Nyse Cit 2007

C IT – annual report 2007
CI T – a n n ua l re po rt 2 0 0 7
®
www.cit.com
AMERICAN RAILCAR LAYLINE PETROLEUM LLC
INDUSTRIES
$47,500,000
$30,000,000 Senior Secured Revolving Credit
Senior Secured Debt Facility and 2nd Lien Credit Facility
and Revolving Line of Credit Administrative Agent
Participant
OTTAWA SENATORS
BETTS
C$130,000,000
£75,000,000 Senior Secured Revolver
Senior Secured Facilities and Term Loan
and Mezzanine Facilities Financial Advisor, Lead Arranger
Mandated Lead Arranger, Bookrunner, and Administrative Agent
Facility Agent and Security Trustee
PROFESSIONAL
DOLLAR GENERAL BULL RIDERS
$1,125,000,000 $40,000,000
Asset Based Facility Senior Secured Revolver
Administrative and Collateral Agent
and Term Loan
Administrative Agent
DUBAI AEROSPACE
ENTERPRISE SAULT AREA HOSPITAL
$937,000,000 C$408,000,000
Acquisition of Landmark Construction and Term Loan
and Standard Aero arranged and placed by CIT
Documentation Agent Sole Financial Advisor
EQUINIX SPENCER’S
£82,000,000 $172,000,000
Senior Secured Facilities Asset Based Facility
Mandated Lead Arranger, Sole Underwriter, and Term Loan
Facility Agent and Security Trustee Sole Lead Arranger
THE GENERATIONS TLC VISION

NETWORK
$150,000,000 $110,000,000
Senior Secured
Senior Secured Credit Facilities
Credit Facilities Sole Lead Arranger, Sole Bookrunner
Co-Arranger, Joint Bookrunner and Administrative Agent
and Administrative Agent
GIVE AND GO
PREPARED FOODS
C$115,000,000
Senior Secured Facilities
Co-Lead Arranger
and Administrative Agent
DEAR SHAREHOLDERS
Two thousand and seven was an extremely challenging We are a market leader in each of our core commercial
year for financial institutions and it proved to be one of franchises. Our Corporate Finance, Transportation
the most difficult in CIT’s 100-year history. Our perfor- Finance, Trade Finance and Vendor Finance business
mance was adversely affected by the downturn in the segments are all serving customers and generating
housing market, the legislative changes surrounding profits at double-digit returns on equity. And while their
education lending and the tightening of the capital performance was overshadowed by our consumer
markets. Despite these setbacks, which resulted in business-related charges this past year, they continue to
a net loss of $111.0 million for our company and expand client relationships and build market share.
a 57% decline in our share price, we are a resilient
In 2007, we grew our global vendor financing franchise
company focused on building value for our share-
through the acquisition of Citigroup’s U.S. Business
holders, our customers and our employees. We have
Technology Finance unit and expanded our global
demonstrated this resiliency time and again over the
vendor financing relationship with Microsoft. In an
past century, as we navigated successfully through more
effort to increase our advisory capabilities, we acquired
than 19 business cycles since our founding in 1908.
Edgeview Partners, a highly-regarded middle market
In 2007, we made strategic moves to respond to these mergers and acquisitions firm. This transaction has
issues. We decided to exit home lending and took already resulted in increased fee generation, and
approximately $1.5 billion in valuation allowances and we expect continued traction on this front throughout
loss provisions. We modified our student lending 2008. We also successfully completed the strategic
business model in response to legislative and competi- sales of our construction finance business and our
tive changes, and wrote off $312.7 million of goodwill U.S. systems leasing portfolio, which freed valuable
and general intangibles related to that business. And capital. In addition, we sold our 30% interest in our
we adjusted our funding and asset origination U.S.-based Dell Financial Services joint venture, the
strategies as a result of the sharp pullback of liquidity gain from which largely offset the write-off of goodwill
and repricing of risk in the capital markets. and intangibles in our student lending business.
I, along with our Board of Directors, was extremely We maintained a diverse portfolio of more than $80 bil-
PAGE 1
disappointed in our 2007 financial results. While lion in managed assets—of which approximately 75%
dissatisfied with our performance, I am confident that are commercial exposures, spread among many
the fundamental strength of our commercial fran- industries and geographies. This past year we launched
chise, which is recognized as a leading global provider a broader asset management strategy whose objec-
of financing to the middle market, as well as the tives were three-fold: to more efficiently use our capital;
commitment and dedication of our employees, will to provide ongoing third-party sources of capital; and
drive our future success. Our senior management to generate fee income. Under this strategy, we success-
team continues to focus on mitigating the issues we fully launched our first Collateralized Loan Obligation
faced in 2007, and I am confident that we will overcome (CLO) and completed the initial public offering of Care
these challenges. We continue to implement the Investment Trust (NYSE: CRE), a healthcare REIT
long-term strategies that have built our franchise over managed by CIT Healthcare. Our efforts on this front
the past several years, and we were successful in continue to build momentum; in early 2008, we created
achieving many of the goals and objectives we set for our first junior capital fund, which is expected to
ourselves earlier in the year. approach $1 billion in total funding by the end of 2009.
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Our determination to grow our global footprint contin- We will deploy resources and capital selectively to
ued to deliver results. During 2007, we achieved our most profitable commercial franchises. We will
our goal of having 25% of our assets outside the U.S. increase operational efficiencies, with a goal of
by year-end. In fact, approximately one-third of our eliminating approximately $100 million of annualized
commercial exposure is now non-U.S. We expanded our costs and we will leverage our diverse revenue
regional service center in Dublin and opened new generation capabilities. I believe these actions will
service centers in Shanghai and Singapore to meet the further solidify CIT’s competitive market position.
demands of our expanding international customer
Enduring customer relationships have been paramount
base. These offices offer a global value proposition to
to our success these past 100 years. These relationships
our regional clients and reflect our commitment
will remain crucial to our future success, and we will
to deploying our expertise in middle market finance
focus on deepening and broadening them as we deliver
around the world.
capital, as well as ideas, that drive business success.
Credit and proactive risk management remains a
I am very proud of the flexibility and commitment
fundamental part of the success of our business
displayed by our employees this past year. We have
model. Our long-standing commitment to maintaining
asked them to shoulder a heavier burden as we move
a strong balance sheet and solid capital levels has
forward with a leaner, more focused organization, and
proven particularly important in navigating the recent
they have responded with ingenuity and enthusiasm.
capital markets by giving us flexibility. We actively
Their performance, dedication and hard work are
adjusted our funding model by shifting from a mix of
reflected in the strength of the CIT culture and the
secured and unsecured debt to principally secured debt,
growing recognition of our global brand. I am confi-
in order to take advantage of the more attractive cost of
dent that our actions during a very challenging 2007
funds available to us through asset-backed financings.
will position us to deliver long-term value for our
We expect that many of the market challenges we investors and further strengthen the relationships
faced in 2007, including a softening U.S. economy and we have with our clients. As we look toward the next
constrained capital markets, will continue into 2008. 100 years, I want to thank all our stakeholders,
PAGE 2
Despite these factors, I remain confident in our clients and employees for their continued confidence
fundamental business model. We have built CIT to and support.
perform through all business cycles, and I believe
our actions to enter non-cyclical industries, expand
globally, and diversify revenue sources have better
positioned us for the future.
We began our centennial year on February 11, 2008,
which offers us an opportunity to reflect on what
has made CIT so resilient and successful for the
past 100 years and how we can position ourselves Jeffrey M. Peek
for the next 100. Chairman and CEO
This year, we will continue to take a two-pronged
approach to driving value: enhancing the success
of our commercial franchises, while managing our
consumer business to further mitigate risk. Key to
our success in 2008 and beyond will be our ability
to navigate the rapidly changing economic environment.
We will further diversify our funding sources to main-
tain adequate liquidity and minimize our cost of funds.
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100 YEARS OF SUCCESS...
REDEFINING THE FUTURE
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100 YEARS OF Innovation TO BUILD ON
Since our founding in 1908, CIT has been a financing innovator to companies
and individuals seeking capital. As far back as 1915, we paved new ground by
partnering with Studebaker to pioneer the auto financing business. This
tradition of working with trailblazing companies continues today. For example,
we recently supported the expansion of one of the fastest growing sports in
the U.S. by financing the acquisition of the Professional Bull Riders Association.
We also partnered with two innovative companies in the film industry to bring
their unique visions to the screen. For the first, an independent production
company, we provided financing on a picture-by-picture basis. This approach
offered the company significant financial flexibility and led to a major
corporate syndication deal. For the second, a global media company, we
provided financing to establish a new studio with in-house production and
distribution capabilities. In both instances, out-of-the-box thinking created
cutting-edge solutions for an industry that thrives on ingenuity.
Even in our longest-standing businesses, CIT continues to develop new

financial solutions to meet the needs of clients. We helped to bring about the
emergence of a market that is revolutionizing business travel: fractional
ownership of business jets. We structured an innovative supply chain factoring
and financing model for Lifestyle Enterprise, a company that manufactures
furniture in Asia and exports it to the U.S. To enable Lifestyle to move goods
directly from the ship to the showroom, our model accelerates funding by
monitoring goods while they are still in transit.
01.
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100 YEARS OF VALUES TO BUILD ON
CIT’s success has always depended on the talent and dedication of our
employees. Our core values—integrity, respect and resilience—infuse
everything we do, whether working collaboratively with colleagues, meeting
the financing needs of our customers or volunteering in the communities
in which we live and work. From our Chairman’s Forum, which offers senior
management the opportunity to share strategic leadership perspectives, to
our analyst program, which provides recent college graduates with hands-on
opportunities to learn and contribute as they build their careers, CIT is commit-
ted to investing in the asset most critical to building our future: our people.
Supporting our communities is important to everyone at CIT. Globally, we

partner with a range of civic and cultural organizations that address critical
non-profit needs and encourage employee volunteerism. Our partnerships
with the National Ballet of Canada, the New York City Ballet, the New York City
Opera, and the New Museum of Contemporary Art in Manhattan offer
thousands of people free access or discounted ticket programs, allowing
these institutions to expand and build their audiences by removing cost
barriers. In addition, our regional support for the Salvation Army Food Bank
and education programs through Junior Achievement has created
lasting results for the communities and individuals served by these programs.
To commemorate our Centennial, CIT has empowered employees worldwide

to donate funds and time to support organizations in their local communities.
CIT employees will also be planting trees as part of the New York City
MillionTrees initiative, which is intended to improve quality of life and reduce
the effects of asthma in areas of the city afflicted with low canopy cover.
02.
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100 YEARS OF RELATIONSHIPS TO BUILD ON
We opened our doors with 22 customers. Today we have over 1 million
customers in 50 countries. Many of our business relationships have lasted
for decades. CIT continues to value long-term relationships, working to
understand our clients’ distinctive business models and their unique potential.
This ability to spot potential enabled CIT to help Christian Casey, a fashion
leader representing such high-profile lines as Sean Jean, to move forward with
a new, more efficient financing structure. Because of our long-standing
relationship with key members of the Christian Casey management team, as
well as with its equity partner, we were confident in the company’s people
as well as its products. We provided a complete financing package that enabled
Christian Casey to consolidate its obligations with one lender.
Spotting a company’s unique potential leads to relationships that grow and

become stronger. When the founders of Primrose Schools approached CIT
more than a decade ago seeking growth financing, we saw more than the
numbers on their balance sheet; we saw the potential in their early childhood
national franchise business. The company has since revolutionized early
childhood education by combining its proprietary learning methodology with
a franchise model. Our customized vendor program has enabled them to
open more than 180 preschools across America. This type of close, supportive
client relationship has been central to our success for a century.
03.
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100 YEARS OF SERVICE TO BUILD ON
CIT has always understood that companies need more than capital to succeed.
Service excellence and a commitment to working with our clients through
all business cycles has been integral to our success. Increasingly, providing
superb service has meant a commitment to being closer to our customers
no matter where they do business. This year we opened two new offices in Asia,
a global vendor servicing center in Shanghai and an aerospace office in
Singapore, further deepening our relationships in that region. These offices
reflect our commitment to deploying our expertise around the world.
Service has been the foundation on which CIT has built a 50+ year partnership
with Dunkin’ Donuts. Over the years we have provided more than $2 billion
in financing to its franchisees, allowing Dunkin’ Donuts to become one
of the leading purveyors of coffee and donuts in the U.S., with an expanded
footprint in previously underserved areas. By providing outstanding service
and simplifying the often complex franchise finance process, CIT has built
long-standing relationships with Dunkin’ Donuts franchisees, helping them
to achieve their entrepreneurial dreams.
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100 YEARS OF EXPERTISE TO BUILD ON
Providing ideas and insights, in addition to capital, has been an enduring hallmark
of CIT. Our ability to offer advisory services to complement our diverse product
line was further strengthened by our acquisition of Edgeview Partners, a middle
market mergers and acquisitions firm. In the first six months, Edgeview closed
six transactions totaling approximately $630 million in enterprise value while
assisting clients in selling their businesses and acquiring new ones.
With a brand that’s recognized as a leader in middle market M&A, Edgeview has
strengthened our competitive position in this traditionally underserved segment of the
U.S. economy. To better understand and support this $6 trillion market, we conducted
a comprehensive survey in 2007. This resulted in the release of our inaugural
U.S. Middle Market Outlook, which provides an in-depth understanding of where
the middle market is headed and highlights critical challenges and opportunities.
In addition to our deep understanding of the middle market, our industry expertise,
combined with our specialized advisory service businesses, allows us to bring
more than just capital to the table. In fact, it is this deep expertise that continues
to differentiate CIT as we advise our clients on how best to navigate through the
ever-changing business environment.
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.
1908–1924 1925–1945 1946–1965 1966–1985 1986–2008
CIT 100 years
A N ew Vent ur e 1908–1924
Sta nding Fir m 1925–1945
Pos tWa r Pr os per it y 1946–1965
Ad a pting to Cha ng e 1966–1985
A N ew Economy 1986–2008
A NEW STANDING POSTWAR ADAPTING A NEW
VENTURE FIRM PROSPERITY TO CHANGE ECONOMY
CIT was born in 1908 when Henry Ittleson found a Through the Great Depression and World War II, at When America turned its energies to postwar production, By the late 1960s the postwar boom was ebbing: drift The 1980s brought a new era of business innovation,
new way to make financing available to businesses a time when reservations about installment buying the country demonstrated the confidence of victory as well and doubt began to creep back into the economy. while the 1990s brought sweeping technological change.
in St. Louis, Missouri. Soon, CIT was forging paths ran deep, CIT maintained an unshakable belief in as an awesome capacity for growth and widely shared Through the 1970s CIT redefined its business lines in a With unprecedented productivity came opportunities to
across the country, into Canada and overseas. the soundness of American institutions and the good prosperity. CIT helped provide the capital to fuel this successful effort to stay ahead of landmark changes in prosper and build. CIT was there to help businesses and
judgment of its customers. unprecedented expansion of the national economy. politics, culture and the economy. consumers make the most of them.
a sure start standing up for consumers at peace and at work new needs, new directions doing more with less
Even as Henry Ittleson signed the Faith in the American consumer helped With much of the world devastated by In 1969, CIT withdrew from auto financing, After transferring its $1.35 billion
incorporation papers for his new CIT weather the Great Depression. Just war, the United States entered an era of once a pioneering business, and turned consumer loan portfolio to Manufacturers
company, the nation was in the middle a few months after the stock market unparalleled ascendancy. The progress instead to personal and home equity Hanover Trust Corporation (MHC) in
of a banking crisis, the Panic of 1907. “Crash of ’29,” CIT announced record of CIT through the era tracked the loans and equipment leasing. To pursue 1986, CIT focused exclusively on business
Nervous customers’ withdrawals forced earnings and opened new offices in nation’s upward trajectory: in just three those aims, CIT acquired two more clients. That year, the company’s
many banks out of business. Despite Europe. During the next few years the years, from 1947 to 1950, the company’s banks in 1970, while maintaining its diversified operations helped it weather
the turbulence, Ittleson realized that 1908 CIT’s birthplace — 1908 Henry Ittleson, company provided financing for the 1926 The home office 1930s CIT financed net income rose from $7.3 million 1939 Arthur O. Dietz 1947 CIT representa- commitment to social change by offering 1972 A name change 1979 Subsidiary, a collapse in energy-related sectors 1996 CIT invested in 1999 CIT helped the
businesses would require credit the Security Bank CIT’s founder and chief Detroit Aircraft Company and acquired Accounting Department the leasing of RCA to $30.8 million. In 1953, the company became CIT President. tives get acquainted loans for minority-owned small for CIT’s Financial Picker X-ray Corp. of the economy. Magic Cinemas state of NJ finance the
through times of sickness and health. Building in St. Louis. executive for 40 years. William Iselin & Company, Inc., to become hard at work. Photophone units. started a new subsidiary, Patriot Life He served for 24 years. with a new, Ford trac- businesses, as well as a $5.6 million Services unit required produced the and is now financing state’s new E-ZPass
Within three months of its founding, the nation’s largest factoring business. Insurance Company, opened a consumer tor in Columbus, Ohio. loan for a low-income housing project 744 U.S. offices to fastest CT scanner. around the world 15 films by Dark toll technology.
CIT listed 22 clients, including the young finance office in Hawaii and established in Georgia. install new signs. In 1991, the acquisition of Fidelcor Castle Entertainment.
Monsanto chemical company. through the hard times its first employee health plan. As a Business Credit Corporation greatly
CIT remained remarkably sound supplier of financing for autos and for stall and recovery increased the small business service
Now To New York throughout the 1930s, and in 1933 lent construction equipment, CIT helped In 1971, CIT reported record-high capabilities of CIT. In the new century,
In 1915, CIT moved east to New York City. its financing expertise to a federal put Americans into new automobiles earnings for the twentieth consecutive CIT survived a brief ill-fated
The following year, CIT teamed with commission that established the Federal and onto safer, more efficient roads. year. But in 1972, profits declined, acquisition by Tyco International
the Studebaker automobile company Housing Administration. CIT acquired reflecting “stagflation” in the national and became 100 percent publicly
to provide first-of-its-kind financing Universal Credit Corporation, Ford a new home economy. A subsequent oil embargo owned in 2002. In 2004, the purchase of
to car buyers. During World War I, CIT 1915 CIT’s first 1916 CIT offered Motor’s financing wing; launched a new 1930 CIT operated 1930 CIT entered the In 1957, CIT moved into a new building by OPEC escalated energy and raw CitiCapital’s vendor financing business
New York City office — “banking facilities for 122 branch offices in airplane manufactur- 1956 CIT’s Universal 1954 CIT was instru-
financed the manufacture of 150 subsidiary, Equipment Acceptance at 650 Madison Avenue. The following materials costs, but by 1977 vigorous in Germany, UK, France and Spain
the Adams Building at the deferred payment three major divisions. ing finance business. C.I.T. Credit office in mental in bringing 1979 Pope John Paul II 2004 As CIT’s CEO 2006 CIT opened its
electronic “U-boat chasers.” With an Corporation, to provide financing for year, its 50th anniversary, CIT purchased consumer spending, assisted in part was the company’s first European
61 Broadway. selling” of cars. East St. Louis. about the National used CIT-financed for 17 years, Albert global headquarters,
eye toward the post-war economy, the machinery and equipment manufactur- a manufacturing company, Picker X-ray, by more than 1,000 CIT consumer finance acquisition. Subsequent acquisitions of
Highway Act of 1954. mobile homes and flat R. Gamper, Jr. guided a 28-story, glass-
company also arranged with Thomas ers; and established the CIT Safety and Bank of North America, which offices, had fueled a recovery. In 1979, the UK and German vendor financing
bed trucks during a the company into encased tower
Edison, Inc., for consumers to purchase Foundation to promote safe driving. established a personal loan portfolio. In new banking rules prompted CIT to sell businesses from Barclay’s greatly
portion of his U.S. visit. a new era of global building at 505 Fifth
radios on an installment plan. 1964, diversification continued with the National Bank of North America. increased international capabilities,
competition and Avenue in NYC.
on to victory purchase of Gibson Greeting Cards, the as did the purchase of two Chinese
community service.
The Roaring Twenties During World War II, CIT offered a nation’s third largest card company. CIT new rules, new era equipment leasing companies.
As the economy surged during the month’s bonus pay, life insurance and also combined several factoring units into In 1980, RCA Corporation acquired CIT
“Roaring 20s,” CIT arranged financing a guaranteed job on return to its 2,000 a new subsidiary, Meinhard-Commercial. and sold its four manufacturing power of imagination
for several other car makers, including employees who served in the armed 1933 CIT helped businesses – Picker, Gibson, All-Steel In 2006, CEO Jeffrey M. Peek and NYC
Nash, Packard and Chrysler. In 1924, 1924 CIT became the forces. CIT also acquired two manufac- to establish the confident and prospering and RACO. Despite these changes, Mayor Michael R. Bloomberg officially
CIT became the first company of its kind first company of its turing companies in the early war Federal Housing CIT added Meadow Brook Bank in 1965 1957 CIT opened 1964 CIT purchased net earnings of $177.4 million were the opened The CIT Building, a new,
to be listed on the New York Stock kind to be listed on years, Micro Switch Corporation and Administration. and acquired another manufacturing for business at Gibson Greeting highest in CIT history. In 1983, the 28-story, glass-encased tower building
Exchange. The following year, volume the NYSE. Holtzer-Cabot Electric Company. business, All-Steel Equipment, Inc., a 650 Madison Avenue Cards, the nation’s company’s 75th anniversary year, CIT 1983 Artist’s drawing 1984 Manufacturers at 505 Fifth Avenue. The company’s
exceeded $148 million. Both earned awards from the military maker of office furniture. At the end of on October 28, 1957. third largest card moved to new, campus-like quarters of CIT’s new quarters Hanover acquired emphasis on such assets as talent,
for outstanding productivity. the year, CIT passed a major milestone, company. in Livingston, NJ. The next year, RCA on 31 acres in CIT from RCA for creativity and service capability to 2004 Jeffrey M. Peek
having recorded $100 billion in financing sold CIT to Manufacturers Hanover Livingston, NJ. $1.51 billion. 1 million clients across 30 industries was elected as CIT’s
volume since its founding in 1908. Half Trust Corporation. in 50 countries gave further evidence President and Chief
of that volume had been generated in the of the company’s highly tuned resonance Executive Officer.
10 years since 1955. with the new economy.
cit and the world cit and the world cit and the world cit and the world cit and the world
1908 The Wright brothers sign their 1914 The Panama Canal is officially 1929 The Great Crash 1939 First commercial television broadcast 1946 Baby boom begins 1955 Disneyland opens 1971 Intel invents the single-chip 1975 Jaws ushers in blockbuster era 1989 Berlin Wall falls, heralding the
first contract for the delivery opened 1930 First U.S. supermarket, 1939 Bill Hewlett and Dave Packard set up 1947 Levittown opens 1958 First credit card introduced microprocessor in Hollywood triumph of market capitalism
of a plane 1916 Ford’s Model T sells for $360 — King Kullen, opens shop in a Palo Alto garage 1947 Three Bell Labs scientists invent 1962 First Wal-Mart opens 1973 OPEC oil shock 1981 Microsoft tapped to provide IBM 1994 Netscape goes public, launching
1911 Air conditioning is invented half a million roll off the lines 1935 First DC-3 flight the transistor 1973 Federal Express begins operating system a technology IPO boom
1913 The Federal Reserve System 1919 The nation’s first municipal air- 1936 Hoover Dam completed operations 1984 AT&T dismantled 2004 Google goes public
is created port opens in Tucson, Arizona 1973 Dr. Martin Cooper of Motorola
makes the first call on a
portable cell phone
.
1908–1924 1925–1945 1946–1965 1966–1985 1986–2008
CIT 100 years
community service.
portable cell phone
.
1908–1924 1925–1945 1946–1965 1966–1985 1986–2008
CIT 100 years
community service.
portable cell phone
.
1908–1924 1925–1945 1946–1965 1966–1985 1986–2008
CIT 100 years
community service.
portable cell phone
.
1908–1924 1925–1945 1946–1965 1966–1985 1986–2008
CIT 100 years
community service.
portable cell phone
.
1908–1924 1925–1945 1946–1965 1966–1985 1986–2008
CIT 100 years
community service.
portable cell phone
CIT 2007 financial section
01.30230-FC-toc.qxp 3/6/08 12:38 PM Page a
UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
FORM 10-K
|X| Annual Report Pursuant to Section 13 or 15(d) or | | Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2007
Commission File Number: 001-31369
CIT GROUP INC.

(Exact name of registrant as specified in its charter)
Delaware 65-1051192
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
505 Fifth Avenue, New York, New York 10017

(Address of Registrant’s principal executive offices) (Zip Code)
(212) 771-0505
Registrant’s telephone number including area code:
Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered
Preferred Stock, Series A par value $0.01 per share New York Stock Exchange
Common Stock, par value $0.01 per share New York Stock Exchange
Equity Units, stated amount $25.00 per unit New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:

None
Indicate by check mark if the registrant is a well-known common stock outstanding), which occurred on June 29,
seasoned issuer, as defined in Rule 405 of the Securities 2007, was $10,419,981,092. For purposes of this computa-
Act. Yes |X| No | |. tion, all officers and directors of the registrant are deemed
Indicate by check mark if the registrant is not required to to be affiliates. Such determination shall not be deemed an
file reports pursuant to Section 13 or Section 15(d) of the admission that such officers and directors are, in fact, affil-
Act. Yes | | No |X|. iates of the registrant. At February 15, 2008, 191,231,307
shares of CIT’s common stock, par value $0.01 per share,
Indicate by check mark whether the registrant (1) has filed were outstanding.
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 Indicate by check mark whether the registrant is a shell
months (or for such shorter period that the registrant was company (as defined in Rule 12b-2 of the Act). Yes | | No |X|.
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes |X| No | |. DOCUMENTS INCORPORATED BY REFERENCE
List here under the following documents if incorporated by
Indicate by check mark whether the registrant is a large reference and the Part of the Form 10-K (e.g., Part I, Part II,
accelerated filer, an accelerated filer, or a non-accelerated etc.) into which the document is incorporated: (1) Any
filer. Large accelerated filer |X| Accelerated filer | | Non- annual report to security holders; (2) Any proxy or informa-
accelerated filer | | Smaller reporting company | | tion statement; and (3) Any prospectus filed pursuant to
Indicate by check mark if disclosure of delinquent filers Rule 424 (b) or (c) under the Securities Act of 1933. The
pursuant to Item 405 of Regulation S-K (229.405 of this listed documents should be clearly described for identifi-
Chapter) is not contained herein, and will not be contained, cation purposes (e.g., annual report to security holders for
to the best of registrant’s knowledge, in definitive proxy or fiscal year ended December 24, 1980).
information statements incorporated by reference in Part III Portions of the registrant’s definitive proxy statement relat-
of this Form 10-K or any amendment to this Form 10-K. | | ing to the 2008 Annual Meeting of Stockholders are
The aggregate market value of voting common stock held incorporated by reference into Part III hereof to the extent
by non-affiliates of the registrant, based on the New York described herein.
Stock Exchange Composite Transaction closing price of See pages 121 to 123 for the exhibit index.
Common Stock ($54.83 per share, 190,041,603 shares of
01.30230-FC-toc.qxp 3/6/08 12:38 PM Page 1
CONTENTS
Part One
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Part Two
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities . . 14
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . 17
Item 7A. Quantitative and Qualitative Disclosure about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
PAGE 1
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 119
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Part Three
Item 10. Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . . . . . . . . . . . . . . 120
Item 13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Part Four
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Signatures ................................................................................................... 124
Where You Can Find More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Table of Contents
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PART ONE
ITEM 1. Business
OVERVIEW
BUSINESS DESCRIPTION We previously offered mortgage loans to consumers.
Founded a hundred years ago on February 11, 1908, CIT However, we closed the home lending origination platform
Group Inc., a Delaware corporation (“we,” “CIT” or the in August 2007 due to the disruptions in that market. See
“Company”), is a leading commercial finance company pro- “Home Lending” segment in this section and “Profitability
viding financing and leasing products and services to clients and Key Business Trends” section of Item 7. Management’s
in a wide variety of industries around the globe. Discussion and Analysis of Financial Condition and Results of
Operations for further discussion on home lending.
Diversification is a hallmark of CIT, with a broad range of
financial services businesses serving customers in over 30 Asset generation is a core strength of CIT. We source transac-
industries and 50 countries. The majority of our business tions through direct marketing efforts to borrowers, lessees,
focuses on commercial clients with a particular focus on mid- manufacturers, vendors, distributors and to end-users
dle-market companies. We serve a wide variety of industries. through referral sources and other intermediaries. In addition,
Our largest industries include transportation, particularly our business units work together both in referring transac-
aerospace and rail, and a broad range of manufacturing and tions between units (i.e. cross-selling) and by combining
retailing. We also serve the wholesaling, healthcare, commu- various products and services to meet our customers’ overall
nications, media and entertainment and various financing needs. We also buy and sell participations in syndi-
service-related industries. Our SBA preferred lender opera- cations of finance receivables and lines of credit and
tions has been recognized as the nation’s #1 SBA Lender periodically purchase and sell finance receivables on a whole-
(based on 7(a) program volume) in each of the last eight loan basis.
years. We also provide financing to the student loan market. Credit adjudication and servicing are also core strengths.
Each business has industry alignment and focuses on specific We maintain disciplined underwriting standards and
sectors, products and markets, with portfolios diversified by employ sophisticated portfolio risk management models to
client and geography. Our principal product and service offer- achieve desired portfolio demographics. Our collection and
ings include: servicing operations are centralized across businesses and
PAGE 2
geographies providing efficient client interfaces and uni-

Products form customer experiences.
_ Asset-based loans
We generate revenue by earning interest income on the loans
_ Secured lines of credit
we hold on our balance sheet, collecting rentals on the equip-
_ Leases – operating, capital and leveraged
ment we lease, and earning fee and other income for the
_ Vendor finance programs
financial services we provide. In addition, we syndicate and
_ Import and export financing
CIT – ANNUAL REPORT 2007
sell certain finance receivables and equipment to leverage

_ Debtor-in-possession / turnaround financing
our origination capabilities, reduce concentrations, manage
_ Acquisition and expansion financing
our balance sheet and improve profitability.
_ Project financing
_ Small business loans We fund our business in the global capital markets, principally
_ Student loans through asset-backed and other secured financing arrange-
_ Letters of credit / trade acceptances ments, commercial paper, unsecured term debt, and
broker-originated deposits. We rely on these diverse funding
Services
sources to maintain liquidity and strive to mitigate interest rate,
_ Financial risk management foreign currency, and other market risks through disciplined
_ Asset management and servicing matched-funding strategies. Our debt ratings are summarized
_ Merger and acquisition advisory services on page 46 in the “Risk Management” section of Item 7.
_ Debt restructuring Management’s Discussion and Analysis of Financial Condition and
_ Credit protection Results of Operations.
_ Accounts receivable collection
_ Commercial real estate advisory services At December 31, 2007, we had managed assets of $83.2 billion
_ Debt underwriting and syndication comprised of an owned loan and lease portfolio of $76.9 billion
_ Insurance and a securitized portfolio of $6.3 billion. We also serviced third
_ Capital markets structuring party assets under fee-based contracts at year-end. Common
stockholders’ equity at December 31, 2007 was $6.5 billion.
02.30230-Item1.qxp 3/6/08 1:09 PM Page 3
BUSINESS SEGMENTS
CIT meets customers’ financing needs through six business segments.
SEGMENT MARKET AND SERVICES

Corporate Finance Group Lending, leasing and other financial services to middle-market companies,
through industry focused sales teams, including Healthcare, Communications,
Media and Entertainment, and Energy, as well as to small businesses, through
broker and intermediary relationships.
Transportation Finance Large ticket equipment leases and other secured financing to companies in
aerospace, rail and defense industries.
Trade Finance Factoring, lending, credit protection, receivables management and other trade
products to retail supply chain companies.
Vendor Finance Innovative financing and leasing solutions to manufacturers, distributors and
customer end-users around the globe.
Consumer Student loans through Student Loan Xpress; other consumer loans through CIT
Bank.
PAGE 3
Home Lending Servicing and collecting our liquidating home lending assets. We ceased origi-
nating new loans in the second half of 2007.
Our managed assets are presented in the following graphs.

