionals to assist in the sales and business
development campaigns. First, Walter Owens joined us from GE Capital to
lead our company wide sales initiatives. Second, Greg Smith joined us from
Deloitte to lead our effort in providing merger and acquisition advisory
services to our commercial customers in the middle market, a logical
progression for our business.
And finally, we continue to build our healthcare practice adding relationship
managers and senior executives who will target large solid credit healthcare
names in the middle market. Now we believe that the underlying business and
economic trends continue to be favorable in many of our businesses giving us
the strong start for 2005.
Second quarter volumes typically higher than our seasonally weak first quarter
should continue to expand as we move through the quarter. Capital Finance
4. CIT
Moderator: Valerie Gerard
01-19-05/10:00 am CT
Confirmation # 3102269
Page 4
will see the delivery of eight new jetliners in the second quarter. With the
SunTrust acquisition volumes in factoring should expand in the second
quarter. We also anticipate Asset Based Lending, Healthcare, Consumer, and
Vendor all to do well in the second quarter and throughout 2005. And finally,
Equipment Finance should pick up in volume after a very tough winter
weather wise.
As we said, we’ll continue to develop our vertical market strategy,
implementing growth initiatives that do make our businesses more efficient
and better serve our customers. On the acquisition front, we continue to
explore opportunities that can leverage our existing businesses, allow us to
redeploy capital, and better serve our existing markets.
Finally, we anticipate continuing improvements in profitability as a result of
our expense containment initiatives with greater efficiencies and lower
headcount as we move through the year. In fact, based on the positive results
from our more active management of our portfolio of businesses, we are
revising certain performance targets for 2005.
Looking ahead for the year, we see greater growth in earnings per share than
our original target. So we are raising our target earnings per share growth for
this year to 20% over 2004. Also in terms of return-on-tangible equity,
having met our goal already in the first quarter, we’re setting our sites higher
and establishing a new target for this year for return-on-tangible equity of
16%. In terms of growth in managed assets, we’re confident that we’ll deliver
16 to 18% growth in managed assets during this year with approximately 8%
coming from the acquisition, the addition of Education Lending Group. And
given the solid progress we made this quarter, we’re confident that we’ll
realize an operating expense efficiency ratio of 39% for the full year.
So all in all, we continue to make significant progress. And CIT is
reenergized focus on the customer, on increasing sales, and improving
profitability is beginning to show results. And now, I’d like to turn the
discussion over of our financial results over to our Vice Chairman and Chief
Financial Officer, Joe Leone.
Joseph Leone: Good morning everyone.
We have a lot of accomplishments this quarter. And our financial
fundamentals continued to improve. All of our progress on the financial side
may not be as apparent in our metrics, so I’d like to talk you through some of
the details.
Let’s start with growth. Jeff covered a lot of the headlines and I’ll try to add
some additional color. We continued to focus on the appropriate
5. CIT
Moderator: Valerie Gerard
01-19-05/10:00 am CT
Confirmation # 3102269
Page 5
capitalization and risk-adjusted returns in our business. As you know, we sold
about $400 million in non-strategic assets this quarter, $300 million of
manufactured housing and almost $100 million of venture capital investments.
Additionally, we took a close look at the risk profile and we syndicated or
sold about $350 million, or over $350 million of commercial assets for risk
management purposes. These were principally in Capital Finance, Business
Credit, and Equipment Finance.
On the Student Lending, EDLG front, new volume results were good. For the
full quarter - we acquired the company mid-quarter, but for the full quarter
ended March 31, 2005 volume from the school channel, one of our key
strategic initiatives, was $214 million, up 69% from last year. And we
continue to emphasize and invest in growth strategies in this channel. I think
we’re off to a good start for our 2005 asset growth target.
Credit. Credit was extremely strong. Net credit losses were 52 basis points,
about the same as last quarter but recoveries were strong again at 17 basis
points, down from an exceptional level of 30 basis points in Q4. The forward
credit metrics are strong, delinquencies and non-performers and my view is
that credit was even better in Q1 than it was in Q4.
Shifting to the income statement, we made an accounting reclassification. We
now classify rail and air maintenance costs on our operating leases in
operating lease margin rather than operating expenses. As our air and rail
fleets have increased, these costs will proportionately increase. So we made
these changes to better align lease revenues with leasing expenses. And this
change conforms to our internal business and pricing analytics.
Let me give you an example in rail. Rail lessees have the option of
maintaining equipment themselves or alternatively in a full service lease,
having the lessor maintain the equipment. With maintenance costs and
operating expense, full service leases have higher reported margins because of
the higher rents received even though part of the rent was to cover expenses.
The financial impact, the reclass reduces first quarter net interest margin and
expenses by about $12 million. The fourth quarter 2004 impact was about
$11 million and the full year 2004 impact was about $34 million. Summing it
up, the change results in about a 10 basis point decrease in margins and a 1%
improvement in efficiency ratio. We have restated the prior periods so the
trends are comparable for your analysis.