Managed Assets by Segment Managed Assets by Country
At December 31, 2007 (dollars in billions) At December 31, 2007 (dollars in billions)
Australia 1% Canada 7%
Corporate Finance $24.1 China 1%
England 5%
Vendor Finance $16.1
Germany 2%
Mexico 1%
Other 8%
Transportation
Consumer $12.3 Finance $13.6 U.S. 75%
Home Lending $9.8 Trade Finance $7.3
Item 1: Business
02.30230-Item1.qxp 3/6/08 1:09 PM Page 4
CORPORATE FINANCE and leaseback arrangements, as well as loans secured by

Our Corporate Finance segment provides a full spectrum of equipment. Our equipment financing clients represent major
financing alternatives to borrowers ranging from small compa- and regional airlines worldwide, North American railroad
nies to large multinationals with emphasis on middle market companies, and middle-market to larger-sized aerospace and
companies. We service clients in a broad array of industries defense companies.
with specialized groups serving commercial and industrial; This segment has been servicing the aerospace and rail
capital markets; communications, media and entertainment; industries for many years and has built a global presence with
energy; and healthcare sectors in the U.S. and abroad. We also operations in the United States, Canada, Europe and Asia. We
provide collateralized and government-secured loans to small have extensive experience in managing equipment over its full
businesses (such as SBA loans), leveraging broker and inter- life cycle, including purchasing new equipment, equipment
mediary relationships. maintenance, estimating residual values and re-marketing by
We offer loan structures ranging from working capital loans re-leasing or selling equipment.
secured by accounts receivable and inventories, term loans The aerospace group offers commercial aircraft financing,
secured by fixed assets to leveraged loans based on operating business aircraft and aerospace and defense financing. It
cash flow and enterprise valuation. Loans may be fixed or provides aircraft leasing and sales, asset management,
variable rate, senior or subordinated, and revolving or term. finance, banking, technical and engineering, aircraft valuation
Our clients typically use the proceeds for working capital, and advisory services. The team has built strong relationships
asset growth, acquisitions, debtor-in-possession financing, across the entire aerospace industry, including the major
and debt restructurings. Additionally, we provide equipment manufacturers, parts suppliers and carriers. These relation-
lending and leasing products, including loans, leases, whole- ships provide us with access to technical information, which
sale and retail financing packages, operating leases, and enhances our customer service and provides opportunities to
sale-leaseback arrangements to meet our customer’s needs. finance new business. Our clients include major and regional
We also offer clients an array of financial and advisory services. airlines around the world.
The unit offers capital markets structuring and syndication Our commercial aerospace business has offices in North
capabilities, as well as advisory services, a capability that we America, Europe and Asia and a global reach of customers in
PAGE 4
enhanced in 2007 with a strategic acquisition. We also offer 45 countries. Our international aerospace servicing center in
financial risk management services to selected customers, Dublin, Ireland, puts us closer to our growing international
whereby we will enter into offsetting derivative transactions client base and provides us with favorable tax treatment for
with a customer and a third party financial institution. As the certain aircraft leasing operations. Our commercial fleet
offsetting derivatives have like notional amounts and terms, we consists of 287 aircraft with a weighted average age of
retain only the counter–party risk. approximately 5 years placed with 105 clients around the
Industry focused teams originate business through various world. As of December 31, 2007, our commercial aerospace
intermediaries, referral sources, strategic partnerships and financing and leasing portfolio was $8.2 billion.
direct calling. We maintain relationships with selected banks, The business aircraft team offers financing and leasing pro-
finance companies, hedge funds and other lenders both to grams for owners of business jet aircraft and turbine
obtain business leads and distribute our products. We also helicopters primarily in the United States. The aerospace and
purchase and sell participation interests in syndicated loans defense business provides comprehensive financing solutions
from and to other financial institutions. to the aerospace and defense corporate finance market, as
Our small business lending unit originates and services Small well as the aerospace financial intermediary market.
Business Administration and conventional loans for commercial Our dedicated rail equipment group maintains relationships with
real estate financing, construction, business acquisition and numerous leading railcar manufacturers and calls directly on
business succession financing. We are a SBA preferred lender railroads and rail shippers throughout North America. Our rail
and have been recognized as the nation’s #1 SBA Lender (based portfolio, which totaled $4.4 billion at December 31, 2007,
on 7(a) program volume) in each of the last eight years. includes leases to all of the U.S. and Canadian Class I railroads
We earn interest revenue on receivables we keep on-balance (railroads with annual revenues of at least $250 million) and
sheet and recognize gains on receivables sold. We also earn other non-rail companies, such as shippers and power and
fees for servicing third party assets, which approximated energy companies. The operating lease fleet primarily includes:
$2.1 billion at year end. Small business lending activities are covered hopper cars used to ship grain and agricultural prod-
principally focused on the U.S. market. ucts, plastic pellets and cement; gondola cars for coal, steel coil
and mill service; open hopper cars for coal and aggregates; cen-
TRANSPORTATION FINANCE ter beam flat cars for lumber; boxcars for paper and auto parts;
and tank cars. Our railcar operating lease fleet has an average
Our Transportation Finance segment specializes in providing
age of approximately 6 years and approximately 86% (based on
customized leasing and secured financing primarily to end-
net investment) were manufactured in 1998 or later. Our total rail
users of aircraft, locomotives and railcars. Our transportation
fleet includes approximately 114,000 railcars and over 500 loco-
equipment financing products include operating leases, single
motives that we own, lease or service.
investor leases, equity portions of leveraged leases and sale
02.30230-Item1.qxp 3/6/08 1:09 PM Page 5
See “Concentrations” section of Item 7. Management’s Our vendor alliances feature traditional vendor finance pro-
Discussion and Analysis of Financial Condition and Results of grams, joint ventures, profit sharing and other transaction
Operations and Note 17 – Commitments and Contingencies of structures with large, sales-oriented partners. In the case of
Item 8. Financial Statements and Supplementary Data for fur- joint ventures, we engage in financing activities jointly with the
ther discussion of our aerospace portfolio. vendor through a distinct legal entity that is jointly owned. We
also use “virtual joint ventures,” by which we originate the
TRADE FINANCE assets on our balance sheet and share with the vendor the
Our Trade Finance segment provides factoring, receivable economic outcomes from the customer financing activity. A
and collection management products, and secured financing key part of these partnership programs is coordinating with
to businesses that operate in several industries including the vendor’s product offering systems to improve execution
apparel, textile, furniture, home furnishings and electronics. and reduce cycle times.
Although primarily U.S.-based, we have increased our inter- These alliances allow our vendor partners to focus on their
national business in Asia and Europe. CIT has many core competencies, reduce capital needs and drive incre-
relationships with factors located throughout Asia, and from mental sales volume. As a part of these programs, we offer
our full-service factoring company based in Frankfurt, our partners (1) financing to commercial and consumer end
Germany, we provide factoring and financing services to users for the purchase or lease of products, (2) enhanced
companies in Europe. sales tools such as asset management services, efficient
We offer a full range of domestic and international customized loan processing and real-time credit adjudication, and (3) a
credit protection, lending and outsourcing services that include single point of contact in our regional servicing hubs to
working capital and term loans, factoring, receivable manage- facilitate global sales. In turn, these alliances provide us
ment outsourcing, bulk purchases of accounts receivable, with a highly efficient origination platform as we leverage
import and export financing and letter of credit programs. our partners’ sales forces.
We provide financing to our clients, primarily manufacturing, Vendor Finance includes a small and mid-ticket commercial
through the purchase of accounts receivable owed to our business, which focuses on leasing office equipment, comput-
clients by their customers, typically retailers. We also guar- ers and other technology products primarily in the United
PAGE 5
antee amounts due to our client’s suppliers under letters of States and Canada. We originate products through relation-
credit collateralized by accounts receivable and other assets. ships with manufacturers, dealers, distributors and other
The purchase of accounts receivable is traditionally known as intermediaries as well as through direct calling.
“factoring” and results in the payment by the client of a fac- Vendor Finance also houses CIT Insurance Services, through
toring fee that is commensurate with the underlying degree which we offer insurance and financial protection products in
of credit risk and recourse, and which is generally a percent- key markets around the world. We leverage our existing dis-
age of the factored receivables or sales volume. We also may tribution capabilities and alliances with insurance and
advance funds to our clients, typically in an amount up to financial services providers, enabling us to offer protection
80% of eligible accounts receivable, charging interest on the products for small business and middle market clients and
advance (in addition to any factoring fees), and satisfying the consumers. Our offerings to middle market and small busi-
advance by the collection of the factored accounts receivable. ness customers range from commercial property & casualty
We integrate our clients’ operating systems with ours to insurance, employee benefits, key person life insurance, and
facilitate the factoring relationship. high net worth personal line coverage. For our consumer
Clients use our products and services for various purposes, clients, we offer property coverage, debt protection, credit
including improving cash flow, mitigating or reducing credit insurance, as well as supplemental insurance programs.
risk, increasing sales, and improving management informa-
tion. Further, with our TotalSourceSM product, our clients can CONSUMER
out-source their bookkeeping, collection, and other receiv- Our Consumer segment includes student lending and CIT
able processing to us. These services are attractive to Bank, a Utah-based industrial bank with deposit-taking
industries outside the traditional factoring markets. capabilities. Our consumer activities are principally focused
on the U.S. market.
VENDOR FINANCE
Our student lending unit, which markets under the name
We are a leading global vendor finance company with numer- Student Loan Xpress, offers student loan products, services,
ous vendor relationships and operations serving customers in and solutions to students, parents, schools, and alumni
over 30 countries. We have significant vendor programs in associations. We offer government-guaranteed student
information technology, telecommunications equipment, loans made under the Federal Family Education Loan
healthcare and other diversified asset types across multiple Program (FFELP), including consolidation loans, Stafford
industries. Through our global relationships with industry- loans, Parent Loans for Undergraduate Students (PLUS) and
leading equipment vendors, including manufacturers, dealers, Grad PLUS. We discontinued offering private loans during
and distributors, we deliver customized financing solutions to 2007. We originate and acquire loans through direct con-
both commercial and consumer customers of our vendor sumer marketing, school channel referrals and periodically
partners in a wide array of programs. purchase portfolios of loans. The majority of our student
Item 1: Business
02.30230-Item1.qxp 3/6/08 1:09 PM Page 6
loan portfolio is consolidation loans, but our portfolio of and have commenced originating corporate loans. The Bank is
Stafford and PLUS loans has continued to grow. Most of our chartered by the state of Utah as an industrial bank and is sub-
student loan portfolio is serviced in-house from our ject to regulation and examination by the Federal Deposit
Cleveland facility. Insurance Corporation and the Utah Department of Financial
Institutions.
During 2007, the federal government passed legislation with
respect to the student lending business. Among other See “Concentrations” section of Item 7. Management’s
things, the legislation reduces special allowance payments Discussion and Analysis of Financial Condition and Results of
paid to lenders by the federal government, increases loan Operations and “Note 23 – Goodwill and Intangible Assets” of
origination fees paid to the government by lenders, and Item 8. Financial Statements and Supplementary Data for fur-
reduces the lender guarantee percentage. The legislation ther discussion of our student lending portfolios.
went into effect for all new FFELP student loans with first
disbursements on or after October 1, 2007. The guarantee HOME LENDING
percentage, reduced from 97% to 95%, is in effect for loans The Home Lending segment consists primarily of a liquidating
originated after October 1, 2012. While the demographics of portfolio of home mortgage receivables and manufactured
this market remain strong, the returns related to future housing receivables. In July of 2007, we announced our intent
originations will be impacted by the recent legislation. to exit this business and closed the home lending origination
As a result of decreased market valuations for student lending platform in August 2007.
businesses and lower profit expectations resulting from The remaining portfolio is serviced out of our centralized
higher funding costs, we recorded goodwill and intangible servicing center in Oklahoma City, Oklahoma.
asset impairment charges during the last quarter of 2007.
See “Profitability and Key Business Trends” section of Item 7.
CIT Bank, with assets of $3.3 billion and deposits of $2.7 billion, Management’s Discussion and Analysis of Financial Condition
is located in Salt Lake City, Utah. Since its inception, the bank and Results of Operations for further discussion of our home
had been primarily funding consumer type loans. During late lending portfolios.
2007, we refined the Bank’s focus to fund commercial assets
PAGE 6
2007 SEGMENT PERFORMANCE

Earnings and Return Summary (dollars in millions)
Net Return on
Income/(Loss)
________________________ Equity
__________________
Corporate Finance $ 453.0 18.3%

Transportation Finance 271.1 16.3%
Trade Finance 164.0 17.8%
Vendor Finance 410.1
________________________ 23.6%
Commercial Segments 1,298.2
________________________ 19.1%
Consumer (274.9) (52.3%)
Home Lending (989.2) (171.8%)
Corporate and Other (145.1)
________________________ (2.1%)
Total $(111.0)
________________________ (1.6%)
________________________
See the “Results by Business Segments” and Item 7A. Quantitative and Qualitative Disclosures about Market
“Concentrations” sections of Item 7. Management’s Discussion Risk, and Notes 5 and 21 of Item 8. Financial Statements and
and Analysis of Financial Condition and Results of Operations and Supplementary Data, for additional information.
EMPLOYEES
CIT employed approximately 6,700 people at December 31, United States and approximately 1,845 were outside the
2007, of which approximately 4,855 were employed in the United States.
02.30230-Item1.qxp 3/6/08 1:09 PM Page 7
COMPETITION
Our markets are highly competitive, based on factors that vary We compete primarily on the basis of financing terms,
depending upon product, customer, and geographic region. structure, client service, and price. From time to time, our
Our competitors include captive and independent finance competitors seek to compete aggressively on the basis of
companies, commercial banks and thrift institutions, indus- these factors and we may lose market share to the extent
trial banks, leasing companies, insurance companies, hedge we are unwilling to match competitor product structure,
funds, manufacturers, and vendors. Many bank holding, leas- pricing or terms that do not meet our credit standards or
ing, finance, and insurance companies that compete with us return requirements.
have formed substantial financial services operations with
Other primary competitive factors include industry experience,
global reach. On a local level, community banks and smaller
equipment knowledge, and relationships. In addition, demand
independent finance and mortgage companies are competitive
for an industry’s services and products and industry regula-
with substantial local market positions. Many of our competi-
tions will affect demand for our products in some industries.
tors are large companies that have substantial capital,
technological, and marketing resources. Some of these com-
petitors are larger than we are and may have access to capital
at a lower cost than we do. The markets for most of our prod-
ucts have a large number of competitors.
REGULATION
In some instances, our operations are subject to supervision Department of Education, including Fifth Third Bank, CIT Bank
and regulation by federal, state, and various foreign govern- and Liberty Bank, as eligible lender trustees. CIT Small
mental authorities. Additionally, our operations may be Business Lending Corporation, a Delaware corporation, is
subject to various laws and judicial and administrative deci- licensed by and subject to regulation and examination by the
PAGE 7
sions imposing various requirements and restrictions. This U.S. Small Business Administration. CIT Capital Securities
oversight may serve to: L.L.C., a Delaware limited liability company, is a broker-dealer
licensed by the National Association of Securities Dealers, and is
_ regulate credit granting activities, including establishing
subject to regulation by the Financial Industry Regulatory
licensing requirements, if any, in various jurisdictions,
Authority and the Securities and Exchange Commission. CIT
_ establish maximum interest rates, finance charges and
Bank Limited, an English corporation, is licensed as a bank and
other charges,
broker-dealer and is subject to regulation and examination by
_ regulate customers’ insurance coverages,
the Financial Service Authority of the United Kingdom.
_ require disclosures to customers,
_ govern secured transactions, Our insurance operations are conducted through The
_ set collection, foreclosure, repossession and claims han- Equipment Insurance Company, a Vermont corporation,
dling procedures and other trade practices, Highlands Insurance Company Limited, a Barbados company,
_ prohibit discrimination in the extension of credit and and Equipment Protection Services (Europe) Limited, an Irish
administration of loans, and Company. Each company is licensed to enter into insurance
_ regulate the use and reporting of information related to a contracts. The local regulators in Vermont, Barbados, and
borrower’s credit experience and other data collection. Ireland regulate them. In addition, we have various banking
corporations in Brazil, France, Germany, Italy, Belgium,
Certain of our subsidiaries are subject to regulation from various
Sweden, and the Netherlands and a broker-dealer entity in
agencies. CIT Bank, a Utah industrial bank wholly owned by CIT,
Canada, each of which is subject to regulation and examina-
is subject to regulation and examination by the Federal Deposit
tion by banking regulators and securities regulators in their
Insurance Corporation and the Utah Department of Financial
home country.
Institutions. Student Loan Xpress, Inc., a Delaware corporation,
conducts its business through various banks authorized by the
Item 1: Business
02.30230-Item1.qxp 3/6/08 1:09 PM Page 8
GLOSSARY OF TERMS
Average Earning Assets (AEA) is the average of finance receiv- Lower of Cost or Market (LOCOM) relates to the carrying value
ables, operating lease equipment, financing and leasing of an asset. The cost refers to the current book balance, and
assets held for sale, and some investments, less the credit if that balance is higher than the market value, then an
balances of factoring clients. We use this average for certain impairment charge is reflected in the current period state-
key profitability ratios, including return on AEA and net finance ment of income.
revenue as a percentage of AEA.
Managed Assets are comprised of finance receivables, operating
Average Finance Receivables (AFR) is the average of finance lease equipment, financing and leasing assets held for sale,
receivables and includes loans and finance leases. It excludes some investments, and receivables securitized and still man-
operating lease equipment. We use this average to measure aged by us. The change in managed assets during a reporting
the rate of net charge-offs on an owned basis for the period. period is one of our measurements of asset growth.
Capital is the sum of common equity, preferred stock, junior Net Finance Revenue reflects finance revenue after interest
subordinated notes, convertible debt (equity units) and pre- expense and depreciation on operating lease equipment,
ferred capital securities. which is a direct cost of equipment ownership. This subtotal is
Derivative Contract is a contract whose value is derived from a a key measure in the evaluation of our business.
specified asset or an index, such as interest rates or foreign Net Finance Revenue after Credit Provision reflects net finance
currency exchange rates. As the value of that asset or index revenue after credit costs. This subtotal is also called “risk
changes, so does the value of the derivative contract. We use adjusted revenue” by management as it reflects the periodic
derivatives to reduce interest rate, foreign currency or credit cost of credit risk.
risks. We also offer derivatives to our own customers to
enable those customers to reduce their own interest rate, for- Net (loss) income (attributable) available to Common
eign currency or credit risks. The derivative contracts we use Shareholders (“net (loss) income”) reflects net (loss) income
include interest-rate swaps, cross-currency swaps, foreign after preferred dividends and is utilized to calculate return on
exchange forward contracts, and credit default swaps. common equity and other performance measurements.
PAGE 8
Efficiency Ratio is the percentage of salaries and general oper- Non-GAAP Financial Measures are balances, amounts or
ating expenses to Total Net Revenue. We use the efficiency ratios that do not readily agree to balances disclosed in finan-
ratio to measure the level of expenses in relation to revenue cial statements presented in accordance with accounting
earned. principles generally accepted in the U.S. We use non-GAAP
measures to provide additional information and insight into
Finance Revenue includes interest income on finance receiv-
how current operating results and financial position of the
ables and rental income on operating leases.
business compare to historical operating results and finan-

Financing and Leasing Assets include loans, capital and finance cial position of the business and trends, as well as adjusting
leases, leveraged leases, operating leases, assets held for for certain nonrecurring or unusual transactions.
sale, and other investments.
Non-performing Assets include loans placed on non-accrual
Held for Investment describes loans that CIT has the ability status, typically after becoming 90 days delinquent or prior
and intent to hold in portfolio for the foreseeable future or to that time due to doubt of collectibility of principal and
until maturity. These are carried at amortized cost, unless it interest, and repossessed assets.
is determined that other than temporary impairment has
occurred, then a charge is recorded in the current period Other Income includes syndication fees, gains from dispositions
statement of income. of receivables and equipment, factoring commissions, loan
servicing and other fees.
Held for Sale describes loans that we intend to sell in the near-
term. These are carried at the lower of cost or market, with a Retained Interest is the portion of the interest in assets we
charge reflected in the current period statement of income if retain when we sell assets in a securitization transaction.
the cost (or current book value) exceeds the market value. Residual Values represent the estimated value of equipment at
Lease – capital and finance is an agreement in which the party the end of the lease term. For operating leases, it is the value
who owns the property (lessor) permits another party (lessee) to which the asset is depreciated at the end of its useful eco-
to use the property with substantially all of the economic ben- nomic life (i.e., “salvage” or “scrap value”).
efits and risks of ownership passed to the lessee. Return on Common Equity (ROE) is net income available to
Lease – leveraged is a lease in which a third party, a long-term common stockholders, expressed as a percentage of average
creditor, provides non-recourse debt financing. We are party common equity, and is a key measurement of profitability.
to these lease types either as a creditor or as the lessor.
Special Purpose Entity (SPE) is a distinct legal entity created for
Lease – operating is a lease in which we retain beneficial a specific purpose in order to isolate the risks and rewards of
ownership of the asset, collect rental payments, recognize owning its assets and incurring its liabilities. We typically use
depreciation on the asset, and retain the risks of ownership, SPEs in securitization transactions, joint venture relation-
including obsolescence. ships, and certain structured leasing transactions.
02.30230-Item1.qxp 3/6/08 1:09 PM Page 9
Syndication and Sale of Receivables result from originating valuation allowances from total net revenue and other income
leases and receivables with the intent to sell a portion, or the and is a measurement of our revenue growth.
entire balance, of these assets to other financial institutions.
Unpaid Principal Balance (UPB) refers to the remaining unpaid
We earn and recognize fees and/or gains on sales, which are
principal balance of a loan and is used in the discussion sur-
reflected in other income, for acting as arranger or agent in
rounding home lending assets and reflects the carrying value,
these transactions.
before applying the recorded discount or valuation allowance.
Tangible Capital and Metrics exclude goodwill, other intangible
Yield-related Fees are collected in connection with our
assets and some comprehensive income items. We use tangi-
assumption of underwriting risk in certain transactions in
ble metrics in measuring capitalization.
addition to interest income. We recognize yield-related fees,
Total Net Revenue is the total of net finance revenue plus other which include prepayment fees and certain origination fees, in
income. This amount excludes provision for credit losses and Finance Revenue over the life of the lending transaction.
ITEM 1A. Risk Factors

You should carefully consider the following discussion of risks, terms of any such equity transactions may subject existing
and the other information provided in this Annual Report on security holders to potential subordination or dilution and may
Form 10-K. Our business activities involve various elements of involve change in governance.
risk. The risks described below are not the only ones facing
us. Additional risks that are presently unknown to us or that WE MAY BE ADVERSELY AFFECTED BY DETERIORATION IN
we currently deem immaterial may also impact our business. ECONOMIC CONDITIONS THAT IS GENERAL OR SPECIFIC
PAGE 9
We consider the following issues to be the most critical risks TO INDUSTRIES, PRODUCTS OR GEOGRAPHIES.
to the success of our business: A recession or downturn in the U.S. or global economies or
affecting specific industries, geographic locations and/or
OUR LIQUIDITY OR ABILITY TO RAISE DEBT OR EQUITY products could make it difficult for us to originate new busi-
CAPITAL MAY BE LIMITED. ness, given the resultant reduced demand for consumer or
We rely upon access to the capital markets to provide sources of commercial credit. In addition, a downturn in certain indus-
liquidity and to fund asset growth. These markets have exhib- tries may result in a reduced demand for the products that we
ited heightened volatility and reduced liquidity. Recently, liquidity finance in that industry or negatively impact collection and
in the capital markets has been more constrained and interest asset recovery efforts.
rates available to us have increased significantly relative to Credit quality also may be impacted during an economic slow-
benchmark rates, such as U.S. treasury securities and LIBOR. down or recession as borrowers may fail to meet their debt
As a result, our cost of funds has increased and we have shifted payment obligations. Adverse economic conditions may also
our funding sources primarily to asset-backed securities and result in declines in collateral values. Accordingly, higher
other secured credit facilities, including both on-balance sheet credit and collateral related losses could impact our financial
and off-balance sheet securitizations, rather than unsecured position or operating results.
debt securities. Adverse changes in the economy, long-term
For example, decreased demand for the products of various
disruption in the capital markets, deterioration in our business
manufacturing customers due to a general economic slow-
performance or downgrades in our credit ratings could limit our
down may adversely affect their ability to repay their loans and
access to these markets or increase our cost of capital. Any one
leases with us. Similarly, a decrease in the level of airline pas-
of these developments would adversely affect our business
senger traffic due to general economic slowdown or a decline
operating results and financial condition. A downgrade in our
in shipping volumes due to a slowdown in particular industries
short-term credit ratings could result in our having to issue
may adversely affect our aerospace or rail businesses.
commercial paper to a different group of investors, as a portion,
or potentially all, of our current investor base could require WE MAY BE ADVERSELY AFFECTED BY CONTINUED
maintenance of our short-term credit ratings. DETERIORATION IN MARKET CONDITIONS AND CREDIT
We may also raise additional equity capital through the sale of QUALITY IN THE HOME LENDING AND RELATED
common stock, preferred stock, or securities that are convert- INDUSTRIES.
ible into common stock. There are no restrictions on entering The U.S. residential market and home lending industry began
into the sale of any such equity securities in either public or showing signs of stress in early 2007, with credit conditions
private transactions, except that any private transaction deteriorating rapidly in the second quarter of 2007 and contin-
involving more than 20% of the shares outstanding will require uing into the third and fourth quarters of 2007, including
shareholder approval. Under current market conditions, the
Item 1A: Risk Factors

02.30230-Item1.qxp 3/6/08 1:09 PM Page 10
increased rates of defaults and foreclosures, stagnating or derivative counterparties, customers, manufacturers, or
declining home prices, and declining sales in both the new other parties with which we conduct business materially
construction and the resale markets. deteriorates, we may be exposed to credit risk related losses
that may negatively impact our financial condition, results of
These market conditions were reflected in the deterioration of
operations or cash flows.
credit metrics of our home lending portfolio and the
decreased market liquidity for such portfolios and resulted in
WE MAY BE ADVERSELY AFFECTED BY SIGNIFICANT
higher charge-offs and significant valuation allowances
through year end 2007. These changes in the home lending CHANGES IN INTEREST RATES.
and home construction industries have also resulted in Although we generally employ a matched funding approach to
reduced demand for certain types of railcars that are used to managing our interest rate risk, including matching the
transport building materials, produced higher volatility and repricing characteristics of our assets with our liabilities, sig-
reduced demand from investors in the high yield loan markets, nificant increases in market interest rates or widening of our
generated concerns about credit quality in general, and ham- credit spreads, or the perception that an increase may occur,
pered activity in the syndication market, among other effects. could adversely affect both our ability to originate new finance
receivables and our profitability. Conversely, a decrease in
We will continue to be adversely affected by conditions in the
interest rates could result in accelerated prepayments of
U.S. residential home lending industry if they continue to dete-
riorate further. It is also likely that we will be adversely affected owned and managed finance receivables.
if the conditions in the home lending industry negatively impact
WE MAY BE REQUIRED TO TAKE AN IMPAIRMENT
our other consumer businesses or other parts of our credit
CHARGE FOR GOODWILL OR INTANGIBLE ASSETS
portfolio or the U.S. or world economies. Finally, we may be
RELATED TO ACQUISITIONS.
adversely affected if the conditions in the home lending indus-
try result in new or increased regulation of financing and We have acquired certain portions of our business and certain
leasing companies in general or with respect to specific prod- portfolios through acquisitions and bulk purchases. Further,
ucts or markets. as part of our long-term business strategy, we may continue to
pursue acquisitions of other companies or asset portfolios. In
OUR RESERVES FOR CREDIT LOSSES MAY PROVE connection with prior acquisitions and portfolio purchases, we
PAGE 10
INADEQUATE OR WE MAY BE NEGATIVELY AFFECTED BY have accounted for the portion of the purchase price paid in
CREDIT RISK EXPOSURES. excess of the book value of the assets acquired as goodwill or
Our business depends on the creditworthiness of our cus- intangible assets, and we may be required to account for simi-
tomers. We maintain a consolidated reserve for credit losses lar premiums paid on future acquisitions in the same manner.
on finance receivables that reflects management’s judgment Under the applicable accounting rules, goodwill is not amor-
of losses inherent in the portfolio. We periodically review our tized and is carried on our books at its original value, subject
consolidated reserve for adequacy considering economic to periodic review and evaluation for impairment, while intan-
conditions and trends, collateral values and credit quality gible assets are amortized over the life of the asset. If, as a
indicators, including past charge-off experience and levels of result of our periodic review and evaluation of our goodwill
past due loans and non-performing assets. We cannot be and intangible assets for potential impairment, we determine
certain that our consolidated reserve for credit losses will be that changes in the business itself, the economic environ-
adequate over time to cover credit losses in our portfolio ment including business valuation levels and trends, or the
because of adverse changes in the economy or events legislative or regulatory environment have adversely affected
adversely affecting specific customers, industries or mar- the fair value of the business, we may be required to take an
kets. If the credit quality of our customer base materially impairment charge to the extent that the carrying values of
decreases, if the risk of a market, industry, or group of cus- our goodwill or intangible assets exceeds the fair value of the
tomers changes significantly, or if our reserves for credit business. As a result of our 2007 fourth quarter analysis of
losses are not adequate, our business, financial condition goodwill and intangible assets associated with our student
and results of operations could suffer. For example, credit lending business, we recorded impairment charges. Also, if
performance in the home lending industry, and particularly in we sell a business for less than the book value of the assets
the sub-prime market, has been declining over the past year. sold, plus any goodwill or intangible assets attributable to
This decline in the home lending industry has been reflected that business, we may be required to take an impairment
in our home lending portfolio during 2007, resulting in charge on all or part of the goodwill and intangible assets
increased charge-offs and significant valuation allowances. attributable to that business.
In addition to customer credit risk associated with loans and
BUSINESSES OR ASSET PORTFOLIOS ACQUIRED MAY
leases, we are also exposed to other forms of credit risk,
NOT PERFORM AS EXPECTED AND WE MAY NOT BE ABLE
including counterparties to our derivative transactions, loan
TO ACHIEVE ADEQUATE CONSIDERATION FOR PLANNED
sales, syndications and equipment purchases. These coun-
DISPOSITIONS.
terparties include other financial institutions, manufacturers
and our customers. To the extent that our credit underwrit- As part of our long-term business strategy, we may pursue
ing processes or credit risk judgments fail to adequately acquisitions of other companies or asset portfolios as well as
identify or assess such risks, or if the credit quality of our dispose of non-strategic businesses or portfolios. Future
02.30230-Item1.qxp 3/6/08 1:09 PM Page 11
acquisitions may result in potentially dilutive issuances of factors as the board of directors may consider to be relevant. If
equity securities and the incurrence of additional debt, which any of these factors are adversely affected it may impact our
could have a material adverse effect on our business, financial ability to pay dividends on our common stock.
condition and results of operations. Such acquisitions may
In addition, the terms of our outstanding preferred stock and
involve numerous other risks, including difficulties in integrat-
junior subordinated notes restrict our ability to pay dividends
ing the operations, services, products and personnel of the
on our common stock if we do not make distributions on our
acquired company; the diversion of management’s attention
preferred stock and subordinated notes. Further, we are pro-
from other business concerns; entering markets in which we
hibited from declaring dividends on our preferred stock and
have little or no direct prior experience; and the potential loss
from paying interest on our junior subordinated notes if we do
of key employees of the acquired company. In addition,
not meet certain financial tests, provided that the limitation
acquired businesses and asset portfolios may have credit-
does not apply if we pay such dividends and interest out of net
related risks arising from substantially different underwriting
proceeds that we have received from the sale of common
standards associated with those businesses or assets.
stock. We sold common stock to cover such dividend and
With respect to our planned disposition of certain home lend- interest payments during the third and fourth quarters of 2007
ing assets held for sale, or any future dispositions of our and the first quarter of 2008, and we obtained a forward com-
businesses or asset portfolios, there can be no assurance that mitment from two investment banks to purchase additional
we will receive adequate consideration for those businesses or shares, at our option, in the second and third quarters of 2008.
assets at the time of their disposition or that we will be able to If we are unable to sell our common stock in the future, and
adequately replace the volume associated with the businesses we fail to meet the requisite financial tests, then we will be
or asset portfolios that we dispose of with higher-yielding prohibited from declaring dividends on our preferred stock,
businesses or asset portfolios having acceptable risk charac- paying interest on our junior subordinated notes, or declaring
teristics. As a result, our future disposition of businesses or dividends on our common stock.
asset portfolios could have a material adverse effect on our
business, financial condition and results of operations. COMPETITION FROM BOTH TRADITIONAL COMPETITORS
AND NEW MARKET ENTRANTS MAY ADVERSELY AFFECT
ADVERSE OR VOLATILE MARKET CONDITIONS MAY OUR RETURNS, VOLUME AND CREDIT QUALITY.
PAGE 11
REDUCE FEES AND OTHER INCOME.
Our markets are highly competitive and are characterized by
In 2005, we began pursuing strategies to leverage our competitive factors that vary based upon product and geo-
expanded asset generation capability and diversify our rev- graphic region. We have a wide variety of competitors that
enue base to increase other income as a percentage of total include captive and independent finance companies, commer-
revenue. We invested in infrastructure and personnel focused cial banks and thrift institutions, industrial banks, community
on increasing other income in order to generate higher levels banks, leasing companies, hedge funds, insurance companies,
of syndication and participation income, advisory fees, servic- mortgage companies, manufacturers and vendors.
ing fees and other types of fee income. These revenue
streams are dependent on market conditions and, therefore, Competition from both traditional competitors and new market
can be more volatile than interest on loans and rentals on entrants has intensified due to increasing recognition of the
leased equipment. Current market conditions, including attractiveness of the commercial finance markets. We compete
lower liquidity levels, have had a direct impact on syndication primarily on the basis of pricing, terms and structure. To the
activity, and have resulted in lower fee generation. If we are extent that our competitors compete aggressively on any com-
unable to sell or syndicate a transaction after it is originated, bination of those factors, we could lose market share. Should
this activity will involve the assumption of greater underwrit- we match competitors’ terms, it is possible that we could expe-
ing risk than we originally intended and could increase our rience margin compression and/or increased losses.
capital requirements to support our business.
WE MAY NOT BE ABLE TO REALIZE OUR ENTIRE
Continued disruption to the capital markets, our failure to INVESTMENT IN THE EQUIPMENT WE LEASE.
implement these initiatives successfully, or the failure of
The realization of equipment values (residual values) at the end
such initiatives to result in increased asset and revenue
of the term of a lease is an important element in the leasing
levels could adversely affect our financial position and
business. At the inception of each lease, we record a residual
results of operations.
value for the leased equipment based on our estimate of the
ADVERSE FINANCIAL RESULTS OR OTHER FACTORS MAY future value of the equipment at the expected disposition date.
LIMIT OUR ABILITY TO PAY DIVIDENDS Internal equipment management specialists, as well as exter-
nal consultants, determine residual values.
Our board of directors decides whether we will pay dividends
on our common stock. That decision depends upon, among A decrease in the market value of leased equipment at a rate
other things, general economic and business conditions, our greater than the rate we projected, whether due to rapid
strategic and operational plans, our financial results and con- technological or economic obsolescence, unusual wear and
dition, contractual, legal and regulatory restrictions on the tear on the equipment, excessive use of the equipment, or
payment of dividends by us, our credit ratings, and such other other factors, would adversely affect the residual values of
Item 1A: Risk Factors

02.30230-Item1.qxp 3/6/08 1:09 PM Page 12
such equipment. Further, certain equipment residual values, THE REGULATED ENVIRONMENT IN WHICH WE OPERATE
including commercial aerospace residuals, are dependent on MAY ADVERSELY AFFECT US.
the manufacturer’s or vendor’s warranties, reputation and Our domestic operations are subject, in certain instances, to
other factors. Consequently, there can be no assurance that supervision and regulation by state and federal authorities,
we will realize our estimated residual values for equipment. including the Federal Deposit Insurance Corporation, the Utah
The degree of residual realization risk varies by transaction Department of Financial Institutions, the U.S. Small Business
type. Capital leases bear the least risk because contractual Administration, the FINRA, the SEC and various state insurance
payments cover approximately 90% of the equipment’s cost regulators, and may be subject to various laws and judicial and
at the inception of the lease. Operating leases have a higher administrative decisions imposing various requirements and
degree of risk because a smaller percentage of the equip- restrictions. Noncompliance with applicable statutes or
ment’s value is covered by contractual cashflows at lease regulations could result in the suspension or revocation of any
inception. Leveraged leases bear the highest level of risk as license or registration at issue, as well as the imposition of civil
third parties have a priority claim on equipment cashflows. fines and criminal penalties.
The financial services industry is heavily regulated in many
INVESTMENT IN AND REVENUES FROM OUR FOREIGN jurisdictions outside the United States. As a result, growing
OPERATIONS ARE SUBJECT TO THE RISKS AND our international operations may be affected by the varying
REQUIREMENTS ASSOCIATED WITH TRANSACTING requirements of these jurisdictions. CIT Bank Limited, is
BUSINESS IN FOREIGN COUNTRIES. licensed as a bank and a broker-dealer and is subject to regu-
An economic recession or downturn, increased competition, or lation and examination by the Financial Services Authority of
business disruption associated with the political or regulatory the United Kingdom. We also operate various banking corpo-
environments in the international markets in which we operate rations in Brazil, France, Italy, Belgium, Sweden and The
could adversely affect us. In addition, while we generally hedge Netherlands, and a broker-dealer entity in Canada, each of
our translation and transaction exposures, foreign currency which is subject to regulation and examination by banking reg-
exchange rate fluctuations, or the inability to hedge effectively ulators and securities regulators in their home country. Our
in the future, could have a material adverse effect on our subsidiary, CIT Bank, a Utah industrial bank, is subject to reg-
investment in international operations and the level of interna- ulation and examination by the FDIC and the Utah Department
PAGE 12
tional revenues that we generate from international asset of Financial Institutions. Finally, our subsidiary that operates
based financing and leasing. Reported results from our opera- our insurance business, Highlands Insurance Company
tions in foreign countries may fluctuate from period to period Limited, is a Barbados company and therefore regulated by
due to exchange rate movements in relation to the U.S. dollar, Barbados laws and regulations. Given the evolving nature of
particularly exchange rate movements in the Canadian dollar, regulations in many of these jurisdictions, it may be difficult
which is our largest non-U.S. exposure. for us to meet these requirements even after we establish
Foreign countries have various compliance requirements for operations and receive regulatory approvals. Our inability to
financial statement audits and tax filings, which are required remain in compliance with regulatory requirements in a par-
to obtain and maintain licenses to transact business. ticular jurisdiction could have a material adverse effect on our
operations in that market and on our reputation generally.
ITEM 1B. Unresolved Staff Comments

There are no unresolved SEC staff comments.
ITEM 2. Properties
CIT operates in the United States, Canada, Europe, Latin majority of which is leased. Such office space is suitable and
America, Australia and the Asia-Pacific region. CIT occupies adequate for our needs and we utilize, or plan to utilize, sub-
approximately 2.1 million square feet of office space, the stantially all of our leased office space.
02.30230-Item1.qxp 3/6/08 1:09 PM Page 13
ITEM 3. Legal Proceedings

STUDENT LOAN INVESTIGATIONS CIT produce the billing and invoicing histories for a portfolio of
Student Loan Xpress, Inc. (“SLX”), a subsidiary of CIT, is customer accounts that CIT purchased from a third-party ven-
engaged in the student lending business. In connection with dor. The request was made in connection with an ongoing
investigations into (i) the relationships between student investigation being conducted by federal authorities into
lenders and the colleges and universities that recommend billing practices involving that portfolio. State authorities in
such lenders to their students, and (ii) the business practices California have been conducting a parallel investigation. It
of student lenders, CIT and/or SLX have received requests for appears the investigations are being conducted under the
information from several state Attorneys General and several Federal False Claims Act and its California equivalent. CIT is
federal governmental agencies. In May, 2007, CIT entered into cooperating with these investigations. Based on the facts
an Assurance of Discontinuance (the “AOD”) with the New York known to date, CIT cannot determine the outcome of these
Attorney General (the “NYAG”), pursuant to which CIT con- investigations at this time.
tributed $3.0 million into a fund established to educate
students and their parents concerning student loans and OTHER LITIGATION
agreed to cooperate with the NYAG’s investigation, in In addition, there are various legal proceedings and govern-
exchange for which, the NYAG agreed to discontinue its inves- ment investigations against or including CIT, which have
tigation concerning certain alleged conduct by SLX. CIT is fully arisen in the ordinary course of business. While the outcomes
cooperating with the remaining investigations. of the ordinary course legal proceedings and the related activi-
ties are not certain, based on present assessments,
VENDOR FINANCE BILLING AND INVOICING INVESTIGATION management does not believe that they will have a material
In the second quarter of 2007, the office of the United States adverse effect on CIT.
Attorney for the Central District of California requested that
PAGE 13
ITEM 4. Submission of Matters to a Vote of Security Holders
We did not submit any matters to a vote of security holders
during the three months ended December 31, 2007.
Item 4: Submission of Matters to a Vote of Security Holders

PART TWO
ITEM 5. Market for Registrant’s Common Equity and Related

Stockholder Matters and Issuer Purchases of Equity
Securities
Our common stock is listed on the New York Stock Exchange. closing prices for CIT’s common stock for each of the quar-
The following table sets forth the high and low reported terly periods in the two years ended December 31, 2007.
2007
_______________________________________ 2006
_______________________________________
Common Stock Price High
_____________ Low
_____________ High
_____________ Low
_____________
First Quarter $61.36 $50.96 $55.05 $51.38
Second Quarter $61.16 $52.80 $55.95 $48.89
Third Quarter $57.63 $33.28 $53.41 $42.44
Fourth Quarter $41.85 $22.76 $56.35 $47.74
During the year ended December 31, 2007, we paid a dividend of thirtieth day prior to the interest payment date, as the case may
$0.25 per common share each quarter for a total of $1.00 per be. Our average four quarters fixed charge ratio is defined as (a)
share. During the year ended December 31, 2006, we paid a divi- the sum, for our most recently completed four fiscal quarters, of
dend of $0.20 per common share each quarter for a total of $0.80 the quotient of (x) our earnings (excluding income taxes, interest
per share. On January 15, 2008, the Board of Directors approved a expense, extraordinary items, goodwill impairment and amounts
quarterly dividend of $0.25 per share to be paid February 29, related to discontinued operations) and (y) interest expense plus
2008, to shareholders of record on February 15, 2008. preferred dividends, divided by (b) four.
Our dividend practice is to pay a dividend while maintaining Our average four-quarter fixed charge ratio was below 1.10 at
PAGE 14
sufficient capital to support our business. The declaration and December 31, 2007. Notwithstanding the foregoing, we may
payment of future dividends are subject to the discretion of our declare such dividends and pay such interest to the extent of
board of directors. Any determination as to the payment of div- any net proceeds that we have received from the sale of com-
idends, including the level of dividends, will depend on, among mon stock during the 90 days prior to the declaration of the
other things, general economic and business conditions, our dividend or the 180 days prior to the interest payment date.
strategic and operational plans, our financial results and con- On January 23, 2008, CIT Group Inc. entered into a Sales Agency
dition, contractual, legal and regulatory restrictions on the
Agreement with Morgan Stanley & Co. Incorporated and

payment of dividends by us, and such other factors as the Citigroup Global Markets Inc., pursuant to which CIT agreed to
board of directors may consider to be relevant. sell shares of its common stock for an aggregate purchase price
The terms of our outstanding preferred stock and junior subordi- of up to $31.5 million. As a result, the Company sold 1,281,519
nated notes restrict our ability to pay dividends on our common shares on January 30, 2008 and satisfied the conditions neces-
stock if and so long as we do not make distributions on our pre- sary to permit the declaration and payment of preferred stock
ferred stock or we do not pay all accrued and unpaid interest on dividends payable February 29, 2008.
our junior subordinated notes, in full when due. Further, we are As of February 15, 2008, there were 77,727 beneficial owners
prohibited from declaring dividends on our preferred stock and of CIT common stock.
from paying interest on our junior subordinated notes if, among
other things, our average four quarters fixed charge ratio is less All equity compensation plans in effect during 2007 were approved
than or equal to 1.10 on the dividend declaration date or on the by our shareholders, and are summarized in the following table.
Number of Securities
Remaining Available for
Number of Securities Future Issuance Under
to be Issued Weighted-Average Equity Compensation Plans
Upon Exercise of Exercise Price of (Excluding Securities
Outstanding Options(1)
__________________________________________ Outstanding Options
_______________________________________ Reflected in Column (A))
___________________________________________________
(A) (B) (C)
Equity Compensation Plans
Approved by Security Holders 12,262,634 $42.94 8,963,793
(1) Excludes 189,687 unvested restricted shares and 1,986,608 unvested performance shares outstanding under the Long-Term Equity
Compensation Plan.
We had no equity compensation plans that were not approved by plans, including the weighted average exercise price, see Item 8.
shareholders. For further information on our equity compensation Financial Statements and Supplementary Data, Note 16.
The following table details the repurchase activity of CIT common stock during the quarter ended December 31, 2007.
Total Number of Maximum Number
Total Shares Purchased of Shares that May
Number of Average as Part of Publicly Yet be Purchased
Shares Price Paid Announced Plans Under the Plans
Purchased
__________________ Per Share
_________________ or Programs
______________________________ or Programs
_______________________________
Balance at September 30, 2007 24,762,422
__________________ 689,096
October 1 – 31, 2007 – – – 689,096

November 1 – 30, 2007 – – – 689,096
December 1 – 31, 2007 –
__________________ – – 689,096
Total Purchases —
__________________
Reissuances(1) 297,848
__________________
Balance at December 31, 2007 24,464,574
__________________
__________________
(1) Includes the issuance of 235,800 shares of our common stock to permit declaration of fourth quarter dividends, as well as exercise of stock
options and for the employee stock purchase plan.
The remaining shares that may yet be repurchased relate to prices as permitted by applicable laws, and subject to market
the 2007 continuation of the common stock repurchase pro- conditions and other factors. The program may be discontin-
gram to acquire up to an additional 5 million shares of our ued at any time and is not expected to have a significant
outstanding common stock in conjunction with employee impact on our capitalization.
equity compensation programs. The program authorizes the
Company to purchase shares on the open market, in other pri- STOCK PERFORMANCE GRAPH
PAGE 15
vately negotiated transactions or a combination thereof from The following graph compares the yearly cumulative total
time to time over a two-year period beginning January 17, stockholder return of our common stock during the last five
2007. The repurchased common stock is held as treasury years to the cumulative total return of the S&P Financial Index
shares and may be used for the issuance of shares under CIT’s and the S&P 500 Index for the same period. The results are
employee stock plans. Acquisitions under the share repur- based on an assumed $100 invested at December 31, 2002,
chase program will be made from time to time at prevailing and daily reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
$350
$300
$250
$200
$150
$100
$50
$0
12/31/02
________________ 12/31/03
_________________ 12/31/04
________________ 12/31/05
________________ 12/31/06
________________ 12/31/07
_________________
CIT $100.00 $187.19 $241.98 $277.26 $303.46 $133.83
S&P 500 $100.00 $128.68 $142.68 $149.69 $173.32 $182.84
S&P Financial $100.00 $131.03 $145.29 $154.73 $184.48 $150.32
Item 5: Market for Registrant’s Common Equity

03.30230-Part2.qxp 3/6/08 1:20 PM Page 16
ITEM 6. Selected Financial Data

The following tables set forth selected consolidated financial Discussion and Analysis of Financial Condition and Results of
information regarding our results of operations and balance Operations and Item 7A. Quantitative and Qualitative Disclosures
sheets. The data presented below is explained further in, and about Market Risk and Item 8. Financial Statements and
should be read in conjunction with, Item 7. Management’s Supplementary Data.
(At or for the Years Ended December 31, dollars in millions, except per share data)
2007
________________ 2006
________________ 2005
_________________ 2004
________________ 2003
________________
Results of Operations
Total net revenue $ 3,600.4 $ 3,051.4 $ 2,879.2 $ 2,438.1 $ 2,162.4
Provision for credit losses 593.8 222.2 217.0 214.2 387.3
Valuation allowance - receivables held for sale 1,271.4 15.0 106.6 15.7 –
Salaries and general operating expenses 1,478.7 1,382.6 1,113.8 1,012.1 888.2
Net income (loss) (111.0) 1,015.8 936.4 753.6 566.9
Net income (loss) per share — diluted (0.58) 5.00 4.44 3.50 2.66
Dividends per share 1.00 0.80 0.61 0.52 0.48
Balance Sheet Data
Total finance receivables $62,536.5 $55,064.9 $44,294.5 $35,048.2 $31,300.2
Reserve for credit losses 831.5 659.3 621.7 617.2 643.7
PAGE 16
Operating lease equipment, net 12,610.5 11,017.9 9,635.7 8,290.9 7,615.5

Goodwill and intangible assets, net 1,152.5 1,008.4 1,011.5 596.5 487.7
Total assets 90,248.0 77,485.7 63,386.6 51,111.3 46,342.8
Total debt and deposits 73,804.2 60,704.8 47,864.5 37,724.8 33,668.6
Total stockholders’ equity 6,960.6 7,751.1 6,962.7 6,055.1 5,394.2
Selected Data and Ratios
Profitability
Net income (loss) as a percentage of average common
stockholders’ equity (1.6)% 15.0% 15.1% 13.2% 10.9%
Net finance revenue as a percentage of average earning assets 2.84% 3.11% 3.40% 3.94% 3.64%
Efficiency ratio 41.1% 45.3% 38.7% 41.5% 41.1%
Credit Quality
60+ days contractual delinquency as a percentage of
finance receivables 3.43% 2.40% 1.71% 1.73% 2.16%
Net credit losses as a percentage of average finance receivables 0.45% 0.45% 0.60% 0.91% 1.77%
Reserve for credit losses as a percentage of finance receivables 1.33% 1.20% 1.40% 1.76% 2.06%
Reserve for credit losses, excluding specific reserves as a
percentage of finance receivables, excluding guaranteed
student loans and home lending 1.22% 1.19% 1.24% 1.38% 1.40%
Reserve for credit losses as a percentage of non-performing
assets, excluding guaranteed student loans and home lending 121.1% 154.3% 158.5% 122.6% 98.3%
Other
Total managed assets $83,231.0 $74,163.2 $62,866.4 $53,470.6 $49,735.6
Tangible stockholders’ equity to managed assets 8.8% 9.4% 9.8% 10.7% 10.4%
03.30230-Part2.qxp 3/6/08 1:20 PM Page 17
ITEM 7. Management’s Discussion and Analysis of Financial

Condition and Results of Operations
and
ITEM 7A. Quantitative and Qualitative Disclosures about
Market Risk
INTRODUCTION
CIT Group Inc., a Delaware corporation (“we,” “CIT” or the In the following discussion we use financial terms that are rel-
“Company”), is a global commercial finance company that was evant to our business. You can find a glossary of other key
founded in 1908. CIT provides financing and leasing capital for terms used in our business in Part I Item 1. Business Section.
companies and consumers in a wide variety of industries,
This “Management’s Discussion and Analysis of Financial
offering vendor, equipment, commercial, factoring, student
Condition and Results of Operations” and “Quantitative and
lending and structured financing products, as well as man-
Qualitative Disclosures about Market Risk” contain certain non-
agement advisory services. CIT operates primarily in North
GAAP financial measures. See “Non-GAAP Financial
America, with locations in Europe, Latin America, Australia
Measurements” for reconciliation of our non-GAAP financial
and the Asia-Pacific region.
measures to the comparable GAAP financial measures.
KEY PERFORMANCE METRICS AND MEASUREMENTS
PAGE 17
Profitability Our ability to generate income on investments _ Net income per common share (EPS);
to produce returns to our shareholders and build our capi- _ Net income as a percentage of average common equity
tal base to support future growth. We measure our (ROE); and
performance in this area by: _ Net income as a percentage of average earning assets (ROA).
Asset Generation Our ability to originate new business and _ Origination volumes by unit; and
build our earning assets. We measure our performance in _ Levels of financing and leasing assets, and managed
these areas by: assets.
Revenue Generation Our ability to lend money at rates in _ Finance revenue as a percentage of average earning assets
excess of our cost of borrowing, earn rentals on the equip- (AEA);
ment we lease, and generate other income. We measure _ Net finance revenue as a percentage of AEA;
our performance in this area by: _ Operating lease revenue as a percentage of average operat-
ing lease equipment (AOL) and
_ Levels of net finance revenue and other income.
Liquidity and Market Rate Risk Management Our ability to _ Various interest sensitivity and liquidity measurements,
obtain funding at competitive rates, which depends on which we discuss in “Risk Management”.
maintaining high quality assets, strong capital ratios, and
high credit ratings, and our ability to manage our interest
rate and currency rate risk, where our goal is to substan-
tially insulate our interest margins and profits from
movements in market interest rates and foreign currency
exchange rates. We measure our liquidity and market rate
risk management by:
Item 7: Management’s Discussion and Analysis

03.30230-Part2.qxp 3/6/08 1:20 PM Page 18
KEY PERFORMANCE METRICS AND MEASUREMENTS

Credit Risk Management Our ability to evaluate the credit- _ Net charge-offs as a percentage of average finance
worthiness of our customers, both during the credit receivables;
granting process and after the advancement of funds, and _ Non-performing assets as a percentage of finance
to maintain high-quality assets while balancing income receivables;
potential with adequate credit loss reserve levels. We _ Delinquent assets as a percentage of finance receivables;
assess our credit risk management by: _ Reserve for credit losses as a percentage of finance receiv-
ables and non-performing assets; and
_ Concentration risk by geographic region, industry and cus-
tomer.
Equipment and Residual Risk Management Our ability to _ Gains and losses on equipment sales; and
evaluate collateral risk in leasing and lending transactions _ Equipment utilization and value of equipment off -lease.
and to remarket equipment at lease termination. We
measure these activities by:
Expense Management Our ability to maintain efficient oper- _ Efficiency ratio, which is the ratio of operating expenses to
ating platforms and infrastructure in order to run our total net revenue: and
business at competitive cost levels. We track our _ Operating expenses as a percentage of average managed
efficiency by: assets (“AMA”).
Capital Management Our ability to maintain a strong capital _ Tangible capital base;
base to support our debt credit ratings and asset growth. _ Tangible book value per common share; and
We measure our performance in this area by: _ Tangible capital as a percentage of managed assets.
PAGE 18
PROFITABILITY AND KEY BUSINESS TRENDS

This past year, particularly the second half of 2007, was chal- remained strong, though credit quality measurements did
lenging for CIT. We reconsidered our home lending business weaken from very strong prior year levels.
strategy due to the market conditions in the U.S. residential
The loss per share for 2007 was $0.58 compared with diluted
mortgage market, particularly with respect to sub-prime mort-
income per share in 2006 and 2005 of $5.00 and $4.44, respec-
gage lending and as a result, recorded significant valuation
tively. The net loss attributable to common shareholders was
adjustments and credit loss provisioning related to this busi-
$111.0 million for 2007, versus net income of $1,015.8 million
ness in 2007. In addition, heightened volatility in the capital
and $936.4 million for 2006 and 2005. Among the items driving
markets in the second half of 2007 resulted in a widening of
these comparisons were the following:
corporate borrowing spreads and restricted our access to tradi-
tional unsecured long-term funding sources at competitive _ An after tax loss of $989.2 million in the Home Lending seg-
rates. Given these market conditions, we funded our business ment, primarily due to $1,248.9 million (pretax) in valuation
principally in the asset-backed markets during the second half allowance charges to adjust assets held for sale to estimated
of the year. We continued to access the commercial paper mar- fair value and a $250 million fourth quarter provision for
kets, but at reduced levels and higher costs. We also recorded a credit losses following the transfer of the majority of the port-
non-cash goodwill and intangible asset impairment charge in folio back to held for investment late in the third quarter;
our student lending business, as declining peer valuations and _ A $302.5 million after tax goodwill and intangible asset
higher funding costs for this asset class led us to conclude in impairment charge related to the Company’s student lend-
the fourth quarter that the fair value of this business did not ing business, reflecting decreased market valuations for
support the goodwill and intangible asset carrying values. student lending businesses and lower profit expectations
The losses in our home lending and consumer segments over- as a result of higher funding costs;
shadowed solid results in our commercial businesses. Owned
_ A pretax gain of $247.1 million on the sale of CIT’s 30% inter-
financing and leasing assets in our four commercial segments est in its Dell Financial Services (DFS) joint venture within
grew 14% from December 31, 2006, as we deployed capital Other Income; and
strategically to provide liquidity to customers with whom we
_ A combined pretax gain of $261.1 million on the above-men-
have long and strong relationships. We executed two signifi- tioned sales of construction and systems leasing assets
cant acquisitions (approximately $4 billion in assets) in the within Other Income.
first half of the year in our Vendor Finance segment and we Looking ahead to 2008, we will continue to focus on capital dis-
sold just over $3 billion in construction (Corporate Finance cipline, proactive portfolio management, balance sheet
segment) and systems leasing (Vendor Finance segment) strength and maximizing the value of the liquidating home
portfolios in the second half of 2007. Commercial credit quality lending portfolio. We are concentrating on maintaining liquidity
03.30230-Part2.qxp 3/6/08 1:20 PM Page 19
and will deploy resources to our most profitable commercial The valuation adjustment at June 30, 2007, was based on an
franchises. We expect to continue to fund the business prima- assessment of the estimated fair value of the mortgage port-
rily with secured / asset-backed financings and to grow assets folio, as opposed to the overall business including origination
modestly, particularly in the first half of 2008. As a result, we and servicing platforms.
expect 2008 earnings to reflect the following:
Third Quarter 2007
_ Lower net finance revenue, with spread compression due We closed the home lending origination platform and ceased
to higher borrowing costs and reduced revenue from the accepting new loan applications in August 2007, and recorded
Dell vendor relationship; a pre-tax charge of $39.6 million for severance ($25.0 million)
_ Softness in other income, due to low asset sale and syndi- and other exit costs ($14.6 million). The closing of the origina-
cation gains; tion platform reduced annual operating expenses by
_ An increase in credit costs from very favorable levels due to approximately $50 million. As explained below, we obtained
a softening economic environment; and funding using a significant portion of the home lending assets
_ Positive operating expense trends due to lower headcount as collateral in secured financing transactions at the end of
and other cost savings initiatives. the quarter.
HOME LENDING BUSINESS – SIGNIFICANT 2007 EVENTS Given continued adverse conditions in the U.S. housing mar-
AND ACTIONS ket, the residential mortgage market, and the global capital
The Company entered the home lending business in 1992 in markets, and our expectation that these conditions could per-
order to develop diversification relative to our commercial sist for an extended period, management determined after
finance businesses in an asset class with liquidity, predictable extensive analysis of market conditions, portfolio conditions
revenue streams and growth opportunities. In the first half of and trends that an orderly run-off of a substantial portion of
2007, deteriorating credit performance in the residential mort- the Company’s home lending receivables portfolio, rather than
gage markets, coupled with reduced liquidity in the secondary a sale under market conditions expected for the foreseeable
market for this asset class, resulted in a decline in portfolio and future, would produce a better economic outcome for the
origination economics. In light of these negative developments, Company’s shareholders. Accordingly, $9.7 billion in remain-
other negative trends in the housing market and management’s ing unpaid principal balance (UPB) of the $11.1 billion UPB of
PAGE 19
belief that the residential mortgage business would be weak for home lending receivables (excluding repossessed assets)
an extended period, we announced our intent to exit this busi- were transferred at the lower of cost or market from assets
ness in July of 2007. Working with an external advisor, we held for sale to assets held for investment as of September 30,
considered an outright sale of: (i) the business as a going con- 2007. A third quarter valuation charge of $465.5 million pretax
cern, including the origination and servicing platforms; (ii) the was recorded to reduce the portfolio to lower of cost or market
entire portfolio of receivables or (iii) various parts of the portfolio. value, on a loan by loan basis, prior to transfer to held for
Second Quarter 2007 investment. The accumulated valuation allowance as of
September 30, 2007 reflected a discount of approximately
Given our intent to exit the business and potentially sell all or
9.7% to the $11.1 billion of UPB, excluding repossessed
part of the portfolio, management determined that the home
assets. The portion of the accumulated valuation allowance
lending receivables portfolio no longer qualified as assets held
related to loans transferred from held for sale to held for
for investment under generally accepted accounting principles
investment at September 30 is accounted for as a discount for
(GAAP) at June 30, 2007. Accordingly, the portfolio was trans-
periods after September 30, 2007.
ferred to assets held for sale and reduced to the lower of cost or
market as required by GAAP, resulting in a second quarter pre- In determining estimated fair value at September 30, 2007,
tax charge of $765.3 million. The valuation allowance as of June management stratified the home lending portfolio into nine
30, 2007 reflected a discount of approximately 6.3% to the pools of loans with common characteristics that we believed
$11.3 billion of unpaid principal balance (UPB), excluding repos- to be consistent with how a market participant would evaluate
sessed assets, based on management’s estimate of fair value. the value of the portfolio.
The valuation allowance for the mortgage portfolio as of June _ Six pools, comprising $7.5 billion of the $9.7 billion were
30, 2007 was based on (i) pricing indicators for multiple pools transferred to held for investment at September 30, 2007.
of our home lending portfolio that we obtained from a major For three of these pools, estimated fair values were based
market participant on two separate occasions in mid-June and upon observable sales of portfolios of similar assets by two
early July 2007 and (ii) an offer from a private equity investor to financial institutions in September 2007. These three pools
purchase a portion of the portfolio comprised of a representa- were primarily comprised of first lien conforming and non-
tive cross section of the entire portfolio. Both the pricing conforming fixed and floating rate mortgage loans. These
indicators from the major market participant and the bid from two market transactions were the only relevant transac-
the private equity investor were within comparable value tions that we were able to identify. Based on our experience
ranges. There were few observable portfolio sale transactions in the market, we identified 12 relevant loan characteristics
in the weeks preceding June 30, 2007. Those transactions that that we believed were typically used by market participants
were completed were at levels in excess of par value and were to compare and adjust prices between comparable mort-
dismissed as not being relevant estimates of fair value as at gage portfolios. These characteristics included, but were
June 30, 2007 due to the changed market conditions. not limited to weighted average coupon, loan-to-value