Margin. Margin was down. It was 3.54%, a little less than 3.7% excluding
EDLG. This is down about 27 basis points from the prior quarter on a
comparable basis and 13 basis points of that was from a one-time item.
6. CIT
Moderator: Valerie Gerard
01-19-05/10:00 am CT
Confirmation # 3102269
Page 6
Looking at the operating variances in margin, they relate to several items. We
continue to finance debt at tighter spreads. That helps. The benefit was offset
somewhat by short-term interest rates. And we continue to lengthen debt
maturities and we had a slight shift to more fixed rate liabilities as we opted to
take advantage of favorable market conditions and did some pre-funding late
last quarter and in the first quarter. The net impact of these funding items was
roughly an 8 basis point reduction in our margins.
Operating leases contribute about a three basis point decline to the margin as
the portfolio grows with concentrated longer lived assets like aircraft and
railcars that typically earn thinner margins with lower operating costs as
opposed to small ticket leasing. That said, pricing continues to improve in
both air and rail with rentals up roughly 15% year-over-year.
We did see a couple of basis point decline in our margin as a result of the sale
of the manufactured housing portfolio. The gross spreads in that portfolio are
high but so were charge offs. We thought that was a good trade off as we
freed up capital.
The pricing environment. The pricing environment in our lending business is
very competitive, particularly in Business Credit and Equipment Finance.
Leasing margins; however, are improved to stable as I mentioned with air and
rail being better. Margins remained strong on the commercial side of Specialty
Finance, especially in Small and Mid-ticket Leasing.
Moving to other revenues - non-spread revenues - very strong quarter, $250
million, $240 million excluding the venture capital gain. This is up nicely
sequentially year-over-year. These and other incomes were strong in Vendor
Finance, Small Mid-ticket Leasing and Business Credit. Securitization gains
were modest at $12 million, only 4% of pre-tax income.
Expenses - we made real progress on operating expenses this quarter as Jeff
said, and we’re laying a foundation for further meaningful improvement.
Operating expenses were $260 million, slightly over $260 million for the
quarter. This is a $17 million decrease from the fourth quarter excluding
EDLG, and that is real progress in what we said we had to do as we
successfully reduced certain fourth quarter items from our run rate. For
example, legal costs declined partially reflecting the lower loan loss recovery.
T&E expenditures were down, compliance costs decreased, so we had a
decline incentive compensation. Partially offsetting these savings were
increased investment in business development including healthcare buildup
and higher FICA.
7. CIT
Moderator: Valerie Gerard
01-19-05/10:00 am CT
Confirmation # 3102269
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The lower expenses improved our efficiency ratio to 41% from a comparable
42% in the fourth quarter. Given the 1% reduction the operating lease re-class
I described earlier had our efficiency ratio, our target for 2005 is now 39%. I
want to be clear about that. The target for 2005 efficiency ratio is now 39%.
We have more work to do and we’re doing it. In the second quarter we began
executing on some productivity improvement initiatives. We’ve been
discussing some of them with you, Jeff gave you some color. We are moving
to a more consistent servicing model, standardizing data, unifying platforms.
We think this is not only productivity improvement but customer service
quality improvement.
Let me give you some detail. In Specialty Finance we announced the
consolidation of certain servicing platforms and leasing systems, specifically
our New Jersey larger ticket technology leasing service center with about a
quarter of a billion dollars in assets in about 6,000 accounts will be
consolidated into our existing systems leasing platform in Bloomfield Hills.
Our New Jersey small ticket leasing platform with a small amount of assets
will be consolidated into our small-ticket leasing platform in Jacksonville.
That’s a page out of the Europe Dublin consolidation that Jeff described
earlier. Another word on that, internationally the integration of CitiCapital’s
European business is complete. We consolidated 10 acquired leasing systems
onto our own and moved the physical servicing into Dublin. This low cost
consolidated European service center is a real competitive advantage to us and
the above actions will have expense savings beginning in the second and third
quarters.
In Commercial Finance, Jeff described the approach on the vertical strategy
and we put in place a senior functional leadership team from all the
commercial businesses and larger ticket businesses in that group and this team
is looking at efficiency enhancements across the platform. In corporate,
we’ve taken specific measures to reduce expenses related to procurement
whether its travel or telecom and the like, and we’re targeting a $10 million
savings for 2005. We saw some of that in the first quarter.
As the second quarter unfolds we’ll put more specific actions plans in place to
streamline, and our overall target is 5% or about $50 million reduction from
back office initiatives. These initiatives will enable us to improve
productivity, obviously, and enable us to further invest in front office sales
and positions in growth initiatives and improve revenues and help asset
growth. All in all, we’re looking for 1% or more improvement in our
efficiency ratio from these productivity measures.