ratio, FICO score, lien position (second vs. first), percent- See Critical Accounting Estimates for additional discussion of the
age of portfolio comprised of adjustable rate mortgages fair value determination and the related sensitivities for changes
and proportion of full documentation loans. We used pric- in assumptions underlying discounted cash flow modeling.
ing sheets to calculate adjustments to observable sale
Consistent with management’s determination to hold certain
prices of the two portfolios of similar assets sold by other
assets for the foreseeable future, in the third quarter, we seg-
financial institutions (purchase price adjustments) based
regated $7.2 billion UPB of the $9.7 billion portfolio in a
on similarities and differences between the 12 component
bankruptcy-remote vehicle and issued $5.2 billion of securi-
characteristics of the CIT portfolios and each of the portfo-
ties as on-balance sheet, non-recourse secured financings.
lios sold by the two financial institutions. We had previously
These financing transactions, which management viewed as
used similar pricing sheets in our own actual market
an attractive alternative to sales in the then current market,
transactions. These pools are labeled pools 1, 2, and 5 in
encumbered the assets for their remaining lives, as the terms
the tabular summary of held for investment balances at
of the securitizations do not permit the Company to withdraw
December 31, 2007 that follows.
assets from the securitization vehicles or to substitute compa-
_ Despite extensive research, including consulting with sev-
rable assets. The $7.2 billion of loans collateralizing the
eral major market participants, we were unable to obtain
securitizations were predominantly first liens, less seasoned
observable relevant market transactions during the third
than other loans in our portfolio and at the high end of our
quarter of 2007 for the other three pools of assets trans-
average portfolio FICO score range. The majority of the
ferred to held for investment, comprising $2.2 billion at
remaining $2.5 billion portfolio transferred to held for invest-
September 30, 2007. These pools include home equity lines
ment at September 30, 2007 was comprised of re-performing
of credit (HELOC), re-performing first lien mortgage loans
first liens, which had either been delinquent or modified at
and second lien loans. Based on our judgment regarding
some point in the account history, and home equity lines of
market practices, we developed estimates of fair value uti-
credit. Management has both the ability and intent to hold over
lizing discounted cash flow analyses for each of the pools
their remaining lives the entire $9.7 billion of home lending
by applying assumptions that we believe market partici-
assets transferred to held for investment and to liquidate
pants would have utilized. We assumed a weighted average
them in accordance with their contractual terms. The
lifetime loss assumption of approximately 16% (with an
Company has ceased its sales analysis and activities with
PAGE 20
underlying range among the pools of 11% to 30%) and a

respect to these assets.
weighted average discount rate of approximately 13.5%
(with an underlying range among the pools of 12.75% to The securities in the on-balance sheet financing (securitiza-
15%). These pools are labeled pools 3, 4 and 6 in the tabu- tion) transactions described above were structured into
lar summary of held for investment balances at December separate credit tranches and rated AAA through BBB-. The
31, 2007 that follows. $5.2 billion private placement of securities sold to investors
_ For the three pools (two pools of manufactured housing was comprised entirely of the AAA components of the struc-
loans and the pool of non-performing and delinquent loans ture. While we are not currently offering the remaining
sold in the fourth quarter) comprising the portfolio classi- securities for sale, we could sell the lower-rated securities
fied as held for sale at September 30, 2007 (UPB of (AA+ to BBB-) if conditions were to become economically
approximately $1.4 billion), we based the valuation upon attractive. There are no conditions that need to be satisfied in
multiple third party bids that resulted from our marketing order for us to execute such sales.
efforts with respect to these portfolios. These bid terms
The following table summarizes the UPB of the Home Lending
and conditions did not include provisions for credit
portfolio by pool of loans at September 30 and December 31,
recourse or seller financing.
2007 ($ in millions).
Pool
________ September ___________________
____________________ December ___________________________________________________________________________________
Fair Value Methodology — September Valuation
1 Securitization pool - conforming loans $6,154 $6,061 (3) Observable market transactions
2 Securitization pool - non-conforming 1,088 915 (3) Observable market transactions

3 Re-performing first liens(1) 1,272 1,226 Discounted cash flow model
4 HELOCS(2) 532 478 Discounted cash flow model
5 Other securitization eligible loans 256 210 Observable market transactions
6 Second liens, other 386
__________________ 281
__________________ Discounted cash flow model
Total held for investment portfolio $9,688
__________________ $9,171
__________________
__________________ __________________
(1) Re-performing first liens were either delinquent or modified at some point in the account history.
(2) Home equity lines of credit.
(3) At December 31, 2007, CIT retains $2.3 billion securities backed by loans in Pool 1 and 2, of which $1.6 billion are investment grade. Balances
include loans pledged as collateral on the $4.8 billion AAA-rated non-recourse debt outstanding.
Fourth Quarter 2007 mated fair value as of December 31, 2007, bringing the cumu-
In October, management sold approximately $870 million UPB lative valuation allowance charge to $1,248.9 million for the
of non-performing and delinquent loans (classified in assets year ended December 31, 2007.
held for sale at September 30, 2007) at a price approximately In addition to the valuation allowance charges described
$20 million below the September 30, 2007 carrying value, and above, we recorded a $250.0 million provision for credit losses
recognized a fourth quarter loss on sale. during the quarter ended December 31, 2007 related to the
The bids for the remaining assets held for sale that we utilized mortgage loans held for investment. The fourth quarter provi-
in the third quarter valuation did not materialize due to the sion related primarily to the loans securitized in the third
prospective buyers’ inability to obtain financing. Therefore, we quarter. These loans were comprised predominantly of first
are continuing to market the $488 million UPB of manufac- liens, were less seasoned and at the higher end of the average
tured housing assets remaining in assets held for sale at FICO score range, and as a result, had the lowest percentage
December 31, 2007. The estimated fair value for these two of discount to UPB of the six pools. Adverse credit trends in
pools was determined using discounted cash flow analyses, as this portfolio during the quarter, reflecting portfolio seasoning,
we did not consider the third quarter bids to be relevant esti- coupled with severity of loss assumptions arising principally
mated fair value data points at December 31, 2007. Cash from further deterioration in the home lending market during
flows, determined based on projections of lifetime losses, the quarter, were the primary drivers of the provision charge.
were discounted at rates that we believed reflected the poten- The following table summarizes the balances for, and activity
tial volatility in the projected cash flows that would have been in various components of, home lending loans held for sale,
considered by market participants. As a result, an additional held for investment, and repossessed assets from June 30,
valuation allowance of $18 million, or 3.7% of UPB, was 2007 (date of classification as held for sale) through
recorded in the fourth quarter to reduce carrying value to esti- December 31, 2007.
($ in millions) _____Held for Investment

__________________________________ Held for Sale
________________________________________ Repossessed Assets
____________________________________
UPB
_______________ Discount
_______________ UPB
_________________ Val allow
________________ UPB(1) Val
______________ allow(1)
__________________
PAGE 21
Balance at June 30, 2007 $ – $ – $11,289.3 $(707.7) $239.6 $(114.7)
Transfer to repossessed assets – – (103.2) 23.5 103.2 (23.5)
Charge-offs (UPB basis) – – (55.5) 55.5 – –
Asset sale / other – – (40.7) 22.7 – –
Third quarter valuation charge – – (465.5) – –
Liquidations – net – – (45.8) – – –
Transfer to held for investment 9,687.5
_______________ (601.0)
_______________ (9,687.5)
_________________ 601.0
________________ –
_____________ –
__________________
Balance at September 30, 2007 9,687.5
_______________ (601.0)
_______________ 1,356.6
_________________ (470.5)
________________ 342.8 __________________
_____________ (138.2)
Transfer to repossessed assets (40.0) 23.0 (2.0) 1.0 42.0 (24.0)
Charge-offs (UPB basis) (115.0) 109.0 – – – –
Asset sale – – (867.0) 342.0 – –
Fourth quarter valuation charge – – – (18.0) – –
Accretion – 6.0 – – – –
Liquidations / other (362.0)
_______________ 10.0
_______________ –
_________________ –
________________ (40.0) __________________
_____________ 24.0
Balance at December 31, 2007 $9,170.5
_______________
_______________ $(453.0)
_______________
_______________ $ 487.6
_________________
_________________ $(145.5)
________________
________________ $344.8 __________________
_____________
_____________ $(138.2)
__________________
(1) Respective amounts at repossession date and transferred to other assets.
Accounting Conventions at December 31, 2007 as loan discount, a reduction of the carrying value of the
The accounting for loans transferred to held for investment corresponding loans.
from assets held for sale has a number of key revenue recogni-
_ The valuation allowance for each pool at the transfer date
tion aspects that will impact prospective reported results for the was allocated on a loan-by-loan basis to loans within each
home lending portfolio. Key elements of this accounting follow. pool, based upon an assessment of underlying loan char-
acteristics, including, but not limited to, interest rate reset
_ As described above, the loans transferred to held for characteristics (fixed versus variable rate), lien position,
investment from held for sale were valued at the lower of and estimated inherent loss.
cost or market (LOCOM) at the September 30, 2007 trans- _ Subsequent to transfer, the discount on performing loans
fer date. is being accreted into earnings as an increase to finance
_ While in held for investment, the loans will not be subject revenue over the contractual life of the assets using the
to LOCOM accounting. interest (level yield) method.
_ Under held for investment accounting, the difference
between the carrying value at LOCOM and UPB is reflected

03.30230-Part2.qxp 3/6/08 1:20 PM Page 22
_ Consistent with our historic accounting policies, discount performance and other relevant credit factors. The allowance
accretion and income accrual is suspended on non-perform- for credit losses will also be impacted by losses that exceed
ing accounts when they become 90 days or more delinquent. the unamortized discount on such loans. Future earnings
_ Any unamortized discount is recognized in the period of trends will continue to reflect changes in the credit dynamics
prepayment. of the portfolio, including trends in default rates, price trends
_ An allowance for credit losses is evaluated on a loan pool in the residential home market, our success in restructuring
basis and is recognized to the extent estimated inherent certain loans and the effectiveness of our collection opera-
losses exceed corresponding remaining unamortized dis- tions. We currently expect that home lending credit losses will
count at any balance sheet date, in accordance with FAS 5 peak during 2008, and that quarterly credit loss provisions will
and SAB 102. be required in 2008, though at reduced levels from the fourth
_ Charge-offs are recognized to the extent net individual loan quarter 2007 amount.
carrying value, including any remaining unaccreted discount,
The home lending assets were previously funded with unse-
exceeds the corresponding expected future cash flows for that
cured long-term debt. As a result of the recent on-balance
loan, and are recorded no later than 180 days past due.
sheet secured financing transactions, which provided
As a result of the accounting requirements described above, $5.2 billion in funds, we were able to source additional liquid-
finance revenue is expected to reflect a slightly increased yield ity using the home lending assets as collateral. In addition,
due to discount accretion, while the allowance for credit losses principal collections relating to loans not securitized in the
will reflect ongoing estimates of inherent losses in the portfo- above-mentioned secured financing transactions will provide
lio, based on then existing portfolio characteristics, loan a source of future liquidity.
PAGE 22
03.30230-Part2.qxp 3/6/08 1:20 PM Page 23
The following table presents selected portfolio information as of December 31, 2007.
Managed Home Lending Portfolio Statistics ($ in millions)
December 31, 2007
_________________________________
Held for Investment Portfolio
Owned assets (UPB, including assets collateralizing 2007 third quarter secured financings) $9,171
Managed assets (UPB including $523 million in securitized home mortgage assets) $9,694
Portfolio Statistics (based on managed asset data)
Product Distribution
First liens 88%
Fixed-rate mortgage 42%
ARM
2/28 & 3/27 (Two and three year fixed rate conversion) 53%
HELOC/other 5%
Interest only 10%
Negative amortization 0%
Weighted average seasoning (months) 24
Vintage
2003 and prior 10%
2004 5%
2005 20%
2006 32%
2007 33%
Underwriter Demographics (data as of origination date weighted by end of period managed assets)
Average length of residence (years) 6
PAGE 23
Average length of employment (years) 8
% debt to income 41%
% full documentation(1) 60%
Average loan size ($ in thousands) $129.7
Average FICO score (638)
700 & up 13%
660-699 18%
600-659 42%
540-599 22%
Less than 540 5%
Average loan-to-value (82%)
90.01% to 100% 18%
80.01% to 90% 28%
70.01% to 80% 42%
Less than 70% 12%
Geographic Information – Top States UPB % Past Due 60 days or more
California $1,797 15.31%
Florida 839 16.51%
New York 717 8.87%
Texas 683 5.68%
Illinois 523 12.70%
(1) Excludes loans that were granted based on income and other credit parameters that were subject to low documentation or no documentation.
The above table includes portfolio statistics for the home $488 million (UPB) of manufactured housing assets held for
mortgage held for investment portfolio and home mortgage sale and $187 million (managed UPB) of sales financing
assets previously securitized, but excludes approximately assets included in the Home Lending segment.

03.30230-Part2.qxp 3/6/08 1:20 PM Page 24
REVENUE
Revenue (dollars in millions) in 2007, up from 41% in 2006 and 2005, as the gains on the
The trend in our total net revenues in the three-year period sales of our DFS joint venture interest, combined with the con-
from 2005-2007 reflects both asset growth and our focus on struction and systems leasing portfolio sale gains, drove the
other income generation. Net finance revenue has increased 2007 increase. Absent these sale gains, the 2007 ratio was
over this period, however, rising interest rates have reduced 35%, reflecting reduced syndication and receivable sale activ-
our margins. Other income accounted for 44% of net revenue ity, particularly in the second half of 2007.
NET FINANCE REVENUE

Net Finance Revenue for the years ended December 31 (dollars in millions)
2007
________________ 2006
________________ 2005
________________
Finance income - loans and capital leases $ 5,031.6 $ 3,973.3 $ 3,018.7
Rental income on operating leases 1,993.3
________________ 1,720.6
________________ 1,496.5
________________
Finance revenue 7,024.9 5,693.9 4,515.2
Less:
Interest expense 3,832.3 2,867.8 1,912.0
Depreciation on operating lease equipment 1,172.3
________________ 1,023.5
________________ 968.0
________________
Net finance revenue $ 2,020.3
________________ $ 1,802.6
________________ $ 1,635.2
________________
________________ ________________ ________________
Average Earnings Asset (“AEA”) $71,101.1
________________
________________ $58,003.3
________________
________________ $48,128.2
________________
________________
PAGE 24
As a % of AEA:
Finance income - loans and capital leases 7.08% 6.85% 6.27%
Rental income on operating leases 2.80%
________________ 2.96%
________________ 3.11%
________________
Finance revenue 9.88% 9.81% 9.38%
Less:
Interest expense 5.39% 4.94% 3.97%
Depreciation on operating lease equipment 1.65%

________________ 1.76%
________________ 2.01%
________________
Net finance revenue 2.84%
________________
________________ 3.11%
________________
________________ 3.40%
________________
________________
As a % of AEA by segment:
Corporate Finance 3.12% 3.19% 3.17%
Transportation Finance 2.81% 2.60% 2.30%
Trade Finance 5.79% 6.01% 5.47%
Vendor Finance 4.70% 5.68% 5.64%
Commercial Segments 3.59% 3.76% 3.74%
Home Lending 1.97% 2.11% 2.40%
Consumer 1.18% 1.51% 1.65%
Consolidated Net finance revenue 2.84% 3.11% 3.40%
As a % of AOL:
Rental income on operating leases 16.92% 16.45% 17.03%
Depreciation on operating lease equipment 9.95%
________________ 9.79%
________________ 11.02%
________________
Net operating lease revenue 6.97%
________________ 6.66%
________________ 6.01%
________________
________________ ________________ ________________
Average Operating Lease Equipment (“AOL”) $11,784.0
________________ $10,458.8
________________ $ 8,788.5
________________
________________ ________________ ________________
Net finance revenue increased 12% and 10% from the prior years outpaced revenue increases. From a segment perspec-
year in 2007 and 2006, due to corresponding increases of 23% tive, Net finance revenue percentages were relatively stable
and 21% in average earning assets. Net finance revenue, as a over the three-year period in the commercial businesses,
percentage of average earning assets, declined from the prior except for the Vendor Finance margin, which reflected the
year in both 2007 and 2006, as increased funding costs in both impact of 2007 acquisitions.
The year over year variances in the net finance revenue per- Management, during the second half of 2007, commercial paper
centages are summarized in the table below: balances were significantly lower, as we relied more heavily
on secured financing sources and issued a number of higher-
Years ended December 31
cost funding instruments. We expect this downward pressure on
2007
_________ 2006
_________
net finance income as a percentage of AEA to continue into 2008,
Net finance revenue - prior year 3.11% 3.40% as the full impact of the capital markets disruption and the
Treasury gap (including asset / liability higher-cost funding sources is reflected in our margins.
mix, changes in liquidity position) (0.13%) (0.08%)
The increase from the prior year in net operating lease revenue
Yield-related fees (0.09%) (0.06%)
as a percentage of average operating lease assets reflected the
Asset mix changes, including continuation of strong rental rates in aerospace. All of our
student lending (0.03%) (0.10%) commercial aircraft are under contract at December 31, 2007.
Other factors (0.02%)
________ (0.05%)
________ All of our 2008 order book, and all but one aircraft in our 2009
Net finance revenue - current year 2.84% 3.11% delivery order book have been placed. Rail rates remain stable,
________
________ ________
________ though utilization has softened modestly for cars used for resi-
The increased treasury gap drag on net finance revenue reflects dential construction, consistent with the slowing housing
the disrupted capital market conditions in the second half of 2007 market in 2007. See “Concentrations – Operating Leases” for
and our decision to maintain excess cash balances and liquidity. additional information regarding operating lease assets.
As described in Capitalization and the Liquidity section of Risk
CREDIT METRICS
Overall, commercial credit metrics remained strong in 2007, increased $7 million, but were down 2 basis points as a percent-
although weakened from very favorable prior period levels. age of average finance receivables.
Excluding home lending and consumer, net charges-offs
PAGE 25
Past Due Loans (60 days or more) as of December 31 (dollars in millions, % as a percentage of finance receivables)
2007
_________________________________ 2006
_________________________________ 2005
_________________________________
Owned Past Dues:
Corporate Finance $ 194.8 0.91% $ 152.6 0.76% $131.8 0.89%
Transportation Finance 9.8 0.39% 15.3 0.72% 17.0 0.90%
Trade Finance 71.1 0.97% 101.8 1.46% 39.3 0.59%
______________ 3.24% 174.2
______________ 2.53% 213.9
___________ 3.04%
Commercial Segments 611.7 1.47% 443.9 1.23% 402.0 1.32%
Home Lending 962.1 9.91% 470.1 4.77% 220.7 2.62%
Consumer 600.8
______________ 4.93% 407.9
______________ 4.52% 135.5
___________ 2.53%
Total $2,174.6
______________ 3.43% $1,321.9
______________ 2.40% $758.2
___________ 1.71%
______________ ______________ ___________
Managed Past Dues:
Corporate Finance $ 201.8 0.86% $ 162.1 0.72% $150.5 0.85%
Trade Finance 71.1 0.97% 101.8 1.46% 39.3 0.59%
______________ 3.49% 301.9
______________ 2.68% 302.9
___________ 2.65%
Home Lending 1,031.3 9.92% 538.8 4.92% 320.2 3.31%
Consumer 600.8
______________ 4.88% 407.9
______________ 4.36% 135.5
___________ 2.42%
Total $2,435.5
______________ 3.42% $1,527.8
______________ 2.42% $965.4
___________ 1.81%
______________ ______________ ___________

03.30230-Part2.qxp 3/6/08 1:20 PM Page 26
Corporate Finance delinquency metrics trended up during the $399.0 million (4.88%) at December 31, 2007 and 2006. Higher
year primarily due to delinquency increases in the small busi- delinquency in this component of our student loan portfolio is
ness lending unit. not indicative of potential loss due to the underlying U.S. gov-
ernment guarantee on the majority of the loan balance.
Transportation Finance delinquencies continued a downward
Delinquencies on non-government guaranteed private loans
trend reflecting strength in the aerospace and rail industries.
totaled $12.7 million (2.03%) and $1.1 million (0.35%) at
Trade Finance delinquency declined from the high 2006 level, December 31, 2007 and 2006. Approximately $445 million
which include a few high dollar accounts. (75%) of the private loan portfolio is not yet in repayment sta-
tus, which begins upon graduation, or when students no
The Vendor Finance increase in delinquency in 2007 was
longer attend the school. As more loans enter repayment sta-
driven primarily by higher delinquencies in U.S. operations
tus, it is possible that we will experience increasing
including the impact of the integration and consolidation of
delinquencies in this portfolio.
leasing platforms in connection with an acquisition. The
decrease in 2006 reflected lower delinquency levels in the Home Lending metrics are based on a percentage of unpaid
international portfolios. principal balance. Home Lending delinquencies rose sharply,
reflecting the effects of softer real estate and mortgage mar-
Consumer delinquency increased in 2007 driven by Student
ket conditions. See Profitability and Key Business Trends for
Lending. Delinquencies on student loans for which there is a
additional information on Home Lending.
97% government guarantee totaled $569.1 million (5.23%) and
Non-performing Assets as of December 31 (dollars in millions, % as a percentage of finance receivables)

2007
_________________________________ 2006
______________________________ 2005
_________________________________
Non-performing assets:
Corporate Finance $ 242.2 1.14% $196.7 0.97% $208.5 1.40%
PAGE 26
Trade Finance 41.6 0.57% 60.4 0.87% 5.3 0.08%

______________ 1.84% 51.4
___________ 0.75% 71.1
___________ 1.01%
Home Lending 892.3 9.19% 451.1 4.57% 213.0 2.53%
Consumer 8.5
______________ 0.07% 3.0
___________ 0.03% 1.0
___________ 0.02%
Total $1,378.5
______________ 2.17% $770.5
___________ 1.40% $521.2
___________ 1.18%
______________ ___________ ___________
Non accrual loans $1,162.7 1.83% $662.0 1.20% $460.7 1.04%
Repossessed assets 215.8
______________ 0.34% 108.5
___________ 0.20% 60.5
___________ 0.14%
Total non-performing assets $1,378.5
______________ 2.17% $770.5
___________ 1.40% $521.2
___________ 1.18%
______________ ___________ ___________
The non-performing asset trends follow those of the delin- tractually not past due. Repossessed assets, which are carried
quencies. Non-performing balances, such as in Corporate at the lower of book value or estimated fair value, increased
Finance, may exceed the delinquency balance as loans primarily related to Home Lending.
deemed impaired will stop accruing income even though con-
03.30230-Part2.qxp 3/6/08 1:20 PM Page 27
RESERVE AND PROVISION FOR CREDIT LOSSES

Reserve and Provision for Credit Losses for the years ended December 31 (dollars in millions)
2007
____________ 2006
____________ 2005
____________
Balance beginning of period $659.3
____________ $621.7
____________ $617.2
____________
Provision for credit losses – finance receivables (by segment)
Corporate Finance 68.9 48.8 49.4
Transportation Finance (32.0) 2.2 4.5
Trade Finance 33.4 38.0 25.2
Vendor Finance 52.1 45.4 47.2
Home Lending 352.1 62.4 51.7
Consumer 55.4 16.1 9.8
Corporate and Other, including specific reserving actions 63.9
____________ 9.3
____________ 29.2
____________
Total provision for credit losses 593.8 222.2 217.0
Reserves applied to receivables transferred to held for sale (227.8) – –
Reserves relating to acquisitions, other 69.2
____________ 40.4
____________ 38.6
____________
Additions to reserve for credit losses, net 435.2
____________ 262.6
____________ 255.6
____________
Net charge-offs (recoveries)
Corporate Finance 69.6 37.6 48.7
Transportation Finance (32.3) 1.4 53.5
Trade Finance 31.6 37.4 22.9
PAGE 27
Vendor Finance 58.0 43.1 49.0
Home Lending 83.0 91.7 67.9
Consumer 53.1
____________ 13.8
____________ 9.1
____________
Total net charge-offs 263.0
____________ 225.0
____________ 251.1
____________
Balance end of period $831.5
____________
____________ $659.3
____________
____________ $621.7
____________
____________
Reserve for credit losses as a percentage of finance receivables 1.33% 1.20% 1.40%
Reserve for credit losses excluding specific reserves, as a percentage
of finance receivables, excluding guaranteed student loans and home lending 1.22% 1.19% 1.24%
Reserve for credit losses as a percentage of non-performing assets,
excluding guaranteed student loans and home lending 121.1% 154.3% 158.5%
We present the metrics both including and excluding guaran- upon economic risks, industry and geographic concentrations
teed student loans as these are currently covered by U.S. and other factors. Specific reserves related to impaired loans
government guarantees for approximately 97% of the balance, totaled $52.1 million, $53.4 million and $76.5 million at
and the Home Lending due to the valuation allowance and December 31, 2007, 2006 and 2005. The specific reserves pri-
current status as a liquidating portfolio. marily relate to SFAS 114 impaired accounts within our
The reserve for credit losses increased in amount in both 2007 Corporate Finance and Trade Finance businesses. The reserve
and 2006 primarily reflecting higher inherent losses among for credit losses at December 31, 2007, 2006 and 2005
Home Lending receivables and general portfolio growth. The includes approximately $250 million, $168 million, and $137
reserve percentage excluding guaranteed student loans, million for home lending and manufactured housing.
Home Lending and specific reserves related to impaired loans The consolidated reserve for credit losses is intended to provide
is up slightly from last year, reflecting some weakening trends for losses inherent in the portfolio. We estimate the ultimate out-
in credit metrics in the form of higher net charge-offs and come of collection efforts and realization of collateral values,
higher delinquency and non-performing asset levels. among other things. We may make additions or reductions to the
The reserve for credit losses includes three key components: consolidated reserve for credit losses depending on changes in
(1) specific reserves for loans that are impaired under SFAS economic conditions or credit metrics, including past due and
114, (2) reserves for estimated losses inherent in the portfolio non-performing accounts, or other events affecting specific
based upon historical and projected charge-offs, and (3) obligors or industries. We continue to believe that the credit risk
reserves for inherent estimated losses in the portfolio based characteristics of the portfolio are well diversified by geography,

03.30230-Part2.qxp 3/6/08 1:20 PM Page 28
industry, borrower, and collateral type. The portion of the reserve Based on currently available information and our portfolio
related to inherent estimated loss and estimation risk reflects assessment, we believe that our total reserve for credit losses
our evaluation of trends in our key credit metrics, as well as our is adequate.
assessment of risk in specific industry sectors.
Net Charge-offs (charge-offs net of recoveries) for the years ended December 31
(dollars in millions, % as a percentage of average finance receivables for Owned and average managed finance receivables for Managed)
2007
______________________________ 2006
______________________________ 2005
_________________________________
Owned
Corporate Finance $ 69.6 0.34% $ 37.6 0.22% $ 48.6 0.35%
Transportation Finance (32.3) (1.39%) 1.4 0.08% 53.5 2.34%
Trade Finance 31.6 0.44% 37.4 0.55% 22.9 0.34%
Vendor Finance 58.0
___________ 0.57% 43.1
___________ 0.60% 49.0
___________ 0.66%
Home Lending 83.0 1.06% 91.7 0.98% 67.9 1.07%
Consumer 53.1
___________ 0.49% 13.8
___________ 0.19% 9.1
___________ 0.22%
Total $263.0
___________ 0.45% $225.0
___________ 0.45% $251.0
___________ 0.60%
___________ ___________ ___________
Managed
Corporate Finance $ 78.5 0.36% $ 47.9 0.25% $ 66.1 0.40%
Transportation Finance (32.3) (1.39%) 1.4 0.08% 53.5 2.34%
Trade Finance 31.6 0.44% 37.4 0.55% 22.9 0.34%
PAGE 28
Vendor Finance 80.5

___________ 0.57% 57.3
___________ 0.53% 63.7
___________ 0.59%
Home Lending 110.2 1.29% 128.6 1.24% 119.2 1.55%
Consumer 53.1
___________ 0.49% 13.8
___________ 0.19% 9.1
___________ 0.22%
Total $321.6
___________ 0.50% $286.4
___________ 0.50% $334.5
___________ 0.68%
___________ ___________ ___________
Corporate Finance net charge-offs were up in 2007 due to instead taken against the valuation allowances. See
higher charge-offs on equipment leasing and lower levels of “Profitability and Key Business Trends” for more detail relating
recoveries. to Home Lending.
Transportation Finance benefited from an improving aero- Charge-offs in Consumer increased due to higher losses on
space industry in 2007 and 2006, as reflected by large unsecured consumer loans held in the Utah bank.
recoveries in 2007 and few charge-offs during 2006.
Net charge-offs on securitized assets were stable during
Net charge-offs in Trade Finance decreased to more normal- 2007. As a percentage of average securitized assets, securi-
ized levels during 2007 after a run-up in 2006. tized portfolio net charge-offs were 0.97%, 0.93% and 1.38% in
2007, 2006 and 2005.
Although up in amount from 2006, net charge-offs in Vendor
Finance as a percentage of average finance receivables We currently expect the following: (1) commercial net charge-
improved from the prior periods in both 2007 and 2006. The offs to increase in 2008 from the low 2007 levels, driven in part
increase in amount during 2007 reflected higher international by lower recoveries; (2) higher losses from all types of con-
charge-offs. sumer receivables, including private student loans, unsecured
loans and Home Lending; (3) Home Lending losses to continue
Home Lending charge-offs were down in 2007 from 2006 as
at high levels, and quarterly provisioning may be required, but
the balance above does not reflect charge-offs that were
not at the 2007 fourth quarter level.
recorded during the period the portfolio was held for sale
during the third quarter. Charge-offs during this period were
03.30230-Part2.qxp 3/6/08 1:20 PM Page 29
NET FINANCE REVENUE, AFTER PROVISION FOR CREDIT LOSSES

Net Finance Revenue after Provision for Credit Losses for the years ended December 31 (dollars in millions)
2007
________________ 2006
________________ 2005
________________
Net finance revenue after depreciation on operating lease equipment $ 2,020.3 $ 1,802.6 $ 1,635.2
Provision for credit losses 593.8
________________ 222.2
________________ 217.0
________________
Finance revenue, net of interest expense, depreciation, and credit provision $ 1,426.5
________________ $ 1,580.4
________________ $ 1,418.2
________________
________________ ________________ ________________
As a % of AEA:
Net finance revenue after depreciation on operating lease equipment 2.84% 3.11% 3.40%
Provision for credit losses 0.83%
________________ 0.38%
________________ 0.45%
________________
Finance revenue, net of interest expense, depreciation, and credit provision 2.01%
________________ 2.73%
________________ 2.95%
________________
________________ ________________ ________________
Average Earnings Asset (“AEA”) $71,101.1
________________ $58,003.3
________________ $48,128.2
________________
________________ ________________ ________________
The 2007 decline in finance revenue, net of the provision for lending provision charge and to a lesser extent, from com-
credit losses resulted primarily from increased charge-offs in pressed margins.
the Consumer segment and the fourth quarter 2007 home
NET FINANCE REVENUE, AFTER CREDIT PROVISION AND VALUATION ALLOWANCE

Total net revenue, after credit provision and valuation receivables (to reduce receivables held for sale to lower of cost
PAGE 29
allowances was $155.1 million in 2007, down from or market) drove the 2007 decline.
$1,565.4 million and $1,418.2 million in 2006 and 2005. The
See Profitability and Key Business Trends for additional information.
$1,248.9 million in valuation adjustments on home lending
OTHER INCOME
Other Income for the years ended December 31 (dollars in millions)
2007
______________ 2006
______________ 2005
______________
Fees and other income $ 527.2 $ 547.3 $ 489.6
Factoring commissions 226.6 233.4 235.7
Gains on receivable sales and syndication fees 180.7 298.3 163.3
Gains on sales of leasing equipment 117.1 122.8 91.9
Gains on securitizations 45.3
______________ 47.0
______________ 39.1
______________
Sub total 1,096.9 1,248.8 1,019.6
Gain on sale of Dell Financial Services joint venture 247.1 – –
Gains on portfolio and asset dispositions 236.1 – 181.3
Gain on derivatives –
______________ –
______________ 43.1
______________
Total other income $1,580.1
______________ $1,248.8
______________ $1,244.0
______________
______________ ______________ ______________
We continue to emphasize growth and diversification of other icing fees and accretion, advisory and agent fees, as well as
income to improve our overall profitability, though the disrup- income from joint venture operations. The decline from 2006
tion to the capital markets in the second half of 2007 resulted reflected increased securitization impairment charges, lower
in reduced loan sale gains and syndication fees. Total other joint venture earnings and reduced structuring fees, offset in
income was increased by strategic asset sales in both 2007 part by higher advisory fees. The 2006 amount also benefited
and 2005. from a $16.4 million commercial aircraft insurance recovery.
Fees and other income are comprised of asset management, Gains on receivable sales and syndication fees dropped 40%
agent and servicing fees, including securitization-related serv- from a very strong 2006, reflecting the challenging syndication

03.30230-Part2.qxp 3/6/08 1:20 PM Page 30
markets in the latter part of 2007. In addition to a 30% decline Gain on sale of Dell Financial Services joint venture of $247.1
in Corporate Finance, the consolidated sale and syndication million resulted from the 2007 sale of the Company’s 30%
income trend reflected a considerable reduction in home lend- ownership interest in DFS. The sale was the result of Dell
ing and student lending assets sales from prior periods. exercising their right to buy CIT’s interest. See Concentrations
for additional information.
Factoring commissions were down 3% and 1% in 2007 and 2006 as
an increase in volume was more than offset by lower commission Gain on portfolio dispositions resulted from the 2007 sales of
rates, reflecting favorable lending environment to customers. the U.S. Construction business at a gain of $240.1 and the sale
of our U.S. Systems Leasing portfolio at a gain of $21.0, offset
Gains on sales of leasing equipment decreased 4% in 2007, as a
by a loss on the sale of home lending assets classified as
decline in end of lease activity in both the U.S. and International
available for sale at September 30, 2007. The 2005 amount
businesses in Vendor Finance was offset by strong equipment
included the gains from the sale of a New York City apartment
sale gains in the Transportation Finance rail business.
complex and the sale of a micro-ticket leasing business.
Gains on securitization decreased 4% in 2007 after having
Gain on derivatives relate to the 2005 mark-to-market of cer-
increased 20% in 2006. Gains as a percentage of volume secu-
tain compound cross-currency swaps that did not qualify for
ritized were 1.1%, 1.3% and 0.9% in 2007, 2006 and 2005 (on
hedge accounting treatment. All of these swaps were either
volume of $4.2 billion, $3.6 billion and $4.3 billion).
terminated or had matured as of December 31, 2005.
SALARIES AND GENERAL OPERATING EXPENSES

PROVISION FOR SEVERANCE AND REAL ESTATE EXIT ACTIVITIES
Salaries and General Operating Expenses for the years ended December 31 (dollars in millions)
2007
______________ 2006
______________ 2005
______________
Salaries and employee benefits $ 892.5 $ 903.5 $ 695.8
PAGE 30
Other general operating expenses 586.2

______________ 479.1
______________ 418.0
______________
Salaries and general operating expenses $1,478.7
______________ $1,382.6
______________ $1,113.8
______________
______________ ______________ ______________
Provision for severance and real estate exit activities $ 76.8
______________ $ 19.6
______________ $ 25.2
______________
______________ ______________ ______________
Efficiency ratio (1) 41.1% 45.3% 38.7%
Headcount 6,700 7,345 6,340
(1) The efficiency ratio is the ratio of salaries and general operating expenses to total net revenues (before provision for credit losses and valua-
tion allowance). The efficiency ratio was 47.9% excluding gains on portfolio dispositions and the gain on sale of our Dell Financial Services joint
venture interest.
We concentrated on expanding the sales force to grow the such as mergers and acquisitions advisory services, as well as
business during 2006 and 2005. In 2007, we shifted our focus growth of our international operations.
to divesting and exiting some businesses. This will allow us to
The 2007 provision for severance and real estate exit activities
focus on our core businesses in 2008. These initiatives
resulted from the combination of cost savings actions related
increased the provision for severance and real estate exit
to a reduction in force of 330 people in the second quarter and
activities. The reduction in salaries and employee benefits in
the closing of the home lending origination platform in the
2007 was driven by lower incentive compensation, correspon-
third quarter, involving 550 employees and the closing of 27
ding to the reduced earnings in 2007, and lower headcount.
offices. These 2007 actions are expected to generate annual
The 2007 increase in other general operating expenses
savings of approximately $67 million. We continued these cost
included a $16 million write off of capitalized expenses related
savings initiatives in the first quarter of 2008, including
to a terminated capital initiative in our commercial aerospace
streamlining of back office functions, with a reduction in force
business due to market conditions, higher legal expenses, and
of approximately 470 people. This action will result in a
integration costs associated with two significant acquisitions
restructuring charge of approximately $50 million in 2008,
within Vendor Finance. In 2006 the increased expenses prima-
with expected annual savings of approximately $60 million.
rily related to personnel, as we added over 1,000 employees
during 2006. The majority of the hires related to growing our See Note 24 – Severance and Facility Restructuring Reserves
sales force in existing lines and establishing new businesses, for additional information.
03.30230-Part2.qxp 3/6/08 1:20 PM Page 31
IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS

During the third quarter of 2007, legislation was passed with existing business, management concluded that the goodwill
respect to the student lending business. Among other things, and intangibles assets related to the student lending business
the legislation reduced the maximum interest rates that can were not impaired at that time.
be charged by lenders in connection with a variety of loan
During the fourth quarter of 2007, market valuations for stu-
products, increased loan origination fees paid to the govern-
dent lending businesses declined further, reflecting a failed
ment by lenders, and reduced the lender guarantee
sale of a significant student lender, the market’s continued
percentage. The legislation went into effect for all new FFELP
emerging view of the legislative changes and the general diffi-
student loans with first disbursements on or after October 1,
cult environment for lenders in this sector, including higher
2007. The reduced guarantee percentage, from 97% to 95%,
funding costs and credit deterioration in the industry. As a
will be in effect for loans originated after October 1, 2012. As a
result, management performed an impairment test for the
result, in the third quarter, management assessed the value of
goodwill and intangible assets related to the student lending
goodwill and intangible assets associated with the student
business as of December 31, 2007. In this analysis, manage-
lending business following the passage of the legislation.
ment estimated the fair value of the unit’s individual assets
Based on management’s assessment of the legislation’s
and liabilities (primarily loans and debt), and determined that
potential impact on earnings levels for new loan originations,
the impairment charge of $312.7 million, representing the
factoring in expected ensuing business practices and lever-
entire goodwill and intangible asset balance, was required.
age, coupled with assumptions and projected cash flows of the
INCOME TAXES
Income Tax Data for the years ended December 31,
2007
______________ 2006
______________ 2005
______________
PAGE 31
(Benefit) provision for income taxes $(194.4) $364.4 $464.2
Tax liability releases / NOL valuation adjustments 44.7 69.7 34.6
Tax benefit – goodwill and intangible asset impairment charge 10.3 – –
Tax benefits – home lending losses (net of valuation
allowance) and other noteworthy items 446.0
______________ –
______________ –
______________
Provision for income taxes - adjusted $ 306.6
______________ $434.1
______________ $498.8
______________
______________ ______________ ______________
Effective tax rate – reported 71.4% 25.8% 32.8%
Effective tax rate – adjusted 24.3% 30.7% 35.2%
CIT’s reported 2007 tax provision reflects a tax benefit of shown in the preceding table. These effects, along with the
$194.4 million, compared with tax expense of $364.4 million lower tax rates and tax benefits associated with our interna-
and $464.2 million in 2006 and 2005, respectively. In 2007, sig- tional operations and the tax expense reductions outlined
nificant noteworthy items impacted the relationship between below, are the primary drivers of the significant tax benefit
recorded tax benefits and pre-tax earnings. Pre-tax losses recorded in 2007.
were $272.3 million for the year ended December 31, 2007,
The 2007 income tax benefit included $44.7 million in net tax
with a corresponding tax benefit of $194.4 million, resulting in
expense reductions comprised of the effects of a New York
a reported effective tax rate of 71.4%.
State law change, deferred tax adjustments related to foreign
The statutory tax rates (US federal and applicable state tax) affiliates and the refinement of transfer pricing between vari-
applied to the pre-tax losses associated with the significant, ous international jurisdictions. These tax benefits were offset
noteworthy items (valuation adjustments and credit loss provi- by a net increase in liabilities related to uncertain tax positions
sions related to the home lending assets, the loss on in accordance with Financial Accounting Standards Board
extinguishment of debt, the gain on sale of CIT’s interest in the Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in
Dell joint venture, the write-off of capitalized expenses related Income Taxes”, and an increase to the recorded valuation
to a terminated capital raising initiative, and the gains on the allowance for state net operating losses and capital loss car-
sales of portfolios) were higher than the tax rates applied to ryovers anticipated not to be utilized. The 2007 income tax
the Company’s other items of ordinary income and expense. benefit also included a $10.3 million reduction in tax related to
The combined tax benefit related to these items amounted to the write-off of the student lending intangible asset. The
$446.0 million for the year ended December 31, 2007, as goodwill impairment was not tax-deductible.

03.30230-Part2.qxp 3/6/08 1:20 PM Page 32
CIT’s effective tax rate differs from the U.S. federal tax rate of provision also included a net $6.8 million reversal of state net
35% primarily due to state and local income taxes, foreign operating loss (NOL) valuation allowances (net of state
earnings taxed at lower rates, and permanent differences deferred tax write-offs), reflecting management’s updated
between the book and tax treatment of certain items. The assessment with respect to higher expected loss utilization,
lower effective tax rates in 2006 and 2007, excluding the tax and $9.6 million in additional tax expense, including an
liability releases and NOL valuation allowance adjustments, amount relating to the enactment of a tax law change during
reflects our strategy to relocate and fund certain aerospace the second quarter of 2006 that reduced benefits relating to
assets offshore, favorable tax treatment for certain aircraft certain leveraged lease transactions.
leasing operations conducted offshore, coupled with
The 2005 provision for income taxes benefited from the
improved international earnings and reduced state and local
release of a $17.0 million deferred tax liability associated with
income taxes.
the offshore aerospace initiative and the release of a tax liabil-
The 2006 provision for income taxes was reduced by $69.7 mil- ity of $17.6 million relating to our international operations, as
lion, primarily due to a $72.5 million release of deferred we finalized a tax filing position based on a favorable opinion
income tax liabilities from the relocation and funding of cer- received from the local tax authorities.
tain aerospace assets to lower tax jurisdictions. The 2006
See Note 15 for additional information.
PAGE 32
03.30230-Part2.qxp 3/6/08 1:20 PM Page 33
FINANCING AND LEASING ASSETS

Financing and Leasing Assets by Segment as of December 31 (dollars in millions)
% Change
__________________________________
2007
________________ 2006
________________ 2005
________________ 07 vs. 06 _______________
________________ 06 vs. 05
Corporate Finance
Finance receivables $21,326.2 $20,190.2 $14,891.1 5.6% 35.6%
Operating lease equipment, net 459.6 204.4 177.7 124.9% 15.0%
Financing and leasing assets held for sale 669.3
________________ 616.1
________________ 358.2
________________ 8.6% 72.0%
Owned assets 22,455.1 21,010.7 15,427.0 6.9% 36.2%
Finance receivables securitized and managed by CIT 1,526.7
________________ 1,568.7
________________ 2,525.3
________________ (2.7)% (37.9)%
Managed assets 23,981.8
________________ 22,579.4
________________ 17,952.3
________________ 6.2% 25.8%
Transportation Finance
Finance receivables 2,551.3 2,123.3 1,895.4 20.2% 12.0%
Operating lease equipment, net 11,031.6 9,846.3 8,408.5 12.0% 17.1%
Financing and leasing assets held for sale –
________________ 75.7
________________ 150.3
________________ (100.0)% (49.6)%
Owned assets 13,582.9
________________ 12,045.3
________________ 10,454.2
________________ 12.8% 15.2%
Trade Finance
Finance receivables 7,330.4
________________ 6,975.2
________________ 6,691.4
________________ 5.1% 4.2%
PAGE 33
Vendor Finance
Finance receivables 10,373.3 6,888.9 7,048.0 50.6% (2.3)%
Operating lease equipment, net 1,119.3 967.2 1,049.5 15.7% (7.8)%
________________ 529.3
________________ 720.3
________________ (12.9)% (26.5)%
Owned assets 11,953.4 8,385.4 8,817.8 42.6% (4.9)%
Finance receivables securitized and managed by CIT 4,104.0
________________ 3,850.9
________________ 3,646.7
________________ 6.6% 5.6%
________________ 12,236.3
________________ 12,464.5
________________ 31.2% (1.8)%
Home Lending
Finance receivables 8,775.6 9,861.3 8,416.0 (11.0)% 17.2%
________________ 240.0
________________ 136.0
________________ 44.1% 76.5%
Owned assets 9,121.4 10,101.3 8,552.0 (9.7)% 18.1%
Finance receivables securitized and managed by CIT 680.5
________________ 841.7
________________ 1,113.7
________________ (19.2)% (24.4)%
________________ 10,943.0
________________ 9,665.7
________________ (10.4)% 13.2%
Consumer
Finance receivables - student lending 11,499.9 8,488.9 5,051.0 35.5% 68.1%
Finance receivables - other 679.9 537.1 302.9 26.6% 77.3%
________________ 332.6
________________ 254.2
________________ (60.9)% 30.8%
Owned assets 12,309.9 9,358.6 5,608.1 31.5% 66.9%
Other – Equity Investments 165.8
________________ 25.4
________________ 30.2
________________ 552.8% (15.9)%
Managed assets $83,230.1
________________ $74,163.2
________________ $62,866.4
________________ 12.2% 18.0%
________________ ________________ ________________

03.30230-Part2.qxp 3/6/08 1:20 PM Page 34
Managed assets grew by 12% in 2007, reflecting an increase in BUSINESS VOLUMES, SALES/SYNDICATIONS,
new business volume and portfolio acquisitions. Most of the ACQUISITIONS AND DISPOSITIONS
growth was on balance sheet, as securitized assets increased In 2007, we neared our record 2006 level of business
modestly. Growth was broad based in all segments with the volume growth as we continued our strategy to advance our
exception of Home Lending, which ceased originations during sales culture. The decline from 2006 was the result of
the year. We continued our discipline of allocating capital to our decision to cease home lending originations in the third
businesses with higher risk-adjusted returns by liquidating quarter. New business volume (excluding factoring) was up
non-strategic portfolios. 7% and 24% from the preceding years in the commercial seg-
See Non-GAAP Financial Measurements for reconciliation of ments. Excluding the impact of the sold construction finance
managed assets. business, volume in the commercial segments was up 11%
from 2006.
Total Business Volume (excluding factoring)

For the years ended December 31 (dollars in millions)
2007
________________ 2006
________________ 2005
________________
Corporate Finance $15,974.7 $15,464.2 $ 9,626.8
Transportation Finance 3,060.4 3,137.2 2,264.1
Vendor Finance 9,733.5
________________ 8,202.0
________________ 9,706.5
________________
Commercial Segments 28,768.6 26,803.4 21,597.4
Home Lending 4,192.4 7,629.8 6,927.1
Consumer 6,630.2
________________ 6,883.3
________________ 2,726.0
________________
Total new business volume $39,591.2
________________ $41,316.5
________________ $31,250.5
________________
________________ ________________ ________________
PAGE 34
Syndications and Receivable Sales

For the years ended December 31 (dollars in millions)
2007
________________ 2006
________________ 2005
________________
Corporate Finance $5,111.2 $ 4,728.0 $1,563.0
Transportation Finance 454.6 310.0 199.0

________________ 735.0
________________ 296.0
________________
Commercial Segments 6,132.7 5,773.0 2,058.0
Home Lending 610.3 3,124.0 2,256.0
Consumer 2,027.5
________________ 1,896.0
________________ 1,105.0
________________
Total $8,770.5
________________ $10,793.0
________________ $5,419.0
________________
________________ ________________ ________________
As part of a strategic initiative to leverage origination plat- and 2006. Due to market liquidity constraints, sales and syndi-
forms and broaden our revenue generation, we increased our cation activities were sharply reduced during the second half
sales and syndication activities during the first half of 2007 of 2007.
03.30230-Part2.qxp 3/6/08 1:20 PM Page 35
ACQUISITIONS
Acquisition Summary (dollars in millions)
Financing
and Leasing
Asset Type
________________________________________________________ Assets
_____________________ Closing
______________________________ Segment
________________________________
Barclays — U.K. and German
vendor finance businesses $2.0 billion 1st quarter 2007 Vendor Finance
Citicapital — U.S. business
technology finance unit $2.0 billion 2nd quarter 2007 Vendor Finance
Edgeview Partners M&A Advisory – 3rd quarter 2007 Corporate Finance
With the exception of the Edgeview M&A acquisition, these the UK, with the balance in Germany. The second quarter
acquisitions were add-ons to existing CIT businesses and the acquisition included assets that complemented existing
existing assets at the acquisition date are not reflected in our domestic CIT businesses. The acquisition of Edgeview
new business volume in the year of acquisition. The first quar- Partners provides additional advisory service capabilities to
ter Vendor Finance acquisition significantly leveraged our private-equity firms and middle market companies, which is
existing expertise in managing vendor relationships across part of our ongoing initiative to boost revenue from fees and
Europe. The businesses acquired provide asset finance to cus- decrease our reliance on interest income.
tomers of industrial equipment and technology manufacturers
See Note 23 – Goodwill and Intangible Assets for additional
and suppliers throughout the United Kingdom and Germany.
information.
Approximately 60% of the purchased assets were originated in
PAGE 35
DISPOSITIONS
Disposition Summary (dollars in millions)
Financing
and Leasing
Asset Type
________________________________________________________ Assets
_____________________ Closing
_____________________________ Segment
_______________________________
Construction finance $2.6 billion 2nd quarter 2007 Corporate Finance
Home Lending assets $0.9 billion 4th quarter 2007 Home Lending
Systems leasing $0.7 billion 4th quarter 2007 Vendor Finance
DFS equity – 4th quarter 2007 Vendor Finance
In addition to normal course sales and syndications in a prior RESULTS BY BUSINESS SEGMENT
table, we periodically dispose of receivables and other assets Effective with the third quarter of 2007, and consistent with
that we determine do not meet our risk-adjusted return crite- recent management changes, our segment disclosures reflect
ria or do not fit in with our strategic direction, including growth the following changes. Prior period data conforms to current
and scale characteristics. This guided the disposition initia- period presentation.
tives above, thereby freeing up the corresponding capital for
redeployment. We sold our construction business and made _ The home lending business is reported as a separate seg-
the effort to sell much of our manufactured housing and home ment.
lending portfolios. The sale of equity is the sale of CIT’s 30% _ The student lending and consumer loan businesses, previ-
interest in its Dell Financial Services joint venture due to Dell’s ously reported in the Consumer and Small Business
exercise of a purchase option, not a sale of financing assets. Lending segment, are reported in the Consumer segment.
_ The small business lending unit, previously reported in the
former Consumer and Small Business Lending segment,
is reported in the Corporate Finance segment.

03.30230-Part2.qxp 3/6/08 1:20 PM Page 36
Results by Business Segment for the years ended December 31 (dollars in millions)
2007
______________ 2006
______________ 2005
______________
Net Income / (Loss)
Corporate Finance $ 453.0 $ 284.3 $266.5
Transportation Finance 271.1 259.8 116.3
Trade Finance 164.0 162.2 173.5
______________ 275.8
______________ 289.8
______________
Commercial Segments 1,298.2
______________ 982.1
______________ 846.1
______________
Home Lending (989.2) 41.2 (15.7)
Consumer (274.9) 41.8 46.4
Corporate & Other (145.1)
______________ (49.3)
______________ 59.6
______________
Total $ (111.0)
______________
______________ $1,015.8
______________
______________ $936.4
______________
______________
Return on Equity
Corporate Finance 18.3% 13.6% 14.6%
Transportation Finance 16.3% 18.4% 9.2%
Trade Finance 17.8% 18.3% 19.8%
Vendor Finance 23.6% 27.0% 26.7%
Commercial Segments 19.1% 18.2% 16.7%
Home Lending (52.3%) 5.4% (2.6%)
Consumer (171.8%) 9.1% 11.7%
Corporate & Other (2.1%) (1.2%) 0.6%
PAGE 36
Total (1.6%) 15.0% 15.1%
Beginning with the first quarter of 2007, we refined our capital _ Total net revenues (net finance revenue plus other income)
allocation factors and also began allocating certain expenses increased 34% in 2007 and 17% in 2006 from the prior year.
to our segments to measure segment performance on a more Finance margins as a percentage of earning assets have
fully “loaded” basis. These expenses include equity-based trended slightly down over the presented years. Other
compensation and corporate support costs, as well as a por- income in 2007 was flat with 2006 after 2006 was up 18%
tion of the provisions for credit losses, which had previously from 2005, reflecting two years of strong fees, including the
been recorded in Corporate and Other. Certain other expenses contribution of higher advisory fees from a 2007 acquisition
are not allocated to the operating segments. These are of a mergers and advisory firm. However, partially offset-
reported in Corporate and Other and consist primarily of the ting this performance were lower syndications fees due to
following: (1) certain funding costs, as the segment results lack of market liquidity in the latter half of 2007.
reflect debt transfer pricing that matches assets (as of the _ After being flat in 2006 compared to the prior year in both
origination date) with liabilities from an interest rate and amount and percentage of receivables (at approximately 20
maturity perspective; (2) certain tax provisions and benefits; basis points), charge-offs trended up in 2007 on a lower
(3) a portion of credit loss provisioning in excess of amounts level of recoveries. 2006 recoveries were high and
recorded in the segments; and (4) interest and dividends on increased approximately $16 million over 2005.
preferred securities, as segment risk adjusted returns are _ Return on risk-adjusted capital increased in 2007 due to
based on the allocation of common equity. the gain on sale of the U.S. construction portfolio. Absent
this gain, the 2007 return was 12.6%.
Results by business segment are discussed below. See Note _ Volume was strong across virtually all of the businesses.
21 – Business Segment Information for additional details.
Newer businesses such as the syndicated loan group (up
Corporate Finance 49% to $2.3 billion) contributed to the 10% increase over
_ Net income increased from the preceding years, driven by 2006. Healthcare, which led the 2006 growth of over 65%
profitability improvements across most businesses and a from 2005, was down during 2007.
significant 2007 gain on the sale of the U.S. construction _ Owned assets growth was up 7% over 2006, muted by the
portfolio. Excluding the gain, net income increased sequen- sale of the $2.6 billion construction portfolio. Growth during
tially by 10% in 2007 and 7% in 2006, year over year. 2007 was highlighted by the commercial and industrial and
Significant contributors to the 2007 improvements were the the syndicated loan groups. Securitized assets were slightly
syndicated loan group, healthcare and commercial and lower as we shifted strategy to sales and syndications during
industrial. 2006. 2006 owned asset growth was 36% from 2005
03.30230-Part2.qxp 3/6/08 1:20 PM Page 37
year-end, with strength in healthcare, syndicated loan busi- _ During 2007 we capitalized on our prior year European
ness and communications, media & entertainment. acquisition, which helped increase assets 5% from 2006.
Transportation Finance Vendor Finance
_ This segment posted a second consecutive year of strong _ Net income improved from the prior year due to a pre-tax
bottom line performance, up from 2006 (last year included gain of $247.1 million from the sale of CIT’s 30% interest in
noteworthy items). Excluding the 2006 noteworthy items, the U.S. based Dell Financial Services (DFS) joint venture
net income was $251.0 million in 2006 and $133.2 million (resulting from Dell exercising its purchase option) and a
in 2005. The improvement reflected higher operating lease $21.0 million gain on the sale of the U.S. Systems Leasing
net revenues (operating lease rental income less the portfolio. Net income was up by 7% in 2006, reflecting
related equipment depreciation expense), led by aerospace strong growth in the international operations. Excluding
rentals, strong recoveries and a continued low effective tax the DFS gain, net income was down, as a reduction in other
rate due to the relocation of aircraft to Ireland coupled with income was mitigated by improved finance revenue. The
higher allocated tax benefits. 2006 improvement was driven primarily by higher other
_ Total net revenues improved 29% in 2007 on top of a strong income and reduced charge-offs. The 2005 results
49% in 2006, driven by stronger operating lease margins, included a $26.8 million after tax gain on the sale of our
which increased to 7.13% in 2007 from 6.74% in 2006 and domestic micro-ticket leasing point of sale unit.
5.58% in 2005. Aerospace rental rates continue to _ Total net revenues excluding the DFS and systems leasing
strengthen as aircraft are re-leased at higher rates, offset- gains decreased in 2007 driven by lower other income, and
ting moderating rail utilization rates. was up 4% in 2006. After a decline in 2006, net finance rev-
_ Credit metrics remained strong over the past two years. enue increased in 2007 driven by higher asset levels from
During 2007 we recovered $32 million of previously two significant acquisitions, totaling approximately $4 billion.
charged off U.S. carrier balances in commercial aero- Other revenue was down in 2007, excluding the DFS and sys-
space, on top of net recoveries during 2006. Delinquency tems leasing gains, due to lower joint venture fees, lower
and non-performing assets declined from 2005. gains from equipment sales and fewer securitization sales.
_ Return on risk-adjusted capital declined from 2006 prima- Other income was up 7% in 2006, reflecting strong gains from
PAGE 37
rily due to the noteworthy items last year, but remained asset sales and syndication activity in our global operations.
well above 2005 and CIT’s internal target return rate. _ Net charge-offs as a percentage of average finance receiv-
_ New business volume decreased slightly from a strong 2006 ables improved in both years. Both delinquency and
but outpaced 2005. In 2007, we committed to the purchase non-performing asset levels were up from 2006, primarily
of 37 additional new commercial aircraft and ended the year driven by U.S. operations due to the integration of leasing
with 107 aircraft on order. See Note 17 – Commitments and platforms.
Contingencies for additional information. _ Return on risk-adjusted capital was down after improving
_ Asset growth was 13% for the segment, driven by new air- in 2006.
craft deliveries from our order book and loans to major _ After declining for the past two years, new business volume
carriers. During 2007, we placed 26 new aircraft from our increased 19% in 2007, as activity from new vendor partners
order book. Our commercial aircraft are fully utilized; there and the current year acquisitions offset the anticipated
were no aircraft off-lease at year-end 2007 and 2006, down lower volumes from one U.S. joint venture. During the year,
from ten at year-end 2005. Rail demand experienced some we announced continued growth with new strategic part-
softening during 2007. Our rail assets were 92% utilized at nerships with several large international companies.
the end of 2007. _ Managed assets were up 31% from last year as the asset
growth from acquisitions and strong volumes, offset the
Trade Finance
sale of the systems leasing portfolio and the 20% decline in
_ Net income was up in 2007 after falling 5% in 2006 from the U.S. Dell program assets to $2.9 billion, reflecting both a
prior year. Higher finance income and lower provision for decline in the overall Dell financed sales volume and Dell
credit losses offset lower commissions. The decline in 2006 exercising its right to purchase a higher portion of the
was due to higher charge-offs. receivables originated by the DFS joint venture.
_ Total net revenues increased slightly in 2007 and 2006, as International assets grew 16% in 2006; while in total, man-
net finance margin as a percentage of average earning aged assets were down from 2005 primarily due to Dell U.S.
assets improved in both years. Other income declined
modestly in 2007 after a slight increase in 2006, as lower Consumer
commission income rates were offset by higher _ The unit recorded a loss in 2007 reflecting the $313 million
factoring volume. in impairment charges to write-off the goodwill and intan-
_ After increasing in 2006, net charge-offs were down 11 bps gible assets associated with the student lending business
in 2007. Delinquency and non-performing accounts and higher provisioning for charge-offs of other unsecured
trended down from 2006 levels, which in turn were up from consumer loans.
relatively low levels at December 31, 2005. _ Total net revenues were up slightly in 2007 after improving
_ Return on risk adjusted capital trended down over the peri- 50% in 2006. Net finance margin for the past two years has
ods presented, consistent with a decline in return on assets. been up in dollars but down as a percentage of AEA,
reflecting the growth in the lower margin federally

03.30230-Part2.qxp 3/6/08 1:20 PM Page 38
guaranteed student lending portfolio. Other revenue of cost or market, increased provision for credit losses in
decreased in 2007 on lower receivable gains after an increase the last quarter driven by the weak residential housing
of 43% in 2006 on higher gains on sales of student lending market and other charges on retained interests in securiti-
receivables. Average earning assets increased in 2007 and zations due to reduced portfolio credit performance. Net
2006, reflecting growth in the student lending business. income in 2006 increased 56% from the prior year, reflect-
_ We grew the deposit funding at CIT Bank by approximately ing higher receivable gains.
$350 million during 2007. Since its inception, the bank has _ Net finance revenue was flat with 2006, helped by the elim-
been primarily funding consumer loans, including home ination of amortization of certain fees in conjunction with
lending and other sales financing, businesses which we are the change in accounting as explained in Home Lending
currently exiting. During late 2007 we began the Bank’s Business – Significant 2007 Events and Actions section.
transition from a consumer-oriented lender to a commer- Accretion of discount associated with receivables reclassi-
cial lender and have recently originated certain loans in fied to held for investment at September 30 was not
conjunction with Corporate Finance. significant. Other income was down from 2006, as we
_ Net charge-offs were up in 2007, primarily due to the other recorded impairment charges on retained interests and
consumer loans in the Bank discussed above. We expect ceased selling receivables during the first half of 2007.
this higher level of charge-offs to continue into 2008 as we _ Home Lending charge-offs were down in 2007 from 2006 as
liquidate these bank portfolios. Past due and non-perform- the balance above does not reflect charge-offs that were
ing loans also increased. recorded during the period the portfolio was held for sale, in
_ Despite an increase in assets for the year, new business the third quarter. Charge-offs during this period were
volume decreased over last year’s strong loan origination instead taken against the valuation allowances.
levels at Student Loan Xpress. _ Managed assets were $9.8 billion, comprised of the follow-
_ Assets were up 32% for the year primarily due to growth in ing: net finance receivable $8.8 billion (unpaid principal
the student lending business, which grew by approximately balance less $0.5 billion discount), manufactured housing
$2.8 billion in 2007. See “Concentrations” section for more receivables held for sale of $0.3 billion and securitized
detail on student lending. assets of $0.7 billion. The portfolio is down from last year
as we announced our intent to exit the business and run-
Home Lending (See Home Lending Business – Significant
PAGE 38
off the held for investment portfolio.