Taxes - income tax provision declined or improve to 36.75% from 39%.
What did we do? First of all the significant increase in profitability of our
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international operations with a driver - 1% of the reduction came from the fact
that our European vendor finance business which is benefiting from strong
leasing return and the platform consolidation we’ve described and the scale
added by the CitiCapital acquisition, the higher profitability there reduced our
overall tax rate by about 1%. The balance of the reduction, 1.25%, relates to a
structure we put in place late in the first quarter leveraging recently approved
legislation in the American Jobs Creation Act of 2004. This provides
favorable U.S. tax treatment for long live assets held and operated offshore.
Specifically, we will own and manage certain assets in Ireland to benefit from
this lower tax rate there. Commercial aircraft are a perfect fit given the global
nature of this business. And in the first quarter we restructured our aerospace
business into two centers, one in New York for our North American fleet and
one in Dublin for our international fleet. At the end of March we placed 15
aircraft in this Irish entity, some new and some existing aircraft, with a value
of about $550 million and anticipate placing another 20 to 30 aircraft, $1
billion or so, there by the end of the year. When we look at that altogether, we
got a 1% benefit in our consolidated tax rate from the aerospace initiative in
Q1, a little over 1%, and we expect greater savings going forward. This
improves the profitability of our commercial aerospace business.
These transfers, the international profitability improvement I described, and
other opportunities we’re evaluating could drive our consolidated effective tax
rate to 36% or lower for the year 2005.
Funding - as we look at our funding plan for the balance of the year, term debt
issuance will be about $8 billion with about $2 billion from non-dollar
markets, some out of Canada. We will continue to be active in the
securitization market with equipment and vendor finance and education
lending. Quarterly securitization volumes in vendor and equipment should
average $1 billion.
One other note on funding, we took advantage of our strong performance and
extended our committed bank lines. We have $6.3 billion of our U.S. lines are
now in multi-year facilities, no one year facility. Three lines are in three
traunches expiring in 2008, 2009 and 2010. These lines provide us with
unprecedented term liquidity and are stronger than the industry norm.
Capital - strong end to the quarter, 9.6% tangible equity to managed assets,
higher than our 9% capital required based upon our bottoms up risk based
capital analysis. Jeff mentioned the increased dividends and the board
approved an additional 5 million share increase for repurchase. These capital
actions are consistent with our capital modeling and our asset growth targets.
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A couple of final words on disclosure - we began reporting segment results
this quarter on a risk-adjusted capital allocation approach and we showed you
the prior periods for analytical comparison. We expanded the Specialty
Finance disclosure in breaking out commercial and consumer. Consumer
includes home lending, student lending, and our Utah bank.
We include in our commentary key performance metrics with and without
EDLG to help your analysis and we added a line in the balance sheet, non
recourse secured borrowings to reflect the on-balance sheet securitizations of
EDLG. And we now provide you, at your request charge-off data for both
owned and managed assets.
I hope these new disclosures are helpful to your further understanding of our
outstanding businesses. And now Operator, I’d like to turn that over to you to
open up the line for questions.
Question: A couple of questions - first on the non-interest margin, if we were to
normalize for EDLG and the one time item in the margin in the first quarter,
what’s the expectation for the balance of the year. I mean, is it still correct to
assume that it should be relatively stable or are market additions such that
you’re bracing for a little bit more pressure?
Answer: I think we tried to reflect that and we reflected that in the earnings release.
We’re talking about risk-adjusted margin, our target for risk-adjusted margin
is now between 3% and 3.2% and that’s down from 3.4% and 3.6% previous
guidance.
And the way to think about that is about 20 basis points or so of that is EDLG
that decreased, and about 10 basis points or so is the accounting
reclassification we made on the operating leases.
And the other way to think about that is, in this environment, with short term
rates going up and some pricing pressures due to liquidity in the market, we
see that hurting margins a little bit. But on the flip side, and this has happened
in all the cycles, I’ve been with this company for the last 20 years, is credit
cost also improved because of higher liquidity.
So, putting it together, most of the change is 20 basis points or so for EDLG
and the remaining due to the re-class.
Question: Okay, but in the fourth quarter I thought you had guided for credit losses in
the range of 70 basis points. You’re running roughly 20 below that now, so
that was part of why - I mean, are you assuming its going to stay in this 50, 55
basis point range?
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Answer: The credit costs - we did say 80 bps without EDLG and 70 with, and as you
can see we printed 52 bps already for the first quarter. And our thought on
that is we are striving to do better than the 80 bps without the 70 with EDLG.
Question: Okay. And then just switching gears on the asset growth front, how much
growth was there in Home Equity in the quarter?
Answer: I think net it was about $250 million. It went up about $500 million in the
quarter, we had about $540 million of bulk purchases and about $250 million
of sales.
Question: And then just lastly, in this new grouping under Specialty Finance -
commercial, the new business volume seemed to be down a little bit year-
over-year and I was just wondering what’s behind that?
Answer: Year-over-year Specialty Finance volume commercial had slightly lower
volumes in the major vendor area.
Question: And is that - you didn’t lose any vendor relationships, though?
Answer: No. No, it’s just a function of the market.
Question: I guess a quick follow up to that is, is the one-time accrual reversal, is that
related to the major vendor - I guess you cited a little dip in the profitability of
those programs. Are those all related to each other?
Answer: Yes. That’s in Specialty Finance - commercial.
Question: Okay. And maybe you discussed it and I missed it, but what was the nature of
that? Was that just a - what was the nature of the reversed accrual?
Answer: It was interest that had been previously accrued in numerous periods, prior
periods, in small amounts in prior periods that were over-accrued due to some
system change control issues that we corrected and fixed in the first quarter.
Question: And then it looked like you guys obviously made a lot of progress in the
quarter. One thing that maybe was a little on the weaker side was the average
factoring rate or I guess actual profitability was down a hair. Is there anything
systemic to that or what may be going on specifically in the pricing of
Factoring?
Answer: I think the commission rates continued to come down by a basis point. I think
the other factor that’s going on there is the quotas coming off in China, so
there have been more imports from China, a lot of volume at lower prices.
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But I think the biggest issue there was just the commission rate was down a
basis point or so.
Question: Okay. I mean, do you expect things as you look forward to see a change from
where the business has historically performed or is this a one-off thing?
Answer: I think a one basis point reduction is - it’s a one-off thing. We don’t
anticipate that the business is going to change dramatically.
Question: Can you talk about the opportunity in Healthcare. Specifically what are you
guys looking to finance? I know there are other ancillary companies that have
focuses on such. Can you talk about exactly what types of receivables you’re
looking to finance there?
As well, I noted, Business Credit had some fairly significant growth this
quarter. Could you talk about what went on there in asset based lending?
And then finally, can you provide a little more granularity on the fee income
growth quarter-to-quarter and how sustainable you think that is?
Answer: Sure. Why don’t I talk a little bit about healthcare and I’ll let Joe handle the
Business Credit and Fee Income.
In Healthcare, we are investing in the human capital. We’re adding a number
of people. At the end of the year we had about $800 million in healthcare and
a $50 billion company with a sector of the economy that’s 18% to 19% of it.
So we think we’re under loan there. And we anticipate that it’s a big
opportunity. We think there are going to be at least three types of receivables
that will generate; one would be - and we already do this, the Equipment
Financing vendor relationships for imaging equipment and that type of thing.
We’ve had a couple of those already. Secondly, would be some asset-based
lending for various types of healthcare companies. And the third would be
some conservative real estate lending to some of the - to some extended care
facilities -- doctors, clinics, those types of things. So we are investing in the
human capital and we’re getting very good people but those are the types of
receivables we’d be looking for. And we’re recruiting experienced people.
Business Credit. As you hear, there’s a great liquidity in the middle market
and the lending markets but also there’s great demand. And the Business
Credit unit has a terrific franchise, a great brand name, and are offered a lot of
opportunities. So we’re seeing a lot of opportunities for growth capital so
they had a very, very strong first quarter overall.
That answers the second; the third question you asked on fees, Fees and Other
Income were very strong throughout the franchises. I would say that
Specialty Finance, Business Credit, in particular, were strong. Some of the
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things that come to mind are strong fees on the lending business, syndication
fees on some of the things we wanted to sell for risk management purposes.
Better performance, improved performance on securitizations due to low
prepayments, lower prepayments and very good credit quality.
So our accretion improved slightly. But overall it is a very dry base in terms
of profit on the front-end of getting into deals and on the back-end of getting
out. So good performance throughout.
Question: Okay. I mean if I may follow-up on some of the Business Credit. I mean
typically, you guys have described that as more of a counter-cyclical business,
right, if I’m correct, am I wrong?
Answer: Yeah, no, I think that’s right. I have described that that way. We just happen
to have a very focused group that had a particularly successful 2004 and
continued into 2005. If I can say this, maybe we’re getting better at it. But,
the market has a lot of growth capital and we’re meeting some of those needs
so we’re - I’m real happy and proud of that team.
We’d like to think that some of this growth that’s coming through is a result
of the focus we’ve had on sales and growth over the last six months.
Question: A couple questions; just a follow-up on that last question. Were the
syndication fees for the risk management activities, were those significant?
Answer: No, just sprinkled throughout. As I said before, it’s very broad-based in terms
of nature and very broad-based in terms of units.
Question: Okay. And the second question is the new business volume in the first quarter
is seasonally weaker, it was a pretty dramatic decline quarter-over-quarter, yet
asset growth was actually a little better than we expected. Can you help me
reconcile like - does that mean that - does that imply as a much lower level of
prepayment activity fourth quarter to first quarter?