2007 Events and Actions for more detail on home lending)
Corporate and Other net expenses are shown in the table
_ The 2007 net loss reflects pre-tax valuation allowances below:
totaling $1.3 billion to reduce assets held for sale to lower
Corporate and Other for the years ended December 31 (dollars in millions)
2007
____________ 2006
____________ 2005
____________
Unallocated revenues, net $ 24.9 $ 2.2 $ 29.1
Preferred stock dividends (30.0) (30.2) (12.7)
Provision for credit losses (38.3)
____________ (5.6)
____________ (27.7)
____________
Subtotal (43.4) (33.6) (11.3)
Provision for severance and real estate exit activities (22.5) (15.7) (23.2)
Mark-to-market on non-accounting hedge derivatives – – 24.4
Loss on early extinguishments of debt (79.2) – –
Real estate investment gain –
____________ –
____________ 69.7
____________
Total $(145.1)
____________ $(49.3)
____________ $ 59.6
____________
____________ ____________ ____________
The increase in unallocated net revenues reflects the impact were refinanced with securities that qualified for a higher level
of the disrupted capital markets, as higher interest revenue on of capital at a lower cost of funds as part of a capital optimiza-
excess liquidity offset operating expenses. The provision for tion initiative in place at that time.
credit losses reflects the portion of credit loss provisioning in
The 2005 derivative amounts related to certain compound
excess of amounts recorded in the segments.
derivative contracts, which did not qualify for hedge account-
The loss on early extinguishments of debt reflects the after tax ing treatment and were terminated in, or had matured by, the
charge to call $1.5 billion in high coupon debt and preferred fourth quarter of 2005.
capital securities in the first quarter of 2007. These securities
03.30230-Part2.qxp 3/6/08 1:20 PM Page 39
CONCENTRATIONS than 1.0%), 4.6% at December 31, 2006, and 4.5% at

Ten Largest Accounts December 31, 2005. The largest accounts primarily consist of
companies in the transportation, retail and energy industries.
Our ten largest financing and leasing asset accounts in the
The decline from the prior two years is primarily due to the
aggregate represented 4.1% of our total financing and leasing
growth in our consumer and smaller ticket vendor portfolios.
assets at December 31, 2007 (the largest account being less
Operating Leases
Operating Leases as of December 31 (dollars in millions)
2007
________________ 2006
________________ 2005
________________
Transportation Finance – Aerospace (1) $ 7,206.8 $ 6,327.6 $5,327.1
Transportation Finance – Rail and Other 3,824.8 3,518.7 3,081.4
Vendor Finance 1,119.3 967.2 1,049.5
Corporate Finance 459.6
________________ 204.4
________________ 177.7
________________
Total $12,610.5
________________ $11,017.9
________________ $9,635.7
________________
________________ ________________ ________________
(1) Aerospace includes commercial, regional and corporate aircraft and equipment.
The increases in the Transportation Finance– Aerospace port- The increase in the Vendor Finance operating lease portfolio
folio reflect deliveries of 26 new commercial aircraft from our reflects increases in our international portfolio, largely
order book. We had 219 commercial aircraft on operating lease through acquisition.
at December 31, 2007, up from 192 last year and 182 in 2005.
The increase in Corporate Finance operating leases is prima-
PAGE 39
As of December 31, 2007, our operating lease railcar portfolio
rily due to commercial real estate operating leases.
consisted of approximately 98,000 cars including 29,000 cars
under sale-leaseback contracts. Railcar utilization remained
fairly strong with approximately 92% of our fleet in use.
Leveraged Leases
Leveraged Lease Portfolio as of December 31 (dollars in millions)
Transaction Component 2007
______________ 2006
______________ 2005
______________
Project finance $163.6 $192.7 $ 360.1
Commercial aerospace 86.2 138.3 367.3
Rail 152.3 137.2 212.9
Other 32.3
______________ 28.1
______________ 80.4
______________
Total leveraged lease transactions $434.4
______________ $496.3
______________ $1,020.7
______________
______________ ______________ ______________
As a percentage of finance receivables 0.7%
______________ 0.9%
______________ 2.3%
______________
______________ ______________ ______________
The major components of our net investments in leveraged remarketing of the equipment under operating lease agree-
leases include: 1) power and utility project finance transac- ments at the expiration of the original lease transactions.
tions, 2) rail transactions; and 3) commercial aerospace
Joint Venture Relationships
transactions, including tax-optimized leveraged leases. The
reduction in the project finance balance reflects refinancing of Our strategic relationships with industry-leading equipment
two power generation facilities, which resulted in the classifi- vendors are a significant origination channel for our financing
cation of the resulting transactions as conventional capital and leasing activities. These vendor alliances include tradi-
leases. The decline in the aerospace balances generally tional vendor finance programs, joint ventures and profit
reflects the debt restructuring and reclassification to operating sharing structures. Our vendor programs with Dell, Snap-on
leases in conjunction with our initiative to relocate and fund and Avaya are among our largest alliances.
certain assets overseas. The 2006 decline in rail is due to the

03.30230-Part2.qxp 3/6/08 1:20 PM Page 40
We have multiple program agreements with Dell, one of a CIT direct origination program, was extended through
which was Dell Financial Services (DFS), covering originations September 2009, pursuant to a renewal provision in the
in the U.S. The agreement, provided Dell with the option to agreement.
purchase CIT’s 30% interest in DFS, which was exercised dur-
Our financing and leasing assets include amounts related to
ing the fourth quarter of 2007 resulting in a pre-tax gain of
the Dell, Snap-on, and Avaya joint venture programs. These
$247.1 million. We maintain the right to provide 25% (of sales
amounts include receivables originated directly by CIT as well
volume) funding to DFS in 2009 and 35% in 2008, compared to
as receivables purchased from joint venture entities. A signifi-
50% in 2007. We also retain vendor finance programs for Dell’s
cant reduction in origination volumes from any of these
customers in Canada and in more than 40 countries outside
alliances could have a material impact on our asset and net
the United States that are not affected by Dell’s purchase of
income levels.
our DFS interest.
For additional information regarding certain of our joint ven-
The joint venture agreement with Snap-on runs until January
ture activities, see Note 20 – Certain Relationships and
2009. The Avaya agreement, which relates to profit sharing on
Related Transactions.
Joint Venture Relationships as of December 31 (dollars in millions)

2007
______________ 2006
______________ 2005
______________
Owned Financing and Leasing Assets
Dell U.S. $ 604.7 $1,307.9 $1,986.3
Dell - International 1,748.1 1,667.9 1,528.3
Snap-on 1,010.5 1,001.2 1,035.7
Avaya Inc 399.7 478.0 563.0
Securitized Financing and Leasing Assets
PAGE 40
Dell U.S. $2,341.6 $2,394.5 $2,526.1

Dell - International 84.7 122.3 34.2
Snap-on 24.1 39.2 55.4
Avaya Inc 402.4 446.1 460.5
03.30230-Part2.qxp 3/6/08 1:20 PM Page 41
Geographic Composition (%)

Geographic Concentrations by Obligor as of December 31
2007
______________ 2006
______________ 2005
______________
State
California 8.7% 9.3% 9.8%
Texas 6.3% 7.2% 7.5%
New York 6.8% 6.6% 6.7%
All other states 52.4%
______________ 55.8%
______________ 54.9%
______________
Total U.S. 74.2%
______________
______________ 78.9%
______________
______________ 78.9%
______________
______________
Country
Canada 6.3% 5.6% 6.1%
England 5.1% 3.4% 3.5%
China 1.5% 1.2% 1.0%
Mexico 1.4% 1.1% 0.9%
Germany 2.2% 1.1% 0.8%
Australia 1.2% 1.0% 1.1%
France 0.8% 0.9% 1.0%
All other countries 7.3%
______________ 6.8%
______________ 6.7%
______________
Total International 25.8%
______________ 21.1%
______________ 21.1%
______________
______________ ______________ ______________
PAGE 41
The table summarizes significant state concentrations greater increased in 2007 due to increased originations and the
than 5.0% and international concentrations in excess of 1.0% Barclays acquisition. For each period presented, our managed
of our owned financing and leasing portfolio assets. Domestic asset geographic composition did not differ significantly from
concentrations decreased as a result of asset dispositions in our owned asset geographic composition.
construction and home lending. International assets

03.30230-Part2.qxp 3/6/08 1:20 PM Page 42
Industry Composition
Our industry composition is detailed in Note 5 – Concentrations. We believe the following discussions, covering certain industries,
are of interest to investors.
Aerospace
Commercial Aerospace Portfolio as of December 31 (dollars in millions)
2007
____________________________________________ 2006
____________________________________________ 2005
____________________________________________
Net Net Net
Investment
______________________ Number
_________________ Investment
______________________ Number
_________________ Investment _________________
______________________ Number
By Region:
Europe $2,906.2 94 $2,880.2 88 $2,348.4 75
U.S. and Canada 1,279.5 60 1,288.0 60 1,243.6 62
Asia Pacific 2,274.9 82 1,705.6 52 1,569.0 52
Latin America 1,136.0 36 835.4 27 533.7 20
Africa / Middle East 567.8
______________________ 15
_________________ 402.1
______________________ 10
_________________ 257.2
______________________ 6
_________________
Total $8,164.4
______________________ 287
_________________ $7,111.3
______________________ 237
_________________ $5,951.9
______________________ 215
_________________
______________________ _________________ ______________________ _________________ ______________________ _________________
By Manufacturer:
Boeing $3,579.6 154 $3,105.7 124 $2,644.6 124
Airbus 4,575.8 132 3,996.2 113 3,269.0 84
Other 9.0
______________________ 1
_________________ 9.4
______________________ –
_________________ 38.3
______________________ 7
_________________
Total $8,164.4
______________________
______________________ 287
_________________
_________________ $7,111.3
______________________
______________________ 237
_________________
_________________ $5,951.9
______________________
______________________ 215
_________________
_________________
By Body Type(1):
PAGE 42
Narrow body $6,136.4 226 $5,168.9 179 $4,331.0 165

Intermediate 1,821.9 48 1,690.3 43 1,347.2 27
Wide body 197.1 12 242.7 15 235.4 16
Other 9.0
______________________ 1
_________________ 9.4
______________________ –
_________________ 38.3
______________________ 7
_________________
Total $8,164.4
______________________
______________________ 287
_________________
_________________ $7,111.3
______________________
______________________ 237
_________________
_________________ $5,951.9
______________________
______________________ 215
_________________
_________________
By Product:
Operating lease $7,120.1 219 $6,274.0 192 $5,327.1 182
Leveraged lease (other) 40.8 2 95.2 4 232.1 10
Leveraged lease (tax optimized) 45.4 1 43.1 1 135.2 7
Capital lease 225.5 9 151.9 6 67.7 3
Loan 732.6
______________________ 56
_________________ 547.1
______________________ 34
_________________ 189.8
______________________ 13
_________________
Total $8,164.4
______________________ 287
_________________ $7,111.3
______________________ 237
_________________ $5,951.9
______________________ 215
_________________
______________________ _________________ ______________________ _________________ ______________________ _________________
Number of accounts 105 92 93
Weighted average age of fleet (years) 5 5 6
Largest customer net investment $ 287.3 $ 288.6 $ 277.3
Off-lease aircraft – – 10
(1) Narrow body are single aisle design and consist primarily of Boeing 737 and 757 series and Airbus A320 series aircraft. Intermediate body are
smaller twin aisle design and consist primarily of Boeing 767 series and Airbus A330 series aircraft. Wide body are large twin aisle design and
consist primarily of Boeing 747 and 777 series and McDonnell Douglas DC10 series aircraft.
Our top five commercial aerospace exposures totaled Our aerospace assets include both operating and capital leases
$1,321.4 million at December 31, 2007. Four of the top five as well as secured loans. Management considers current lease
exposures are to carriers outside of the U.S. The largest expo- rentals as well as relevant and available market information
sure to a U.S. carrier at December 31, 2007 was $234.6 million. (including third-party sales for similar equipment, published
appraisal data and other marketplace information) both in
Aerospace depreciation expense for the years ended
determining undiscounted future cash flows when testing for
December 31, 2007, 2006 and 2005 totaled $330.5 million,
the existence of impairment and in determining estimated fair
$299.4 million, and $248.4 million.
03.30230-Part2.qxp 3/6/08 1:20 PM Page 43
value in measuring impairment. We adjust the depreciation regarding commitments to purchase additional aircraft and
schedules of commercial aerospace equipment on operating Note 5 – Concentrations for further discussion on geographic
leases or residual values underlying capital leases when pro- and industry concentrations.
jected fair value at the end of the lease term is less than the Student Lending (Student Loan Xpress)
projected book value at the end of the lease term. We review
The Consumer Finance student lending portfolio, which is
aerospace assets for impairment annually, or more often
marketed as Student Loan Xpress, totaled $11.6 billion at
should events or circumstances warrant. Aerospace equipment
December 31, 2007, representing 15.1% of owned and 13.9%
is defined as impaired when the expected undiscounted cash
of managed assets. Loan origination volumes totaled $5.9 bil-
flow over its expected remaining life is less than its book value.
lion in 2007, $6.3 billion in 2006, and $2.4 billion for the period
We factor historical information, current economic trends and
of CIT ownership beginning in February 2005. Student Loan
independent appraisal data into the assumptions and analyses
Xpress has arrangements with certain financial institutions to
we use when determining the expected undiscounted cash flow.
sell selected loans and works jointly with these financial insti-
Included among these assumptions are the following: lease
tutions to promote these relationships. These sales are held
terms, remaining life of asset, lease rates, remarketing
on-balance sheet and are further described in “On-balance
prospects and maintenance costs.
Sheet Securitization Transactions”.
See Item 8. Financial Statements and Supplementary Data, Note
Finance receivables, including held for sale, by product type
17 – Commitments and Contingencies for additional information
for our student lending portfolio are as follows:
Product Type at December 31 (dollars in millions)

2007 ________________________
________________________ 2006 ________________________
2005
Consolidation loans $ 9,050.4 $7,399.8 $4,668.7
Other U.S. Government guaranteed loans 1,935.3 1,064.1 568.7
Private (non-guaranteed) loans and other 599.3 ________________________
308.8 ________________________
30.4
PAGE 43
________________________
Total $11,585.0 $8,772.7
________________________ ________________________
________________________ $5,267.8
________________________ ________________________
________________________
Delinquencies (sixty days or more) % 5.06% 4.71% 2.63%
Top state concentrations California, California, California,
New York, New York, New York,
Texas, Ohio, Texas, Ohio, Texas, Ohio,
Pennsylvania Pennsylvania Pennsylvania
Top state concentrations (%) 36% 35% 37%
In late 2007, we ceased originating new private student loans. Based on decreased market valuations and lower profit
However, the portfolio is expected to grow approximately expectations for student lending businesses in the fourth
$200 million in 2008 due to existing funding commitments. quarter of 2007 due to higher funding and credit costs, we
Loans to students at the top 5 institutions represent approxi- wrote off the entire balance of goodwill and intangible assets,
mately 50% of the portfolio at December 31, 2007. approximately $313 million, associated with this business
in a fourth quarter impairment charge. See Note 23 for
During the third quarter of 2007, legislation was passed with
additional information regarding goodwill and intangible
respect to the student lending business. Among other things,
assets.
the legislation reduces the maximum interest rates that can
be charged by lenders in connection with a variety of loan In February 2008, a private pilot training school, whose students
products, increases loan origination fees paid to the govern- have outstanding loans totalling approximately $196 million at
ment by lenders, and reduces the lender guarantee December 31, 2007, filed for Chapter 7 bankruptcy.
percentage. The legislation goes into effect for all new FFELP Management is currently evaluating the collectibility and pro-
student loans with the first disbursements on or after October jected cash flows related to these loans. Given the unsecured
1, 2007. The reduced guarantee percentage, from 97% to 95%, nature of the loans and the uncertainties regarding collection,
is in effect for loans originated after October 1, 2012. As a management currently expects additional reserves may be
result, management assessed the value of goodwill required in 2008 in connection with these loans. See Note – 27
associated with our student lending business following Subsequent Events for further information.
the passage of the legislation, and again in the fourth quarter.

03.30230-Part2.qxp 3/6/08 1:20 PM Page 44
RISK MANAGEMENT
Our business activities involve various elements of risk. We LIQUIDITY RISK MANAGEMENT
consider the principal types of risk to be market risk (includ- Our goal is to achieve a balance between the liquidity needed
ing interest rate, foreign currency and liquidity risk) and to fund our business, the cost of funds, our concentration risk
credit risk (including credit, collateral and equipment risk). from relying on only a few sources of funding, and demonstrat-
Managing risks is essential to conducting our businesses ing proven access to the markets. Our strategy for achieving
and to our profitability. Accordingly, our risk management this goal is to maintain multiple funding sources to meet the
systems and procedures are designed to identify and analyze needs of the business, to access multiple segments of the
key business risks, to set appropriate policies and limits, and capital markets, including commercial paper, unsecured debt,
to continually monitor these risks and limits by means of and both on-balance sheet and off-balance sheet securitiza-
reliable administrative and information systems, along with tions, and to maintain adequate back-up sources of liquidity,
other policies and programs. The Chief Risk Officer oversees such as committed conduit facilities and committed bank lines
credit and equipment risk management across the busi- of credit. We raise debt financing from multiple sources, with
nesses while the Vice Chairman and Chief Financial Officer funding decisions driven by the relative cost and availability of
oversees market risk management. these alternative sources.
Our Asset Quality Review Committee is comprised of members Our commercial paper programs provide short term financing,
of senior management, including the Vice Chairman and Chief and are comprised of U.S., Canadian and Australian pro-
Financial Officer, the Chief Risk Officer, the Controller and the grams. Outstanding commercial paper totaled $2.8 billion at
Director of Credit Audit. Periodically, this committee meets December 31, 2007, down from $5.4 billion and $5.2 billion at
with senior executives of our business units and corporate December 31, 2006 and 2005 due to reduced liquidity in the
credit risk management group to review portfolio performance, commercial paper market. In addition, our goal is to maintain
including the status of individual financing and leasing assets, committed bank lines in excess of aggregate outstanding
owned and managed, to obligors with higher risk profiles. In commercial paper, with available bank lines aggregating
addition, this committee periodically meets with the Chief $7.5 billion at December 31, 2007.
PAGE 44
Executive Officer of CIT to review overall credit risk, including

geographic, industry and customer concentrations, and the The capital markets experienced a heightened level of volatil-
reserve for credit losses. ity during 2007 that continues into 2008, causing corporate
borrowing spreads to widen significantly against benchmark
MARKET RISK MANAGEMENT rates, such as Treasury securities and LIBOR, and substan-
tially increasing the cost of funds available through traditional
We engage in transactions in the normal course of business
unsecured long-term funding sources. We issued $2.0 billion
that expose us to market risks. Market risk is the risk of loss
5-year, fixed-rate bonds in late November with a coupon rate

arising from changes in values of financial instruments, and
of 7.625%. Also in the fourth quarter of 2007, we executed a
includes liquidity risk, interest rate risk, foreign exchange
mandatory convertible transaction in which the Company sold
risk and derivative counterparty risk, each of which are dis-
approximately 27.6 million equity units for a total stated
cussed in detail below. We conduct what we believe are
amount of $690 million. These equity units carry a total distri-
appropriate management practices and maintain policies
bution rate of 7.75%. As a result of market dislocations and
designed to effectively mitigate such risks. The objectives of
the significant increase in the cost of unsecured debt, we have
our market risk management efforts are to preserve the eco-
reduced our reliance on the unsecured debt markets and
nomic and accounting returns of our assets by matching the
relied primarily on other funding sources, which included
repricing and maturity characteristics of our assets with that
asset-backed transactions that raised approximately $13.5
of our liabilities. Strategies for managing market risks asso-
billion of proceeds during 2007 from on-balance sheet financ-
ciated with changes in interest rates and foreign exchange
ings including: $5.1 billion secured by home loans, $5.5 billion
rates are an integral part of the process, because those
secured by student loans, $1.3 billion secured by factoring
strategies affect our future expected cash flows as well as
receivables and $1.6 billion secured by equipment loans and
our cost of capital.
leases; and off balance sheet financings of $3.4 billion
Our Capital Committee sets policies, oversees and guides secured by equipment loans and leases. We continued to
the interest rate and currency risk management process, access the commercial paper markets, but at significantly
including the establishment and monitoring of risk metrics, reduced levels, in order to reduce our exposure to volatility in
and ensures the implementation of those policies. Other that market. In addition to the secured funding, unsecured
risks monitored by the Capital Committee include derivative term-debt issued during 2007 totaled $11.4 billion, including
counterparty credit risk and liquidity risk. The Capital $5.1 billion variable-rate medium-term notes, $4.9 billion
Committee meets periodically and includes the Chief fixed-rate notes and $1.4 billion junior subordinated notes and
Executive Officer, Vice Chairman and Chief Financial Officer, convertible debt, most of which was issued in the first half of
Treasurer, and Controller, among others. 2007. Consistent with our strategy of managing debt refinanc-
ing risk, the weighted average maturity of unsecured senior
term-debt issued in 2007 was approximately five years.
Included with the fixed-rate notes are issuances under a retail
03.30230-Part2.qxp 3/6/08 1:20 PM Page 45
note program in which we offer fixed-rate senior, unsecured Capital markets volatility continued into 2008 resulting in our
notes utilizing numerous broker-dealers for placement to unsecured debt spreads remaining at historically wide levels.
retail accounts. During 2007, we issued $0.8 billion under this As a result, we expect to largely satisfy our estimated first half
program having maturities between 1.5 and 15 years. We plan funding requirements as follows:
on continuing to utilize diversified sources of debt funding.
2008 first and second quarter estimated funding requirements $6.0 – $8.0 billion
__________________________________
__________________________________
Estimated Sources of Funding
Existing cash $1.0 – $2.0 billion
Unsecured Issuances:
Senior unsecured notes $.75 – $2.0 billion
Bank deposits $.50 – $.75 billion
Asset-backed Issuances:
Equipment $1.25 – $1.50 billion
Student loans $.75 – $1.0 billion
Rail $.75 – $1.0 billion
Commercial loans $1.0 – $2.0 billion
During the first two months of 2008, we raised $2.1 billion of international operations. To further diversify our funding
asset backed financing including $900 million secured by sources, we maintain committed asset-backed facilities and
PAGE 45
commercial assets, $800 million secured by rail assets and shelf registration statements, which cover a range of assets
$400 million secured by residential mortgages. We also raised from equipment to consumer home lending receivables and
$600 million of unsecured term debt financing, principally trade accounts receivable. We have committed asset-backed
retail notes, as we elected not to access the institutional term facilities aggregating $13.0 billion covering a variety of
debt markets. asset classes, with approximately $2.2 billion of availability
Capital markets dislocations extended into the auction rate note under these facilities as of December 31, 2007. The tenor of
market in early 2008 with failed auctions spanning multiple these facilities is generally one year. During 2007, we renewed
issuers and asset classes. We have $1.175 billion of AAA rated $5.7 billion of these facilities, the majority of which occurred
and $150 million of AA rated auction rate securities outstanding in the second half of the year. We added $5.2 billion of addi-
linked to seasoned student loan securitizations that reset every tional facilities during 2007 (of which $2.2 billion was added
28 days. Failed note auctions result in the Company paying an in the fourth quarter) and anticipate further additions in 2008
average rate of LIBOR plus 1.5% on the AAA rated securities to provide flexibility in our funding needs. As noted in the
and LIBOR plus 2.5% on the AA rated securities. table below, we target the aforementioned minimum aggre-
gate alternate liquidity sources to equal short-term debt.
We maintain registration statements covering debt securities
These sources exceeded short-term debt at both period end
that we may sell in the future. At December 31, 2007, 4 billion
dates noted below. The expiration dates of the bank facilities
euros of registered but unissued debt securities were avail-
are set forth in Footnote 8 to our Consolidated Financial
able under our euro medium-term notes program, under
Statements. Our ability to sell assets into the committed
which we may issue debt securities and other capital market
asset-backed facilities expires at various dates in 2008 and
securities in multiple currencies. In addition, CIT maintains an
2009, with $1.6 billion expiring in the second quarter of 2008,
effective shelf registration with the Securities and Exchange
$5.7 billion expiring in the third quarter of 2008, $3.2 billion
Commission (SEC) for the issuance of senior and subordinate
expiring in the fourth quarter of 2008, and $1.0 billion expiring
debt, and other capital market securities that has no specific
in 2009. Depending on origination volume expectations and
limit on the amount of debt securities that may be issued.
financing in the term securitization markets, we intend to
Our goal is to maintain immediate cash availability, through renew each of the outstanding facilities as they expire. If we
overnight cash investments, and multiple sources of commit- are unable to renew one or more facilities, we will be unable to
ted funding facilities, in order to reduce our risks from sell new assets into those facilities, but the assets already
market volatility. We maintain multi-year bank facilities of held by those facilities will generally remain outstanding and
$7.5 billion, which include a $200 million facility to back stop the obligations will be repaid out of cash flows from the
international commercial paper. We also have committed assets.
international local bank lines of $496 million to support our

03.30230-Part2.qxp 3/6/08 1:20 PM Page 46
During 2007, we increased deposits at CIT Bank, a Utah indus- loans to funding commercial loans and have recently started
trial bank, by approximately $0.4 billion to $2.7 billion. We are originating corporate loans in the Bank. Our goal is to
continuing to execute on our liquidity risk management plan to increase further our total funding base from deposits.
broaden our funding sources and decrease our reliance on the
If difficult market conditions persist, we will continue to limit
capital markets. At December 31, 2007, the bank’s cash and
asset growth, finance our business principally with asset-
short-term investments was approximately $2 billion, which is
backed issuances and fund certain commercial loans in our
available solely for the bank’s funding and investing require-
bank.
ments pursuant to the bank’s charter. We intend to redeploy
this cash during 2008 by originating certain commercial We also target and monitor certain liquidity metrics to ensure
assets through the bank. During the final quarter of 2007 we both a balanced liability profile and adequate alternate liquid-
initiated this transition strategy from funding consumer type ity availability as outlined in the following table:
LIQUIDITY MEASUREMENTS
December 31,
__________________________________________________________
Current Target
______________________________ 2007
_________________________ 2006
_________________________
Commercial paper to total debt Maximum of 15% 4% 9%
Short-term debt to total debt Maximum of 35% 17% 24%
Bank lines to commercial paper Minimum of 100% 285% 148%
Aggregate alternate liquidity * to short-term debt Minimum of 100% 134% 125%
* Aggregate alternate liquidity includes available bank facilities, asset-backed facilities and cash.
The changes in the table above from 2006 reflect the reduction Our credit ratings are an important factor in meeting our
PAGE 46
in commercial paper borrowing in 2007. earnings and net finance revenue targets as better ratings
generally correlate to lower cost of funds and broader market
access. Below is a summary of our credit ratings.
CREDIT RATINGS
Short-Term
_________________________ Long-Term
_________________________ Outlook
_________________________
DBRS R-1L A Stable
Fitch F1 A Positive
Moody’s P-1 A2 Negative
Standard & Poor’s A-1 A Stable
The credit ratings stated above are not a recommendation to negative pledge provision that limits the granting or permit-
buy, sell or hold securities and may be subject to revision or ting of liens on the assets owned by the holding company. In
withdrawal by the assigning rating organization. Each rating addition, our credit agreements also contain a requirement
should be evaluated independently of any other rating. that CIT maintain a minimum net worth of $4.0 billion. See
Note 25 for consolidating financial statements of CIT Group
Our unsecured notes are issued under indentures containing
Inc. (the holding company) and other subsidiaries.
certain covenants and restrictions on CIT. Among the
covenants, which also apply to our credit agreements, is a
The following tables summarize significant contractual payments and projected cash collections, and contractual commitments at
December 31, 2007:
Payments and Collections by Year(1) (dollars in millions)
Total
________________ 2008
________________ 2009
________________ 2010
________________ 2011
________________ 2012+
________________
Commercial Paper $ 2,822.3 $ 2,822.3 – – – –
Deposits 2,745.8 1,397.1 729.1 335.5 124.8 159.3
Variable-rate senior unsecured notes 19,888.2 7,377.0 5,956.4 1,918.8 2,238.6 2,397.4
Fixed-rate senior unsecured notes 29,477.6 2,730.5 1,785.9 3,346.3 3,787.2 17,827.7
Non-recourse, secured borrowings(6) 17,430.3 2,546.4 1,154.4 781.8 640.3 12,307.4
Junior subordinated notes and convertible debt 1,440.0 – – – – 1.440.0
Credit balances of factoring clients 4,542.2 4,542.2 – – – –
Lease rental expense 399.4
________________ 46.5
________________ 39.4
________________ 33.8
________________ 31.8
________________ 247.9
________________
Total contractual payments 78,745.8
________________ 21,462.0
________________ 9,665.2
________________ 6,416.2
________________ 6,822.7
________________ 34,379.7
________________
Finance receivables(2)(6) 62,536.5 13,972.6 6,560.1 5,950.7 5,679.1 30,374.0
Operating lease rental income(3) 6,341.0 1,771.6 1,403.5 1,008.7 704.4 1,452.8
Finance receivables held for sale (4) 1,606.0 1,606.0 – – – –
Cash – current balance(5) 6,792.3 6,792.3 – – – –
Retained interests in securitizations 1,289.9
________________ 598.8
________________ 277.9
________________ 108.5
________________ 58.5
________________ 246.2
________________
Total projected cash collections 78,565.7
________________ 24,741.3
________________ 8,241.5
________________ 7,067.9
________________ 6,442.0
________________ 32,073.0
________________
Net projected cash collections (payments) $________________
(180.1) $ 3,279.3
________________ $(1,423.7)
________________ $ 651.7
________________ $ (380.7)
________________ $________________
(2,306.7)
________________ ________________ ________________ ________________ ________v_______ ________________
(1) Projected proceeds from the sale of operating lease equipment, interest revenue from finance receivables, debt interest expense and other
PAGE 47
items are excluded. Obligations relating to postretirement programs are also excluded.
(2) Based upon carrying value before credit reserves, including unearned discount; amount could differ due to prepayments, extensions of credit,
charge-offs and other factors.
(3) Rental income balances include payments from lessees on sale-leaseback equipment. See related CIT payment in schedule below.
(4) Based upon management’s intent to sell rather than contractual maturities of underlying assets.
(5) Includes approximately $2 billion of cash and short-term investments held at our Utah bank, which is only available to meet the bank’s funding
requirements.
(6) Non-recourse secured borrowings is generally repaid in conjunction with receipt of payment on the pledged receivables. For student lending
receivables, due to certain reporting limitations, the scheduled repayment of both the receivable and borrowing includes a prepayment com-
ponent.
Commitment Expiration by Year (dollars in millions)

Total
________________ 2008
________________ 2009
________________ 2010
________________ 2011
________________ 2012+
________________
Credit extensions $13,062.6 $2,059.3 $1,012.0 $1,881.4 $1,965.8 $ 6,144.1
Aircraft purchases 7,222.0 1,408.0 896.0 1,173.0 1,098.0 2,647.0
Letters of credit 1,109.5 872.8 84.5 46.5 26.1 79.6
Sale-leaseback payments 1,925.9 140.9 141.4 142.6 147.9 1,353.1
Manufacturer purchase commitments 735.5 653.5 82.0 – – –
Guarantees, acceptances and
other recourse obligations 232.3 218.9 – – 2.8 10.6
Liabilities for unrecognized tax obligations(1) 223.1
________________ 20.0
________________ 203.1
________________ –
________________ –
________________ –
________________
Total contractual commitments $24,510.9
________________ $5,373.4
________________ $2,419.0
________________ $3,243.5
________________ $3,240.6
________________ $10,234.4
________________
________________ ________________ ________________ ________________ ________________ ________________
(1) The balance can not be reasonably estimated past 2008, therefore the remaining balance is reflected in 2009. Expiration amounts include non-
cash liability reversals for statute of limitation period expirations. See Income Taxes section for discussion of unrecognized tax obligations.
See Item 8. Financial Statements and Supplementary Data, Note 17 – Commitments and Contingencies for additional information regarding
commitments.