Answer: There was slightly - I mentioned that earlier. We saw a better performance in
our securitization because of lower prepayments. Maybe I can try and follow
all of your arithmetic but…
Question: Well, I think you have $1 billion - $7 billion or so in your business line in the
fourth quarter, less than $6 billion in the first quarter, yet the asset growth
numbers are relatively similar.
Answer: Yeah. I think it has somewhat to do with prepayment and somewhat to do
with where we book the assets but I’d have to look at it closer. But yes, we
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did see slightly lower level prepayments in certain areas although in certain
other areas, the liquidations continue to be relatively not.
Question: Okay. The last question is for higher level, just getting us from January to
April, the change in earnings guidance. Can you just help me think about
what was better than expected as you progressed through the quarter? The tax
thing seems like it may have been one of the major drivers. But anything else
that was running better than you thought as you went from January to April?
Answer: To the tax thing was one thing. The other thing was, as we knew we would,
we reduced expenses and we gave a little highlight on it, we’re spending quite
a bit of time on some structural combinations on our platforms and headcount.
And you will hear more from us throughout the year on how that’s going.
So that - I would say those were the two - those were probably the two biggest
drivers. And also, we got reasonably good growth for the first quarter, which,
as you know seasonally is our weakest in the year.
Question: Okay. And credit and margins were off-base there a little bit on that front?
Answer: Yeah. Credit continue - the people continue to do a terrific job on credit. And
as we talked earlier, we were guiding you to a higher number and they came
back and did a terrific job.
Question: Hi. Thanks, guys. Just another quick follow-up on the fee question; you had
mentioned that a piece of it was related to better performance in the
securitizations. Was there a one-time type of write-up in the fee income line?
Answer: No. In the prior period, as prepayment increase, you have lower accretion
and this, while we don’t have any increased prepayments, we don’t have to
lower the accretion rate; that’s what I meant.
Question: Okay. Good. But no change and assumptions or anything like that?
Answer: No. No. I mean they’re always modifying throughout but that doesn’t mean
you write-off the IO, that’s not the way it works; you get that going forward.
Unless it goes the other way, then you get it current.
Question: Okay. And then just on the reclassification of expenses, it looks like there
was some - you changed not just the gross yield but also the depreciation. I
was curious, when you restated the prior periods, are you also going to be
restating operating lease balances for prior periods given the restated
depreciation?
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Answer: That’s a good question; I hadn’t thought about that. We had not. Yes, part of
the adjustment goes through depreciation. I’ll have to take a look at that, you
got me on that one.
Question: Okay. And then just one last question, on the buyback, you had I think about
1.7 million shares remaining at the year-end. Can you give us an update of
what you had remaining at quarter-end prior to the new 5 million share
allotment?
Answer: We had less than a million shares remaining the last I looked at it.
Question: Yes. Thanks so much. I was wondering - I have a two-part question, the first
one really is to the sub-prime home equity market. I was wondering if you
could tell us a little bit from your perspective how that market is? I know you
mentioned that you had over $500 million in bulk acquisitions. How is
pricing? How has performance been? Is demand still pretty strong in that
area?
And then the second question relates to whether or not you’re seeing a lot of
competition from banks in the asset-based lending space?
Answer: I would say on the mortgage lending, the - in terms of pricing, we’re
continuing to see pretty good pricing in terms of the levels we saw in the
fourth quarter. Credit continues to be very good there. Obviously, with all
that’s been written about the real estate markets, we watch that like a hawk.
And volume seems to be somewhat volatile but doing better. I mean the -
when we have - when a ten-year goes up 40 basis points in a week, we tend to
have less volume. But all in all, that portfolio has been performing very well.
In terms of competition, from that commercial banks and asset based lending,
the ones that have designated subsidiaries to do that like a Wells or a
Wachovia, sure, we see competition from them; that’s nothing new.
Getting back to the point on the liquidity, particularly in the - making loans to
the financial sponsors, the private equity guys, that’s probably been the area
where there’s just unlimited competition from traditional players as well as
new players like hedge funds and the investment banks; it’s very competitive.
You’ve got - Business Credit did a terrific job to put together two quarters like
they did in the face of that liquidity and competition.
Question: A great quarter, guys. I was wondering based upon the situation with the
airplanes coming on and off lease, what’s the outlook for the operating lease
revenue recognition is in the next 12 to 18 months from - compared to now?
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The cash flow from - I guess there are certain things coming off and there are
new planes, and there are certain things that have to be renegotiated. So I’m
wondering if we hit the…?
Answer: Well, the basics of the portfolio - are we - our order book takes us into the
middle of the second quarter for 2007. This year, we’re going to get about 20
new planes. We placed all of them on lease.
The other thing that’s very important for us is we’re into the countdown
between now and the end of the second quarter when all of our leases will
have been renegotiated since 9/11. So we’ll actually - the difference will be
most of these leases that we’ll be renewing after the first of July will have
been renegotiated right after 9/11. So you should anticipate, not just for us but
for the industry, that there’ll be kind of automatic increases in rates as
opposed to automatic declines in rate.
So our view on our aerospace portfolio frankly is improving; the lease rates
are up, they were up 20% year-over-year last year; it’s moving some of the
planes to a lower tax rate jurisdiction, obviously, also helps the returns. So
it’s performing much better than it did a year ago.
Question: Thanks. A couple of questions please. Jeff, you talked about Walter Owens
joining. Can you give us a sense of what your top couple of priorities are?
Answer: Sure. Sure. First, it’s just - Walter just presented to our Board his plan for the
first 100 days. And first two or three things; one, assessing just the quality of
sales management and the quality of sales talent we have across our
businesses; secondly, trying to get some metrics on pipeline. For all of your
businesses, what are our conversion rates? How many new business leads
actually end up being a piece of committed business? Do we have the right
number of salesmen for various sales territories?
So this is the first time we’ve had somebody at a high level look at all our
sales forces. Typically, the sales function has been within the business unit
and reported to the General Manager. So our Sales Managers now will report
to the General Manager - the CEO of their business unit as well as to Walter.
We have about 1,400 salesmen across CIT and this is the first time that we’ll
actually start to have a view across the business units of what the metrics are
in terms of how good they are and what they can produce, compensation,
cross-selling, those types of things. So it’s quite a load but I think Walter has
given every indication his first two months here that he’s up to it. So we’re
quite excited about that.
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Question: Great. And so the - I guess after the first 100 days, he’s going to follow-up
with the Board with conclusions?
Answer: Yeah. And also, two things; his coming on board has been very timely, one,
because we started our first sales summit last summer so we’ll get all of our
Sales Managers together again at the end of June and then we’ll have regional
sales summits for all of our sales people in the second half of the year.
And in addition to that, I think as you know, we’re doing quite a bit of work
with Bain on strategic planning, evaluating our businesses, returns, that type
of thing. So he comes on at a very good time because his examination of
markets and that type of thing obviously benefits from what’s coming out of
our Bain planning process.
Question: Okay. Thanks. And the second question, please; if - you mentioned a number
of extensions of existing vendor relationships, but how is the progress on
identifying and pursuing new ones?
Answer: Well, we continue to work on that. We call it elephant hunting. We’ve added
two sales executives in the last four months to really just call on large vendor-
type clients, first in the technology sector and then beyond that. So we
continue to - we continue to look at that and have added some sales
executives.
Question: And is the target still at the pace of one a year?
Answer: Yeah, we’d love to. We’re - we’ve got some close we’d like to announce
some here in the second quarter.
Question: With the shift of your aerospace business, the bulk of it moving overseas, I
was hoping you can just comment on your perspective on the health of the
market for aerospace outside the U.S.?
Answer: Well, the - it’s clearly healthier than it is in the U.S. If you go to Asia, it can
almost be a growth business. So - and as you know, probably 80% of our
planes now are leased to non-U.S. operators. So if you think where we were
five years ago, the conclusion is that the vast majority of planes that we’ve
added over the last couple years have been leased to non-U.S. operators.
So we, we’re significantly more positive on the business on Europe and Asia
then we are in the U.S.
Question: Thanks. Wondering if you could help us understand the trajectory of growth
as the year plays on. Because you did 2.5% this quarter, excluding EDLG
looks like you’re still targeting 6-8% without EDLG. And so I’m kind of
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wondering, given the strength of Q1 are you just - is there something unusual
in Q1 or is this just - you’re going to take a conservative approach and if you
beat it you beat it.
Answer: I think our EDLG accounted for about 8% of assets, and so the 16 to 18%
revised guidance on that was in keeping with our 8 to 10% plus EDLG.
Question: So you’re, I mean, you’re tracking at the high end and Q1 is normally,
seasonally the weakest, so it would suggest that you guys are tracking
somewhat above 10%, unless something - the end markets deteriorate at some
point this year.
Answer: I think it’s a conservative estimate. And you know Piedmont was also part of
the first quarter. SunTrust Factoring, excuse me.
Question: That’s helpful. In the press release you mentioned EDLG was break even after
funding costs. Is that, when you say funding costs, you mean the premium
you paid or the actual debt cost? In the press release you mentioned EDLG
was break even for the quarter after funding costs. What is funding costs? Is
that the debt costs or is that the premium you paid for the deal?
Answer: That’s funding the premium. Obviously the funding costs for the basic
operations within the operation, operating P & L. We also have to cover the
cost to finance the premium, which we did with debt. That’s, what is debt.
Question: Okay. So that, I mean, that’s a, given your trajectory in terms of the volumes
you saw in the quarter it might bode well for the, relative to your neutral
guidance in 2005?