03.30230-Part2.qxp 3/6/08 1:20 PM Page 48
INTEREST RATE AND FOREIGN EXCHANGE An immediate hypothetical 100 basis point increase in the
RISK MANAGEMENT yield curve on January 1, 2008 would reduce our net income by
Interest Rate Risk Management We monitor our interest rate an estimated $10 million after-tax over the next twelve
sensitivity on a regular basis by analyzing the impact of inter- months. A corresponding decrease in the yield curve would
est rate changes upon the financial performance of the cause an increase in our net income of a like amount. A 100
business. We also consider factors such as the strength of the basis point increase in the yield curve on January 1, 2007
economy, customer prepayment behavior and re-pricing char- would have reduced our net income by an estimated $5 million
acteristics of our assets and liabilities. after tax, while a corresponding decrease in the yield curve
would have increased our net income by a like amount.
We evaluate and monitor risk through two primary metrics:
The second interest rate modeling technique (VAR) that we
_ Margin at Risk (MAR), which measures the impact of employ is focused on the net economic value of the firm by
changing interest rates upon interest income over the sub- modeling the current market value of assets, liabilities and
sequent twelve months. derivatives, to determine our market value baseline. Once the
_ Value at Risk (VAR), which measures the net economic baseline market value is calculated, we raise market interest
value of assets by assessing the market value of assets, rates 100 basis points across the entire yield curve, and new
liabilities and derivatives. market values are estimated. By modeling the economic value
We regularly monitor and simulate our degree of interest rate of the portfolio we are able to understand how the economic
sensitivity by measuring the characteristics of interest-sensi- value of the balance sheet would change under specific inter-
tive assets, liabilities, and derivatives. The Capital Committee est rate scenarios.
reviews the results of this modeling periodically. An immediate hypothetical 100 basis point increase in the yield
The first interest rate sensitivity modeling technique (MAR) curve on January 1, 2008 would increase our economic value by
that we employ includes the creation of prospective twelve- $233 million before income taxes. A 100 basis point increase in
month baseline and rate shocked net interest income the yield curve on January 1, 2007 would have increased our
simulations. At the date that we model interest rate sensitivity, economic value by $287 million before income taxes.
we derive the baseline net interest income considering the Although we believe that these measurements provide an esti-
PAGE 48
current level of interest-sensitive assets, the current level of mate of our interest rate sensitivity, they do not account for
interest-sensitive liabilities, and the current level of deriva- potential changes in the credit quality, size, composition, and
tives. Our baseline simulation assumes that, over the next prepayment characteristics of our balance sheet, nor do they
successive twelve months, market interest rates (as of the account for other business developments that could affect our
date of our simulation) are held constant and that the compo- net income or for management actions that could be taken.
sition of assets and liabilities and interest sensitivities remain Accordingly, we can give no assurance that actual results
unchanged. Once we calculate the baseline net interest
would not differ materially from the estimated outcomes of

income, we instantaneously raise market interest rates, which our simulations. Further, such simulations do not represent
we previously held constant, 100 basis points across the entire our current view of future market interest rate movements.
yield curve, and a rate shocked simulation is run in which all
interest rate sensitive assets, liabilities and derivatives are A comparative analysis of the weighted average principal out-
immediately reset. We then measure interest rate sensitivity standing and interest rates on our debt before and after the
as the difference between the calculated baseline and the rate effect of interest rate swaps is shown on the following table.
shocked net interest income.
(dollars in millions)
Before Swaps
___________________________________ After Swaps
_____________________________________
For the year ended December 31, 2007
Commercial paper, variable-rate senior notes and secured borrowings $35,924.3 5.54% $37,212.0 5.64%
Fixed-rate senior and subordinated notes and deposits 32,430.7
________________ 5.51% 31,143.0
________________ 5.57%
Composite $68,355.0
________________ 5.51% $68,355.0
________________ 5.61%
________________ ________________
________________ 5.69% 23,107.6
________________ 5.73%
Composite $52,640.3
________________ 5.41% $52,640.3
________________ 5.45%
________________ ________________
________________ 5.33% 18,961.1
________________ 5.14%
Composite $43,186.3
________________ 4.48% $43,186.3
________________ 4.43%
________________ ________________
03.30230-Part2.qxp 3/6/08 1:20 PM Page 49
The weighted average interest rates before swaps do not nec- sponding notional principal amount and maturity) to manage
essarily reflect the interest expense that we would have liquidity and reduce interest rate risk at a lower overall fund-
incurred over the life of the borrowings had we managed the ing cost than could be achieved by solely issuing debt.
interest rate risk without the use of such swaps.
As part of managing exposure to interest rate, foreign cur-
We offer a variety of financing products to our customers, rency, and, in limited instances, credit risk, CIT, as an
including fixed and variable-rate loans of various maturities end-user, enters into various derivative transactions, all of
and currency denominations, and a variety of leases, including which are transacted in over-the-counter markets with other
operating leases. Changes in market interest rates, relation- financial institutions acting as principal counterparties.
ships between short-term and long-term market interest Derivatives are utilized to eliminate or mitigate economic risk,
rates, or relationships between different interest rate indices and our policy prohibits entering into derivative financial
(i.e., basis risk) can affect the interest rates charged on inter- instruments for speculative purposes. To ensure both appro-
est-earning assets differently than the interest rates paid on priate use as a hedge and to achieve hedge accounting
interest-bearing liabilities, and can result in an increase in treatment, whenever possible, substantially all derivatives
interest expense relative to finance income. We measure our entered into are designated according to a hedge objective
asset/liability position in economic terms through duration against a specific or forecasted liability or, in limited instances,
measures and sensitivity analysis, and we measure the effect assets. The notional amounts, rates, indices, and maturities of
on earnings using maturity gap analysis. Our asset portfolio is our derivatives closely match the related terms of the underly-
generally comprised of loans and leases of short to intermedi- ing hedged items.
ate term. As such, the duration of our asset portfolio is
CIT utilizes interest rate swaps to exchange variable-rate
generally less than three years. We target to closely match the
interest underlying forecasted issuances of commercial paper,
duration of our liability portfolio with that of our asset portfo-
specific variable-rate debt instruments, and, in limited
lio. As of December 31, 2007, our liability portfolio duration
instances, variable-rate assets for fixed-rate amounts. These
was slightly longer than our asset portfolio duration.
interest rate swaps are designated as cash flow hedges and
A matched asset/liability position is generally achieved changes in fair value of these swaps, to the extent they are
through a combination of financial instruments, including effective as a hedge, are recorded in other comprehensive
PAGE 49
commercial paper, deposits, medium-term notes, long-term income. Ineffective amounts are recorded in interest expense.
debt, interest rate and currency swaps, foreign exchange con- Interest rate swaps are also utilized to effectively convert
tracts, and through securitization. We do not speculate on fixed-rate interest on specific debt instruments to variable-
interest rates or foreign exchange rates, but rather seek to rate amounts. These interest rate swaps are designated as
mitigate the possible impact of such rate fluctuations encoun- fair value hedges and changes in fair value of these swaps are
tered in the normal course of business. This process is effectively recorded as an adjustment to the carrying value of
ongoing due to prepayments, refinancings and actual pay- the hedged item, and the offsetting changes in fair value of the
ments varying from contractual terms, as well as other swaps and the hedged items are recorded in earnings.
portfolio dynamics.
The following table summarizes the composition of our inter-
We periodically enter into structured financings (involving the est rate sensitive assets and liabilities before and after swaps:
issuance of both debt and an interest rate swap with corre-
Before Swaps
___________________________________________________ After Swaps
___________________________________________________
Fixed rate
__________________ Floating rate
_______________________ Fixed rate
__________________ Floating rate
_______________________
December 31, 2007
Assets 50% 50% 50% 50%
Liabilities 50% 50% 48% 52%
December 31, 2006
Assets 51% 49% 51% 49%
Liabilities 55% 45% 50% 50%
Total interest sensitive assets were $72.6 billion and $64.1 bil- Foreign Exchange Risk Management – To the extent local for-
lion at December 31, 2007 and 2006. Total interest sensitive eign currency borrowings are not raised, CIT utilizes foreign
liabilities were $65.3 billion and $57.1 billion at December 31, currency exchange forward contracts to hedge or mitigate
2007 and 2006. currency risk underlying foreign currency loans to subsidiaries

03.30230-Part2.qxp 3/6/08 1:20 PM Page 50
and the net investments in foreign operations. These contracts center financial institutions rated investment grade by nation-
are designated as foreign currency cash flow hedges or net ally recognized rating agencies, with the majority of our
investment hedges and changes in fair value of these con- counterparties rated “AA” or better. Credit exposures are
tracts are recorded in other comprehensive income along with measured based on the current market value and potential
the translation gains and losses on the underlying hedged future exposure of outstanding derivative instruments.
items. Translation gains and losses of the underlying foreign Exposures are calculated for each derivative contract and are
net investment, as well as offsetting derivative gains and aggregated by counterparty to monitor credit exposure.
losses on designated hedges, are reflected in other compre-
hensive income in the Consolidated Balance Sheet. CREDIT RISK MANAGEMENT
CIT also utilizes cross-currency swaps to hedge currency risk We review and monitor credit exposures, both owned and
underlying foreign currency debt and selected foreign cur- managed, on an ongoing basis to identify, as early as possible,
rency assets. The swaps that meet hedge accounting criteria customers that may be experiencing declining creditworthi-
are designated as foreign currency cash flow hedges or for- ness or financial difficulty, and periodically evaluate the
eign currency fair value hedges and changes in fair value of performance of our finance receivables across the entire
these contracts are recorded in other comprehensive income organization. We monitor concentrations by borrower, industry,
(for cash flow hedges), or effectively as a basis adjustment geographic region and equipment type, and we set or modify
(including the impact of the offsetting adjustment to the carry- exposure limits as conditions warrant, to minimize credit con-
ing value of the hedged item) to the hedged item (for fair value centrations and the risk of substantial credit loss. We have
hedges) along with the transaction gains and losses on the maintained a standard practice of reviewing our aerospace
underlying hedged items. CIT also has certain cross-currency portfolio regularly and, in accordance with SFAS No. 13 and
swaps that economically hedge exposures, but do not qualify SFAS No. 144, we test for asset impairment based upon pro-
for hedge accounting treatment. jected cash flows and relevant market data with any
impairment in value charged to earnings.
Other Market Risk Management – CIT has entered into credit
default swaps to economically hedge certain CIT credit expo- We have formal underwriting policies and procedures to eval-
sures. These swaps do not meet the requirements for hedge uate financing and leasing assets for credit and collateral risk
PAGE 50
accounting treatment and, therefore, are recorded at fair during the credit granting process and periodically after the
value, with both realized and unrealized gains and losses advancement of funds. These guidelines set forth our under-
recorded in other revenue in the Consolidated Statement of writing parameters based on: (1) Target Market Definitions,
Income. See Note 10 - Derivative Financial Instruments for which delineate the markets, industries, geographies and
further discussion, including notional principal balances of products that our businesses are permitted to target, and (2)
interest rate swaps, foreign currency exchange forward con- Risk Acceptance Criteria, which details acceptable transaction
tracts, cross-currency swaps, credit default swaps and other structures, credit profiles and required risk-adjusted returns.
derivative contracts. We have enhanced our credit risk management process by

implementing a two-tier risk metrics system to capture and
DERIVATIVE RISK MANAGEMENT analyze credit risk based on probability of obligor default and
We enter into interest rate and currency swaps, foreign loss given default. Probability of default is determined by eval-
exchange forward contracts, and in limited instances, credit uating the borrower creditworthiness including analyzing
default swaps as part of our overall risk management prac- credit history, financial condition, cash flow adequacy, financial
tices. We assess and manage the external and internal risks performance and management quality. Loss given default rat-
associated with these derivative instruments in accordance ings, which estimate the loss if an account goes into default,
with the overall operating goals established by our Capital are predicated on transaction structure, collateral valuation
Committee. External risk is defined as those risks outside of and related guarantees (including recourse from manufactur-
our direct control, including counterparty credit risk, liquidity ers, dealers or governments).
risk, systemic risk, legal risk and market risk. Internal risk
We implemented processes and systems to drive risk-based
relates to those operational risks within the management
pricing models to the individual transaction level based on the
oversight structure and includes actions taken in contraven-
aforementioned credit metrics to ensure that transactions meet
tion of CIT policy.
acceptable risk-adjusted return criteria. Each of our business
The primary external risk of derivative instruments is counter- units developed and implemented a formal credit management
party credit exposure, which is defined as the ability of a process customized to the products/services they offer, the
counterparty to perform its financial obligations under a deriv- clients they serve and the industries in which they operate.
ative contract. We control the credit risk of our derivative
CIT has entered into a limited number of credit default swaps
agreements through counterparty credit approvals, pre-estab-
to economically hedge certain CIT credit exposures. Also, we
lished exposure limits and monitoring procedures.
have executed offsetting derivative transactions with financial
The Capital Committee, in conjunction with Corporate Risk institutions and our customers as a service to our customers
Management, approves each counterparty and establishes in order to mitigate their respective interest rate and currency
exposure limits based on credit analysis and market value. All risks. The counter party credit exposure related to these
derivative agreements are entered into with major money
03.30230-Part2.qxp 3/6/08 1:20 PM Page 51
transactions is monitored and evaluated in conjunction with residual value at transaction inception; 2) systematic residual
our normal underwriting policies and procedures. reviews; and 3) monitoring of residual realizations. Reviews for
See Item 8. Financial Statements and Supplementary Data, impairment are performed at least annually. Residual realiza-
Note 10 – Derivative Financial Instruments for additional tions, by business unit and product, are reviewed as part of our
information. ongoing financial and asset quality review, both within the
business units and by senior management.
Commercial Lending and Leasing The commercial credit man-
agement process begins with the initial evaluation of credit Portfolio Analytics
risk and underlying collateral at the time of origination and We monitor concentrations by borrower, industry, geographic
continues over the life of the finance receivable or operating region and equipment type, and we set or modify exposure limits
lease, including collecting past due balances and liquidating as conditions warrant, to minimize credit concentrations and the
underlying collateral. Credit personnel review a potential risk of substantial credit loss. Owned and managed credit expo-
borrower’s financial condition, results of operations, manage- sures are reviewed on an ongoing basis to identify sectors of the
ment, industry, customer base, operations, collateral and economy that may be experiencing declining creditworthiness or
other data, such as third party credit reports, to thoroughly financial difficulty as soon as possible and underwriting criteria
evaluate the customer’s borrowing and repayment ability. and risk tolerances are adjusted accordingly.
Transactions are graded according to the two-tier risk metrics
We continue to advance our capital allocation disciplines
system described above. Credit facilities are subject to
through the implementation of processes and systems,
approval within our overall credit approval and underwriting
which will drive risk-based equity allocations down to the
guidelines and are issued commensurate with the credit eval-
transaction level and stress test loss scenarios. We expanded
uation performed on each borrower.
our proactive portfolio management activities to place greater
Consumer and Small Ticket Lending and Leasing For consumer emphasis on whole loan sales and syndications and broad-
transactions and certain small-ticket lending and leasing ened our risk mitigation techniques to include risk-sharing
transactions, we employ proprietary automated credit scoring arrangements, credit insurance and credit derivatives.
models by loan type. The complex statistical models and algo- Additionally, we have migrated our credit data files to a cen-
rithms are developed, tested and maintained in-house by our tralized credit manager system, which will further our
PAGE 51
credit risk management sciences group. The models empha- portfolio analytical capabilities and allow us to analyze cross
size, among other things, occupancy status, length of industry and cross border performance correlations.
residence, employment, debt to income ratio (ratio of total
Supervision and Oversight
installment debt and housing expenses to gross monthly
income), bank account references, credit bureau information The Corporate Risk Management group, which reports to the
and combined loan to value ratio for consumers, while small Chief Risk Officer, oversees and manages credit and related risk
business models encompass financial performance metrics, throughout CIT. This group includes a Chief Credit Officer as well
length of time in business, industry category and geographic as Chief Investment Officers for each of the business segments.
location. The models are used to assess a potential borrower’s Our Executive Credit Committee includes the Chief Risk Officer
credit standing and repayment ability considering the value or and other members of the Corporate Risk Management group.
adequacy of property offered as collateral. We also utilize The committee approves transactions which exceed segment
external credit bureau scoring, behavioral models and judg- Investment Committee authorities or are otherwise outside of
established target market definitions or risk acceptance criteria.
ment in the credit adjudication and collection processes.
We regularly evaluate the consumer loan portfolio and the small The Corporate Risk Management group also includes an inde-
pendent credit audit function. The credit audit group reviews
ticket leasing portfolio using past due, vintage curve and other
the credit management processes at each business unit and
statistical tools to analyze trends and credit performance by
monitors compliance with established corporate policies. The
transaction type, including analysis of specific credit character-
credit audit group examines adherence with established credit
istics and other selected subsets of the portfolios. Adjustments
policies and procedures and tests for inappropriate credit prac-
to credit scorecards and lending programs are made when
tices, including whether potential problem accounts are being
deemed appropriate. Individual underwriters are assigned credit
detected and reported on a timely basis.
authority based upon their experience, performance and under-
standing of the underwriting policies and procedures of our CIT also maintains a standing Asset Quality Review Committee,
consumer and small-ticket leasing operations. A credit approval which is charged with reviewing aggregate portfolio performance,
hierarchy also exists to ensure that an underwriter with the including the status of individual financing and leasing assets,
appropriate level of authority reviews all applications. owned and managed, to obligors with higher risk profiles. The
committee is comprised of members of senior management,
As discussed in Profitability and Key Business Trends and
including the Chief Credit and Risk Officer, the Vice Chairman and
Concentrations, in 2007, we ceased originating home lending Chief Financial Officer, the Controller and the Director of Credit
receivables and private student loans. Audit and meets with senior business unit executives to under-
stand portfolio performance dynamics. This committee also
EQUIPMENT/RESIDUAL RISK MANAGEMENT
periodically meets with the Chief Executive Officer of CIT to review
We have developed systems, processes and expertise to man- overall credit risk, including geographic, industry and customer
age the equipment and residual risk in our leasing concentrations, and the reserve for credit losses.
businesses. Our process consists of the following: 1) setting

03.30230-Part2.qxp 3/6/08 1:20 PM Page 52
INTERNAL CONTROLS
The Internal Controls Committee is responsible for monitoring chaired by the Controller, includes the Vice Chairman and
and improving internal controls and overseeing the internal Chief Financial Officer, the Director of Internal Audit and other
controls attestation mandated by Section 404 of the Sarbanes- senior executives in finance, legal, risk management and
Oxley Act of 2002 (“SARBOX”). The committee, which is information technology.
OFF-BALANCE SHEET ARRANGEMENTS

Securitization Program public and private asset-backed securitization markets.
We fund asset originations on our balance sheet by accessing Current products in these programs include receivables and
various sectors of the capital markets, including the term debt leases secured by equipment and small business lending
and commercial paper markets. In an effort to broaden funding receivables, as well as consumer loans secured by residential
sources and provide an additional source of liquidity, we use an real estate, manufactured housing and other assets. The fol-
array of securitization programs, including both asset-backed lowing table summarizes data relating to our securitization
commercial paper and term structures, to access both the programs.
Off-balance Sheet Securitized Assets at or for the years ended December 31 (dollars in millions)
2007
______________ 2006
______________ 2005
______________
Securitized Assets:
Vendor Finance $4,104.0 $3,850.9 $3,646.7
Corporate Finance 1,526.7 1,568.7 2,525.3
PAGE 52
Home Lending (1) 680.5

______________ 841.7
______________ 1,113.7
______________
Total securitized assets $6,311.2
______________ $6,261.3
______________ $7,285.7
______________
______________ ______________ ______________
Securitized assets as a % of managed assets 7.6%
______________ 8.4%
______________ 11.6%
______________
______________ ______________ ______________
Volume Securitized:
Vendor Finance $3,447.4 $3,324.1 $3,230.9
Corporate Finance 750.4

______________ 321.9
______________ 1,089.6
______________
Total volume securitized $4,197.8
______________ $3,646.0
______________ $4,320.5
______________
______________ ______________ ______________
(1) Includes manufactured housing and other assets of approximately $157 million, $207 million and $275 million at December 31, 2007, 2006
and 2005.
In a typical asset-backed securitization, we sell a “pool” of securitization, we estimate the “residual” cash flows to be
secured loans or leases to a special-purpose entity (SPE), typ- received over the life of the securitization, record the present
ically a trust. SPEs are used to achieve “true sale” value of these cash flows as a retained interest in the securiti-
requirements for these transactions in accordance with SFAS zation (retained interests can include bonds issued by the
No. 140, “Accounting for Transfers and Servicing of Financial SPE, cash reserve accounts on deposit in the SPE or interest
Assets and Extinguishment of Liabilities” (“SFAS 140”). The only receivables) and typically recognize a gain. Assets securi-
SPE, in turn, issues certificates and/or notes that are collater- tized are shown in our managed assets and our capitalization
alized by the pool and entitle the holders thereof to participate ratios on a managed basis.
in certain pool cash flows.
In estimating residual cash flows and the value of the retained
Accordingly, CIT has no legal obligation to repay the securities interests, we make a variety of financial assumptions, includ-
in the event of a default by the SPE. CIT retains the servicing ing pool credit losses, prepayment speeds and discount rates.
rights of the securitized contracts, for which we earn periodic These assumptions are supported by both our historical
or “on going” servicing fees. We also participate in certain experience and anticipated trends relative to the particular
“residual” cash flows (cash flows after payment of principal products securitized. Subsequent to recording the retained
and interest to certificate and/or note holders, servicing fees interests, we review them quarterly for impairment based on
and other credit-related disbursements). At the date of estimated fair value. These reviews are performed on a
03.30230-Part2.qxp 3/6/08 1:20 PM Page 53
disaggregated basis. Fair values of retained interests are esti- Joint Venture Activities
mated utilizing current pool demographics, actual We utilize joint ventures organized through distinct legal enti-
note/certificate outstandings, current and anticipated credit ties to conduct financing activities with certain strategic
losses, prepayment speeds and discount rates. vendor partners. Receivables are originated by the joint ven-
Our retained interests had a carrying value at December 31, ture and purchased by CIT. The vendor partner and CIT jointly
2007 of $1,289.9 million. Retained interests are subject to own these distinct legal entities, and there is no third-party
credit and prepayment risk. As of December 31, 2007, approxi- debt involved. These arrangements are accounted for using
mately 72% of our outstanding securitization pool balances the equity method, with profits and losses distributed accord-
are in conduit structures. Securitized assets are subject to the ing to the joint venture agreement. See disclosure in Note 20 –
same credit granting and monitoring processes which are Certain Relationships and Related Transactions. The
described in the “Credit Risk Management” section. See Note 6 Company sold our interest in Dell Financial Services. See
– Retained Interests in Securitizations and Other Investments for disclosure in Management’s Discussion and Analysis –
detail on balance and key assumptions. Acquisitions and Dispositions.
SECURED BORROWINGS AND ON-BALANCE SHEET SECURITIZATION TRANSACTIONS

As discussed in Liquidity Risk Management, capital markets equipment loans and leases. These transactions do not meet
volatility in the second half of 2007 caused us to reduce our the accounting (SFAS 140) requirements for sales treatment
dependency upon the unsecured debt and commercial paper and are therefore recorded as non-recourse secured borrow-
markets, and satisfy a higher proportion of our funding ings, with the proceeds reflected in Non-recourse, secured
requirements through the asset-backed markets than we borrowings in the Consolidated Balance Sheet. Certain cash
have historically. In addition to the off-balance sheet securiti- balances are restricted in conjunction with the student lending
zation transactions previously discussed, we raised borrowings.
approximately $13.5 billion of proceeds during the year from
The following table summarizes the assets pledged / encum-
PAGE 53
on-balance sheet financings including: $5.1 billion secured by
bered and the related secured borrowings. Amounts do not
home loans, $5.5 billion secured by student loans, $1.3 billion
include non-recourse borrowings related to leveraged lease
secured by factoring receivables and $1.6 billion secured by
transactions.
Balances as of December 31, (dollars in millions)

2007
__________________________________________________ 2006
_________________________________________________
Assets Secured Assets Secured
Pledged
____________________ Borrowing
________________________ Pledged
____________________ Borrowing
_______________________
Consumer (student lending) $9,079.4 $9,437.5 $4,031.1 $4,118.0
Home lending 7,074.3 4,785.9 – –
Trade Finance (factoring receivable) (1) 5,279.7 1,262.5 – –
Vendor Finance (acquisition financing) 1,491.3 1,312.3 – –
Corporate Finance (2) 632.1
________________ 632.1
________________ 280.5
______________ 280.5
______________
Total $23,556.8
________________ $17,430.3
________________ $4,311.6
______________ $4,398.5
______________
________________ ________________ ______________ ______________
(1) Excludes credit balances of factoring clients.
(2) Includes a secured borrowing related to an energy finance project and financing (related to $262 million of commercial loans) executed via
total return swap, under which CIT retains control of, and the full risk related to, these loans.