Answer: Yeah. Our objective is what we said in January that we were neutral. There
was no dilution or accretion expected from the EDLG acquisition in 2005.
Our mission is to do better than that. And I think the team got off to a very
fast start in terms of the first quarter.
Just so you’re clear, those volumes I quoted were the volumes for the
operations for the entire quarter. Not for our period of ownership, because our
period of ownership was just sort of an arbitrary date. Just so you know that’s
a full quarter. I just want to be clear on that.
Question: Right. No, I understood. And then just lastly the, I think you guys were still
kind of talking about where the servicing platform is going to be located for
EDLG. Do you have any updates there?
Answer: Well clearly we want to service those on ourselves. That’s a, that’s another
key objective.
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The key objectives are; build a school channel, good progress. Beat the neutral
we’re off to a good start in terms of the first quarter being relatively neutral.
And third is to get the servicing in house. And that’s what we’re hard at work
at.
Question: But it’s safe to say no decisions have been made about where that’s going to
be with EDLG, in their location or your location in Texas?
Answer: No, our focus is on bringing it in house and we’ll review that as the year
progresses.
Question: Good morning. Good quarter. Have you guys given any additional though on
how you’re going to run down or exit the aircraft leasing business, once you
take your last delivery in 2007? And then secondly, given the improvements
in lease rates that you mentioned and secondary aircraft sales, have you re-
thought your decision to exit that market? And could we see you guys think
about maybe turning your decision around?
Answer: Well I think that the, just to be clear, I think that what we always said was that
we would not - we would not sign additional orders for new planes until we
saw an improvement. Until basically the business could meet our corporate
hurdle rates of return-on-equity of 15% with a risk-adjusted capital allocation.
And that’s still where we are, I don’t think we ever said that we were going to
exit the business.
And, we have deliveries for another 24 months here. And so we obviously
have to come to that strategic decision, at a point here in the future. But as we
said, the businesses probably improved more than we would have thought, in
terms of lease rates. Okay. So it’s a good issue. I just think you’re a little bit
ahead of us in terms of our decision making.
Question: Good afternoon and nice quarter. Most of my questions have been asked and
answered, but let me just ask a couple of, couple of quick ones.
First of all in terms of the pay-out ratio, are you expecting the pay-out ratio to
move up with the increased dividend over the next couple of years?
Answer: We said -- and the dividend increase is consistent with all of our prior
statements here -- is we’re looking at a 15 to 20% pay out ratio. And the
decision on the recent dividend was consistent with that philosophy.
Question: So that hasn’t changed at all. Great.
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In terms of the, some of the Sarbanes-Oxley related issues in your 10K can
you give us an update as to where the systems ameliorations stands and what
the timeline is for that?
Answer: Yeah. We made good progress in the first quarter. And the issue relates to
income taxes and creating a tax basis balance sheet where for every individual
asset we have a tax basis as well as a book basis. In effect creating another set
of full books for the balance sheet for taxes.
We made good progress in some of our smaller ticket leasing platforms in
putting together that detailed, very detailed balance sheet. Our expectation
and our target is to resolve the control situation by mid-year to the third
quarter. That was our plan in the first quarter progress keeps us on that time
line.
Joseph Leone: Operator, before you go to another question somebody had asked earlier about
the re-class and how does it affect the balance sheet.
Since we were already recording that as a reduction through operating
expenses the asset was already reduced. So we don’t need to reduce the asset
again for the re-class, just the re-class on the income statement.
Okay operator, you can take it again.
Question: Thanks. Some variations of this have already been asked. But you mentioned
that you expected volume to improve, less run off in the second quarter, you
know better factoring, better aircraft. And I would assume also that given the
increase in interest rates probably a pretty good quarter on the, on the student
lending front. Does that mean that you will do less bulk purchase of home
equity? Is that something that won’t be in the mix as much as we go forward?
Answer: We evaluate that on a transaction by transaction basis. So, I wouldn’t come to
that conclusion because we haven’t made that decision. We probably don’t
look at it that way actually.
Question: So it’s not, - but it’s not like you’ve got a finite amount of capital that you’re
allocating across the businesses. It’s that you think there’s room to expand
more.
Answer: Yeah, we think we’ve got - we’ve got some, as we’ve always said we like
getting margin in our capital. It allows us to move quickly. To seize some
opportunities and given our new capital allocation levels we can see pretty
quickly, evaluate what the return on a particular buy is. That type of thing.
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Moderator: Valerie Gerard
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Question: Just a quick follow up. I may have missed this, but you mentioned there was
some sales out of the home equity portfolio?
Answer: Yeah, as we do all the time to manage risk. We not only make bulk
acquisitions, we make bulk sales. To manage the overall portfolio to the
target demographics we’ve shared with the market over the last three to six
months.
So I think the numbers are about $500 million in portfolio acquisitions and
about $250 million in portfolio sales.
Question: And they differed from the other portfolio in terms of demographics of the
borrowers?
Answer: Yeah. We have a target, if you look at our website, we outline all the
demographics, in terms of LTV and borrower demographics and we want our
risk profile to be right in the mid-range of those targets. And when we throw
out our marketing net we bring in other types of loans that we want to sell
through for other reasons.
Question: Hey, good morning. I had a couple of questions. First question was for Joe.
My understanding was that with the acquisition of EDLG you would be
recording some - you would be amortizing some intangibles associated with
that acquisition. Is that correct? And if so what was the amount of the
amortization you actually recorded in the P&L this quarter?
Answer: It’s about $100 million in round numbers. We said we would allocate it to the
portfolio, the assets and the amortization is not a big number in, you know a
partial quarter.
Question: Okay. And then the other question I had was just looking at the returns on
risk-adjusted capital in your Equipment Finance businesses seems to be the
lowest, of all your businesses. How should we think or how do you think
about allocating capital for new business volumes in that business. I mean
should we be thinking of it as, you know, you should be having zero new
business volume in that business and allocating all of the capital to other more
profitable businesses? If you could just share your perspective on that?
Answer: Sure. Well I think the, you know, as you can see over the past two quarters
that business has not grown significantly. Some of it’s been liquidating
portfolios that we thought were good to get out of on the balance sheet. But
we are, because its returns have not been as good as some of the other
businesses. We naturally look to the other businesses to allocate new capital
to those.
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Moderator: Valerie Gerard
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And the leadership team there’s done a terrific job in year-over-year
improvement, but their returns still lag the required hurdles. And we’re aware
of that and we’re working on that pretty hard.
Question: Okay. And then one other question I had was, you talked a little bit about
some changes to sales force and specifically you had mentioned how you
wanted to change the sales force so that it was more client focused as opposed
to currently being more siloed and product focused. Am I correct in
understanding that within the next 100 days that a change to the sales force
structure will be complete or is that something that we should expect to see
over the next two or three quarters?
Answer: Oh no. I think it’ll take - it’ll take the next three to six quarters to get where
we want to get to. But we’ve got a good start and we have several of these
verticals established and we’re filling out. And the idea is just to be able to
sell more than one product to a customer.
Question: On your growth, organic growth assumes continue - a turn around in
Equipment Finance and I might have missed this. I came on a little bit late.
But Equipment Finance looked like it was down a little in the quarter. Or is
that assuming a pick up in growth again. I know you said that’s one of the
tougher, more competitive businesses.
And then just, is there any chance of following your success on aircraft
lending overseas with the Equipment Finance say in Asia, given the heated
markets?
And the other thing, and this is kind of far out but in the fourth quarter any
change in the way you’re doing comp, bonuses, etcetera in the event that you
do hit these higher EPS numbers. Will there be a bump in the comp numbers
in the fourth quarter again?
Answer: Okay. Let me try and take this one from the top. In terms of Equipment
Finance, I don’t think we’re, we think the second quarter will be better in line
than the first quarter. I don’t think we’re looking for any out - untoward
growth in that particular portfolio. Okay?
So I would say our guidance on growth is probably based more on the breadth
of the portfolio, across all of our businesses than on any single business unit
such as Equipment Finance having a just a shoot the lights out quarter. All
right?
And let me go to the compensation question. Then I’m going to let Joe talk
about Asia.
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Moderator: Valerie Gerard
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You know, on the compensation issue, the way our compensation works is our
bonuses are tied to our plan. So for the bonus pool to be as big in December
of 2005 as it was in 2004, we would have to be up 15% in earnings per share.
See what I’m saying? So that the bar gets higher every year, so we would
have to significantly beat our target financially for the bonus pool to grow.
Couple of additional comments on your questions. First of all, in Equipment
Finance quarter–to-quarter there’s a footnote on the table, I want to make sure
everybody’s read it. We moved $400 million of the assets in the first quarter
from Equipment Finance into Business Credit. It relates to our sports and
gaming franchises business, which we felt was a better fit as a Business Credit
operation. So factor that into your forward looking trend.
Asian, interesting opportunity for us. I spent some time over there on a
variety of fronts. I think we’ve got a very good operation there. It’s small.
Our strategy right now is to evaluate it. But our strategy right now is to work
through vendor finance partners. We think that’s the appropriate approach.
And as we have more to say on that front, we will.
Jeffrey Peek: I think we’ll turn it back to Valerie Gerard for a couple closing comments.
Valerie?
Valerie Gerard: Thanks a lot, Jeff. Once again everyone thanks for your time today. As
always, Investor Relations will be posting the prepared remarks from this
presentation on our website in about an hour, and we will have a complete
transcript posted on the Web site by tomorrow.
That’s it. Steve, Pam and I are around to answer any questions that you may
have. So thanks very much, have a great day.
Operator: This concludes today’s conference call. You may now disconnect.
END