03.30230-Part2.qxp 3/6/08 1:20 PM Page 54
CAPITALIZATION
Capital Structure as of December 31 (dollars in millions)
2007
_________________ 2006
_________________ 2005
_________________
Common stockholders’ equity $ 6,460.6 $ 7,251.1 $ 6,462.7
Preferred stock(1) 500.0 500.0 500.0
Junior subordinated notes 750.0 – –
Mandatory convertible debt(2) 690.0 – –
Preferred capital securities(3) –
________________ 250.3
________________ 252.0
________________
Total Capital 8,400.6 8,001.4 7,214.7
Senior unsecured debt 52,188.1 53,656.4 43,301.8
Non-recourse, secured borrowings(4) 17,430.3 4,398.5 4,048.8
Deposits 2,745.8
________________ 2,399.6
________________ 261.9
________________
Total Capitalization $80,764.8
________________
________________ $68,455.9
________________
________________ $54,827.2
________________
________________
Goodwill and other intangible assets (1,152.5) (1,008.4) (1,011.5)
Equity Adjustments 88.8 (52.6) (44.6)
Total Tangible Common Equity 5,396.9 6,190.1 5,406.6
Total Tangible Capital 7,336.9 6,940.4 6,158.6
Total Tangible Capitalization 79,701.1 67,394.9 53,771.1
Book value per common share $34.48 $36.30 $32.23
Tangible book value per common share $28.42 $31.22 $27.15
PAGE 54
Tangible capital to managed assets 8.82% 9.36% 9.80%

(1) During 2005, CIT issued $500 million aggregate amount of Series A and Series B preferred equity securities. Series A has a stated value of
$350 million, comprised of 14 million shares of 6.35% non-cumulative fixed rate preferred stock, with a liquidation value of $25 per share.
Series B has a stated value of $150 million, comprised of 1.5 million shares of 5.189% non-cumulative adjustable rate preferred stock, with a
liquidation value of $100 per share. See Note 11 – Stockholders’ Equity for further detail on preferred stock.
(2) During 2007, the Company sold 24 million equity units with a stated amount of $25.00 for a total stated amount of $600 million. These securi-
ties convert to common stock no later than November 17, 2010 at a maximum price of $42.00, which represents a premium of approximately
20% over the closing price of CIT’s common stock of $34.98 on October 17, 2007. The equity units carry a total distribution rate of 7.75%. On
October 29, 2007, the underwriters exercised the option to purchase 3.6 million additional equity units, or an additional stated amount of $90
million, to cover over-allotments. The equity units initially consist of a contract to purchase CIT common stock and a 2.5% beneficial owner-
ship interest in a $1,000 principal amount senior note due November 15, 2015.
(3) The preferred capital securities were 7.70% Preferred Capital Securities issued in 1997 by CIT Capital Trust I, a wholly-owned subsidiary. CIT
Capital Trust I invested the proceeds of that issue in Junior Subordinated Debentures of CIT having identical rates and payment dates.
Consistent with rating agency measurements, preferred capital securities were included in tangible capital in our leverage ratios. See “Non-
GAAP Financial Measurements” for additional information.
(4) See “On-balance Sheet Securitization Transactions” section for detail.
We employ a comprehensive capital allocation framework to Based upon our capital allocation framework and associated
determine our capital requirements. Our capital assessments portfolio mix, including a greater proportion of U.S.
address credit, operational and market risks, with capital Government guaranteed student loans, we determined a capi-
assigned to cover each of these risks. Credit risk comprises tal ratio target, defined as Tangible Capital to Managed Assets,
the largest component of required capital and is assessed uti- of approximately 8.5%.
lizing our credit risk management systems, which capture
The Tangible Capital to Managed Assets ratio of 8.82% at
probabilities of default and loss given default for each obligor
December 31, 2007 was impacted by the valuation adjustment
within our sub-portfolios. The result is a capital allocation for
of the home lending portfolio that resulted in a reduction of
each sub-portfolio ranging from student lending at the low
the carrying value of the assets and commensurate reduction
end to aerospace leasing at the high end.
in capital.
03.30230-Part2.qxp 3/6/08 1:20 PM Page 55
Capital and Funding stock for an aggregate purchase price of approximately $8

CIT has certain preferred stock and junior subordinated notes million. As a result, the Company satisfied the conditions nec-
outstanding. The terms of these securities restrict us from essary to permit the declaration and payment of preferred
declaring dividends or paying interest on the securities, as stock dividends for these periods.
applicable, if, among other things, our average four quarters On October 16, 2007, CIT Group Inc. entered into a forward
fixed charge ratio is less than 1.10, or if our tangible capital to equity commitment agreement with Morgan Stanley & Co.
managed asset ratio is less than 5.50%. In addition, if we do Incorporated and Citigroup Global Markets Inc. Pursuant to
not pay dividends or interest on such securities, we are also the agreement, Morgan Stanley and Citigroup severally com-
prohibited from paying dividends on our common stock. Our mitted to purchase shares of common stock issued by CIT in
preferred stock and junior subordinated notes, provided, how- an aggregate amount of up to $80 million, subject to the con-
ever that we may pay dividends and interest on those ditions set forth in the agreement. The commitment to
securities with any net proceeds that we have received from purchase the shares of common stock terminates on
the sale of common stock during specified time periods prior September 30, 2008. The purchase price per share of common
to the declaration of the dividend or the payment of interest. stock to be paid by Morgan Stanley and Citigroup will be equal
As a result of the valuation allowances taken in 2007 to mark to an amount from and including 95% to 100% of the lesser of
our home lending portfolio to the lower of cost or market, our (1) the volume weighted average price of the common stock
average four quarters fixed charge ratio fell below 1.10 for the during the final hour of trading on the New York Stock
third and fourth quarters. Therefore, the Board of Directors Exchange on the third trading day preceding the applicable
authorized the Company to issue and sell common stock in an purchase date and (2) the closing price of the common stock
amount sufficient to allow it to pay dividends and make inter- on the New York Stock Exchange on the third trading day pre-
est payments on the aforementioned securities. ceding the applicable purchase date. The $80 million is
On January 23, 2008, CIT Group Inc. entered into a Sales sufficient to cover interest and dividend payments on the
Agency Agreement with Morgan Stanley & Co. Incorporated Company’s junior subordinated notes and preferred stock
and Citigroup Global Markets Inc., pursuant to which CIT through September 30, 2008 if necessary.
agreed to sell shares of its common stock for an aggregate See “Liquidity Risk Management” for discussion of risks
PAGE 55
purchase price of up to $31.5 million. As a result, the impacting our liquidity and capitalization. See Exhibit 12.1 for
Company sold 1,281,519 shares on January 30, 2008. On the Computation of Ratios to Fixed Charges.
October 16, 2007, agreed to sell 235,800 shares of its common
CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with Reserve for Credit Losses – The reserve for credit losses is
GAAP requires management to use judgment in making esti- intended to provide for losses inherent in the portfolio, which
mates and assumptions that affect reported amounts of assets requires the application of estimates and significant judgment
and liabilities, the reported amounts of income and expense as to the ultimate outcome of collection efforts and realization
during the reporting period and the disclosure of contingent of collateral values, among other things. Therefore, changes
assets and liabilities at the date of the financial statements. in economic conditions or credit metrics, including past due
The following accounting estimates, which are based on rele- and non-performing accounts, or other events affecting spe-
vant information available at the end of each period, include cific obligors or industries may necessitate additions or
inherent risks and uncertainties related to judgments and reductions to the reserve for credit losses.
assumptions made by management. We consider the following
The reserve for credit losses is reviewed for adequacy based
accounting estimates to be critical in applying our accounting
on portfolio collateral values and credit quality indicators,
policies due to the existence of uncertainty at the time the esti-
including charge-off experience, levels of past due loans and
mate is made, the likelihood of changes in estimates from
non-performing assets, evaluation of portfolio diversification
period to period and the potential impact that these estimates
and concentration as well as economic conditions. We review
can have on the financial statements.
finance receivables periodically to determine the probability of
Management believes that the judgments and estimates uti- loss, and record charge-offs after considering such factors as
lized in the following critical accounting estimates are delinquencies, the financial condition of obligors, the value of
reasonable. We do not believe that different assumptions are underlying collateral, as well as third party credit enhance-
more likely than those utilized in the following critical ments such as guarantees and recourse from manufacturers.
accounting estimates, although actual events may differ from This information is reviewed formally on a quarterly basis with
such assumptions. Consequently, our estimates could prove senior management, including the CEO, CFO, Chief Risk
inaccurate, and we may be exposed to charges to earnings Officer and Controller, among others, in conjunction with set-
that could be material. ting the reserve for credit losses.

03.30230-Part2.qxp 3/6/08 1:20 PM Page 56
The reserve for credit losses is determined based on three key Notes 10, 6, and 16 for additional information regarding deriv-
components: (1) specific reserves for collateral dependent ative financial instruments, retained interests in
loans which are impaired, based upon the value of underlying securitizations and employee benefit obligations. Excluding
collateral or projected cash flows (2) reserves for estimated home lending, Financing and leasing assets held for sale
losses inherent in the portfolio based upon historical and pro- totaled $1,260.2 million at December 31, 2007. A hypothetical
jected charge-offs and (3) reserves for estimated losses 10% fluctuation in value of financing and leasing assets held
inherent in the portfolio based upon economic, estimation risk for sale equates to $0.41 in earnings per share.
and other factors. Historical loss rates are based on one to
We value home lending assets classified as held for sale at the
three-year averages, which are consistent with our portfolio life
lower of cost or estimated fair value (LOCOM), with current
and provide what we believe to be appropriate weighting to cur-
period earnings charged to the extent carrying value exceeds
rent loss rates. The process involves the use of estimates and a
estimated fair value. In the second quarter of 2007, as
high degree of management judgment. As of December 31,
described in Home Lending Business – Significant 2007
2007, the reserve for credit losses was $831.5 million or 1.33%
Events and Actions, we transferred our entire portfolio of
of finance receivables. A hypothetical 10% change to the
home lending assets from assets held for investment to
expected loss rates utilized in our reserve determination at
assets held for sale. In the third quarter of 2007, we trans-
December 31, 2007 equates to the variance of $77.9 million, or
ferred approximately $9.7 billion of home lending receivables
12 basis points (0.12%) in the percentage of reserves to finance
from assets held for sale to assets held for investment. These
receivables, and $0.25 in earnings per share. See Note 3 for
assets were transferred at LOCOM at the September 30, 2007
additional information regarding the reserve for credit losses.
transfer date. Under held for investment accounting these
Impaired Loans – Loan impairment is measured as any short- loans will not be subject to LOCOM accounting prospectively.
fall between the estimated value and the recorded investment The estimated fair value for approximately 78% of the $9.7 bil-
for those loans defined as impaired loans in the application of lion transferred to assets held for investment was based upon
SFAS 114. The estimated value is determined using the fair market prices for similar assets sold, with the remaining 22%
value of the collateral or other cash flows, if the loan is collat- based upon estimated fair value developed from discounted
eral dependent, or the present value of expected future cash cash flow models. At December 31, 2007, approximately $490
flows discounted at the loan’s effective interest rate. The million of home lending manufactured housing loans remain
PAGE 56
determination of impairment involves management’s judg- classified in held for sale, subject to prospective LOCOM
ment and the use of market and third party estimates accounting.
regarding collateral values. Valuations in the level of impaired
We estimate fair value based on observable market transac-
loans and corresponding impairment as defined under SFAS
tions for similar assets or other relevant observable market
114 affect the level of the reserve for credit losses. At
data when available. To the extent such relevant market data
December 31, 2007, the reserve for credit losses includes a
is unavailable to us, we estimate fair value based upon dis-
$52.1 million impairment valuation component. A 10% fluctu-

counted cash flow analysis (“DCF”).
ation in this valuation equates to $0.02 in earnings per share.
Valuations based on observable market transactions must be
Fair value determination – Selected assets and liabilities,
adjusted to develop a valid estimate of fair value for our portfo-
including derivatives, retained interests in securitizations and
lio, usually through the use of pricing sheets based on
net employee benefit obligations, are measured at estimated
similarities and differences between key characteristics of the
fair value in our financial statements. The carrying value of
respective loan pools. The use of pricing sheets to adjust the
certain other assets, such as financing and leasing assets
prices of observable market transactions to reflect the char-
held for sale, which are reflected in our financial statements
acteristics of our loan pools requires management to make
at the lower of cost or fair value, also are influenced by our
assumptions regarding the validity of using, the value of, and
determination of fair value.
the weight attributed to each component of the pricing sheets.
We determine market value in the following order: (1) compa- The prices for our portfolios, derived by adjusting for the dif-
rable market prices to the extent available; (2) internal ferences in our portfolio characteristics and each of the two
valuation models that utilize market data (observable inputs) market transactions in the 2007 third quarter, fell within a nar-
as input variables; and (3) internal valuation models that uti- row range (less than 40 basis points) of each other.
lize management’s assumptions about market participant
Valuations based on DCF modeling are most influenced by the
assumptions (unobservable inputs) to the extent (1) and (2) are
impact of estimated lifetime loan losses on the underlying
unavailable.
cash flows and the discount rates applied to the net cash
Derivative fair values are determined primarily via method (1). flows. Our valuation allowance contains uncertainties because
Financing and leasing assets held for sale fair values are DCF modeling requires management to make assumptions
determined largely via methods (1) and (2), while the fair value regarding future delinquency and home price trends as well as
of retained interests in securitizations and net employee bene- the frequency and severity of loss.
fit obligations are determined largely via method (3). See
03.30230-Part2.qxp 3/6/08 1:20 PM Page 57
With respect to the approximate $7.5 billion of loans trans- transactions) as the duration of an operating lease is shorter
ferred to held for investment at September 30, 2007, for which relative to the equipment useful life than a finance lease.
we utilized observable sales of similar assets to determine Management performs periodic reviews of the estimated
estimated fair value, the portfolio characteristics that most residual values, with non-temporary impairment recognized in
influenced the purchase price adjustments were the similari- the current period as an increase to depreciation expense for
ties and differences in weighted average coupon and loan to operating lease residual impairment, or as an adjustment to
value ratio among the two observable market transactions as yield for residual value adjustments on finance leases. Data
compared to our portfolios. In our fair value estimates, every regarding equipment values, including appraisals, and our
percentage point difference in the weighted average coupon historical residual realization experience are among the fac-
and loan to value ratio of each portfolio equated to 325 basis tors considered in evaluating estimated residual values. As of
points and 10 basis points in purchase price adjustments. December 31, 2006, our direct financing lease residual bal-
ance was $2.1 billion and our total operating lease equipment
With respect to the approximate $2.2 billion of loans trans-
balance, including estimated residual value at the end of the
ferred to held for investment at September 30, 2007, for which
lease term, was $12.6 billion. A hypothetical 10% fluctuation in
we utilized cash flow analysis to determine estimated fair
the total of these amounts equates to $4.77 in earnings per
value, the weighted average lifetime loss assumption was
share over the remaining life of the assets.
approximately 16% (with an underlying range among the pools
of 11% to 30%) and the weighted average discount rate utilized Goodwill and Intangible Assets – CIT adopted SFAS No. 142,
in the calculation was approximately 13.5% (with an underlying “Goodwill and Other Intangible Assets,” effective October 1,
range among the pools of 12.75% to 15%). A 10% deterioration 2001. The Company determined at October 1, 2001 that there
in the lifetime loss assumption would have increased the valu- was no impact of adopting this new standard under the transi-
ation allowance related to these loans at September 30, 2007 tion provisions of SFAS No. 142. Since adoption, goodwill is no
by approximately $30 million (1.5% of UPB) or $0.10 earnings longer amortized, but instead is assessed for impairment at
per share. A 100 basis point increase in the discount rate least annually. During this assessment, management relies on
applied to the related cash flows would have increased the val- a number of factors, including operating results, business
uation allowance related to these loans at September 30, 2007 plans, economic projections, anticipated future cash flows,
by approximately $45 million (2.0% of UPB) or $0.14 earnings and market place data.
PAGE 57
per share. In each of these sensitivity calculations the other
During the third quarter of 2007, legislation was passed with
variable is held constant. In reality, changes in one variable
respect to the student lending business. Among other things,
could result in changes in the other variable, which might mag-
the legislation reduced the maximum interest rates that can
nify or counteract the sensitivities. With respect to assets
be charged by lenders in connection with a variety of loan
remaining in assets held for sale at December 31, 2007, a 10%
products, increased loan origination fees paid to the govern-
deterioration in loss and discount rate assumptions would
ment by lenders, and reduced the lender guarantee
increase the corresponding valuation allowance by approxi-
percentage. During the fourth quarter of 2007, market valua-
mately $15 million (3.0% of UPB) or $0.05 earnings per share.
tions for student lending businesses declined further,
Retained Interests in Securitizations – Significant financial reflecting the failed the sale of a significant student lender, the
assumptions, including loan pool credit losses, prepayment market’s continued emerging view of the legislative changes
speeds and discount rates, are utilized to determine the fair and the general difficult environment for lenders in this sector,
values of retained interests, both at the date of the securitiza- including higher funding costs and credit deterioration in the
tion and in the subsequent quarterly valuations of retained industry. As a result, management performed an interim
interests. These assumptions reflect both the historical expe- impairment test in accordance with SFAS 142 for the goodwill
rience and anticipated trends relative to the products and intangible assets related to the student lending business
securitized. Any resulting losses, representing the excess of as of December 31, 2007 and determined an impairment
carrying value over estimated fair value that are other than charge of $312.1 million, representing the entire goodwill and
temporary, are recorded in current earnings. However, unreal- intangible asset balance, was required.
ized gains are reflected in stockholders’ equity as part of other
In addition to the above market events related to the student
comprehensive income. See Note 6 for additional information
lending business, the deterioration in the residential mort-
regarding securitization retained interests and related sensi-
gage lending market and disruption to the capital markets
tivity analysis.
continued in the fourth quarter of 2007, which contributed to a
Lease Residual Values – Operating lease equipment is carried decline the Company’s stock price. As a result, management
at cost less accumulated depreciation and is depreciated to performed the impairment test for the Corporate Finance,
estimated residual value using the straight-line method over Trade Finance and Vendor Finance segments as of December
the lease term or projected economic life of the asset. Direct 31, 2007. The fair value for these segments, which was deter-
financing leases are recorded at the aggregated future mini- mined based upon observable market valuation data,
mum lease payments plus estimated residual values less exceeded the corresponding segment book values.
unearned finance income. We generally bear greater risk Accordingly, management determined that no impairment
in operating lease transactions (versus finance lease charge for these three segments was required.

03.30230-Part2.qxp 3/6/08 1:20 PM Page 58
Intangible assets consist primarily of customer relationships Deferred tax assets and liabilities are recognized for the future
acquired with acquisitions, with amortization lives up to 20 tax consequences of transactions that have been reflected in
years, and computer software and related transaction the Consolidated Financial Statements. Our ability to realize
processes, which are being amortized over a 5-year life. An deferred tax assets is dependent on prospectively generating
evaluation of the remaining useful lives and the amortization taxable income by corresponding tax jurisdiction, and in
methodology of the intangible assets is performed periodically some cases on the timing and amount of specific types of
to determine if any change is warranted. future transactions. Management’s judgment regarding
uncertainties and the use of estimates and projections is
The Goodwill and Intangible Assets balance was $1,152.5 mil-
required in assessing our ability to realize net operating loss
lion at December 31, 2007. A hypothetical 10% fluctuation in
(“NOL’s”) and other tax benefit carry-forwards, as these assets
the value equates to $0.60 in earnings per share. See Note 23
expire at various dates beginning in 2008, and they may be
for additional information regarding the current year evalua-
subject to annual use limitations under the Internal Revenue
tion and impairment determination.
Code and other limitations under certain state laws.
FIN 48 Liabilities and Tax Reserves – We have open tax years in Management utilizes historical and projected data, budgets
the U.S. and Canada and other jurisdictions that are currently and business plans in making these estimates and assess-
under examination by the applicable taxing authorities, and ments. Deferred tax assets relating to NOL’s were $730.2
certain later tax years that may in the future be subject to million, net of valuation allowance, at December 31, 2007. A
examination. We periodically evaluate the adequacy of our hypothetical 10% fluctuation in the value of deferred tax
FIN 48 liabilities and tax reserves, taking into account our assets relating to NOL’s equates to $0.38 in earnings per
open tax return positions, tax assessments received, tax law share. See Note 15 for additional information regarding
changes and third party indemnifications. The process of eval- income taxes.
uating FIN 48 liabilities and tax reserves involves the use of
See Note 1 to the financial statements for a discussion of
estimates and a high degree of management judgment. The
recently issued accounting pronouncements.
final determination of tax audits could affect our tax reserves.
PAGE 58
NON-GAAP FINANCIAL MEASUREMENTS

The SEC adopted regulations that apply to any public disclo- including amounts, that are excluded from the most directly
sure or release of material information that includes a comparable measure so calculated and presented.
non-GAAP financial measure. The accompanying
Non-GAAP financial measures disclosed in this report are
Management’s Discussion and Analysis of Financial Condition
meant to provide additional information and insight regarding
and Results of Operations and Quantitative and Qualitative

the historical operating results and financial position of the
Disclosure about Market Risk contain certain non-GAAP
business and in certain cases to provide financial information
financial measures. The SEC defines a non-GAAP financial
that is presented to rating agencies and other users of finan-
measure as a numerical measure of a company’s historical or
cial information. These measures are not in accordance with,
future financial performance, financial position, or cash flows
or a substitute for, GAAP and may be different from or incon-
that excludes amounts, or is subject to adjustments that have
sistent with non-GAAP financial measures used by other
the effect of excluding amounts, that are included in the most
companies. See footnotes below the tables that follow for
directly comparable measure calculated and presented in
additional explanation of non-GAAP measurements.
accordance with GAAP in the financial statements or includes
amounts, or is subject to adjustments that have the effect of
Non-GAAP Reconciliations as of December 31 (dollars in millions)
2007
__________________ 2006
__________________ 2005
__________________
Managed assets : (1)
Finance receivables $62,536.5 $55,064.9 $44,294.5

Operating lease equipment, net 12,610.5 11,017.9 9,635.7
Financing and leasing assets held for sale 1,606.0 1,793.7 1,620.3
Equity and venture capital investments (included in other assets) 165.8
__________________ 25.4
__________________ 30.2
__________________
Total financing and leasing portfolio assets 76,918.8 67,901.9 55,580.7
Securitized assets 6,311.2
__________________ 6,261.4
__________________ 7,285.7
__________________
Managed assets $83,230.0
__________________ $74,163.3
__________________ $62,866.4
__________________
__________________ __________________ __________________
Earning assets(2):
Total financing and leasing portfolio assets $76,918.8 $67,901.9 $55,580.7
Credit balances of factoring clients (4,542.2)
__________________ (4,131.3)
__________________ (4,187.8)
__________________
Earning assets $72,376.6
__________________ $63,770.6
__________________ $51,392.9
__________________
__________________ __________________ __________________
Total tangible capital(3):
Total common stockholders’ equity $ 6,460.6 $ 7,251.1 $ 6,462.7
Other comprehensive (income) loss relating to
derivative financial instruments 96.6 (34.2) (27.6)
Unrealized gain on securitization investments (7.8) (18.4) (17.0)
Goodwill and intangible assets (1,152.5)
__________________ (1,008.4)
__________________ (1,011.5)
__________________
Tangible common stockholders’ equity 5,396.9 6,190.1 5,406.6
PAGE 59
Junior subordinated notes and convertible debt 1,440.0 – –
Preferred stock 500.0 500.0 500.0
Preferred capital securities(4) –
__________________ 250.3
__________________ 252.0
__________________
Total tangible capital $ 7,336.9
__________________ $ 6,940.4
__________________ $ 6,158.6
__________________
__________________ __________________ __________________
Year to Date
_________________________________________________________________________
December December December
Total net revenues(5): 2007
__________________ 2006
__________________ 2005
__________________
Net finance revenue $ 2,020.3 $ 1,802.6 $ 1,635.2
Other income 1,580.1
__________________ 1,248.8
__________________ 1,244.0
__________________
Total net revenues $ 3,600.4
__________________ $ 3,051.4
__________________ $ 2,879.2
__________________
__________________ __________________ __________________
(1) Managed assets are utilized in certain credit and expense ratios. Securitized assets are included in managed assets because CIT retains cer-
tain credit risk and the servicing related to assets that are funded through securitizations.
(2) Earning assets are utilized in certain revenue and earnings ratios. Earning assets are net of credit balances of factoring clients. This net
amount, which corresponds to amounts funded, is a basis for revenues earned.
(3) Total tangible stockholders’ equity is utilized in leverage ratios, and is consistent with certain rating agency measurements. Other comprehen-
sive income/losses relating to derivative financial instruments and unrealized gains on securitization investments (both included in the separate
component of equity) are excluded from the calculation, as these amounts are not necessarily indicative of amounts which will be realized.
(4) The preferred capital securities were called on March 12, 2007.
(5) Total net revenues are the combination of net finance revenues and other income.

03.30230-Part2.qxp 3/6/08 1:20 PM Page 60
FORWARD-LOOKING STATEMENTS
Certain statements contained in this document are “forward- All forward-looking statements involve risks and uncertain-
looking statements” within the meaning of the U.S. Private ties, many of which are beyond our control, which may cause
Securities Litigation Reform Act of 1995. All statements con- actual results, performance or achievements to differ materi-
tained herein that are not clearly historical in nature are ally from anticipated results, performance or achievements.
forward-looking and the words “anticipate,” “believe,” Also, forward-looking statements are based upon manage-
“expect,” “estimate,” “plan,” “target” and similar expressions ment’s estimates of fair values and of future costs, using
are generally intended to identify forward-looking statements. currently available information. Therefore, actual results may
Any forward-looking statements contained herein, in press differ materially from those expressed or implied in those
releases, written statements or other documents filed with the statements. Factors, in addition to those disclosed in “Risk
Securities and Exchange Commission or in communications Factors”, that could cause such differences include, but are
and discussions with investors and analysts in the normal not limited to:
course of business through meetings, webcasts, phone calls _ risks of economic slowdown, downturn or recession,
and conference calls, concerning our operations, economic _ industry cycles and trends,
performance and financial condition are subject to known and _ demographic trends,
unknown risks, uncertainties and contingencies. Forward- _ risks inherent in changes in market interest rates and
looking statements are included, for example, in the
quality spreads,
discussions about: _ funding opportunities and borrowing costs,
_ our liquidity risk management, _ changes in funding markets, including commercial paper,
_ our credit risk management, term debt and the asset-backed securitization markets,
_ our asset/liability risk management, _ uncertainties associated with risk management, including
_ our funding, borrowing costs and net finance revenue, credit, prepayment, asset/liability, interest rate and cur-
_ our capital, leverage and credit ratings, rency risks,
_ our operational risks, including success of build-out initia- _ adequacy of reserves for credit losses,
PAGE 60
tives and acquisitions, _ risks associated with the value and recoverability of leased
_ legal risks, equipment and lease residual values,
_ our growth rates, _ application of fair value accounting in volatile markets,
_ our commitments to extend credit or purchase equipment, _ changes in laws or regulations governing our business and
and operations,
_ how we may be affected by legal proceedings. _ changes in competitive factors, and
_ future acquisitions and dispositions of businesses or asset
portfolios.
ITEM 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of standing of internal control over financial reporting, assessing
CIT Group Inc.: the risk that a material weakness exists, and testing and eval-
uating the design and operating effectiveness of internal
In our opinion, the accompanying consolidated balance sheets
control based on the assessed risk. Our audits also included
and the related consolidated statements of income, of stock-
performing such other procedures as we considered neces-
holders’ equity and of cash flows present fairly, in all material
sary in the circumstances. We believe that our audits provide a
respects, the financial position of CIT Group Inc. and its sub-
reasonable basis for our opinions.
sidiaries at December 31, 2007 and December 31, 2006, and
the results of their operations and their cash flows for each of A company’s internal control over financial reporting is a
the three years in the period ended December 31, 2007 in con- process designed to provide reasonable assurance regarding
formity with accounting principles generally accepted in the the reliability of financial reporting and the preparation of
United States of America. Also in our opinion, the Company financial statements for external purposes in accordance with
maintained, in all material respects, effective internal control generally accepted accounting principles. A company’s inter-
over financial reporting as of December 31, 2007, based on nal control over financial reporting includes those policies and
criteria established in Internal Control – Integrated Framework procedures that (i) pertain to the maintenance of records that,
issued by the Committee of Sponsoring Organizations of the in reasonable detail, accurately and fairly reflect the transac-
Treadway Commission (COSO). The Company’s management tions and dispositions of the assets of the company; (ii) provide
is responsible for these financial statements, for maintaining reasonable assurance that transactions are recorded as nec-
effective internal control over financial reporting and for its essary to permit preparation of financial statements in
assessment of the effectiveness of internal control over finan- accordance with generally accepted accounting principles, and
PAGE 61
cial reporting, included in Management’s Report on Internal that receipts and expenditures of the company are being made
Control over Financial Reporting appearing on page 119, only in accordance with authorizations of management and
under Item 9A. Our responsibility is to express opinions on directors of the company; and (iii) provide reasonable assur-
these financial statements and on the Company’s internal ance regarding prevention or timely detection of unauthorized
control over financial reporting based on our integrated acquisition, use, or disposition of the company’s assets that
audits. We conducted our audits in accordance with the stan- could have a material effect on the financial statements.
dards of the Public Company Accounting Oversight Board
Because of its inherent limitations, internal control over finan-
(United States). Those standards require that we plan and per-
cial reporting may not prevent or detect misstatements. Also,
form the audits to obtain reasonable assurance about whether
projections of any evaluation of effectiveness to future periods
the financial statements are free of material misstatement
are subject to the risk that controls may become inadequate
and whether effective internal control over financial reporting
because of changes in conditions, or that the degree of com-
was maintained in all material respects. Our audits of the
pliance with the policies or procedures may deteriorate.
financial statements included examining, on a test basis, evi-
dence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and sig-
nificant estimates made by management, and evaluating the
overall financial statement presentation. Our audit of internal New York, New York
control over financial reporting included obtaining an under- February 29, 2008
Item 8: Financial Statements and Supplementary Data

CIT GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS — Assets December 31 (dollars in millions— except share data)
2007
_________________ 2006
_________________
ASSETS
Financing and leasing assets held for investment:
Finance receivables, including receivables pledged of $23,556.8 and $4,311.6 $62,536.5 $55,064.9
Reserve for credit losses (831.5)
_________________ (659.3)
_________________
Net finance receivables 61,705.0 54,405.6
Operating lease equipment, net 12,610.5 11,017.9
Financing and leasing assets held for sale 1,606.0 1,793.7
Cash and cash equivalents, including $479.2 and $179.0 restricted 6,792.3 4,458.4
Retained interests in securitizations 1,289.9 1,059.4
Goodwill and intangible assets, net 1,152.5 1,008.4
Other assets 5,091.8
_________________ 3,742.3
_________________
Total Assets $90,248.0
_________________ $77,485.7
_________________
_________________ _________________
CONSOLIDATED BALANCE SHEETS — Liabilities and Stockholders’ Equity
Debt:
Commercial paper $ 2,822.3 $ 5,365.0
Non-recourse, secured borrowings 17,430.3 4,398.5
Variable-rate senior unsecured notes 19,888.2 19,184.3
PAGE 62
Fixed-rate senior unsecured notes 29,477.6 29,107.1

Junior subordinated notes and mandatory convertible debt 1,440.0 –
Preferred capital securities –
_________________ 250.3
_________________
Total debt 71,058.4 58,305.2
Deposits 2,745.8 2,399.6
Credit balances of factoring clients 4,542.2 4,131.3

Accrued liabilities and payables 4,883.5
_________________ 4,858.6
_________________
Total Liabilities 83,229.9
_________________ 69,694.7
_________________
Commitments and Contingencies (Note 17)
Minority interest 57.5
_________________ 39.9
_________________
Stockholders’ Equity:
Preferred stock: $0.01 par value, 100,000,000 authorized
Issued and outstanding:
Series A 14,000,000 with a liquidation preference of $25 per share 350.0 350.0
Series B 1,500,000 with a liquidation preference of $100 per share 150.0 150.0
Common stock: $0.01 par value, 600,000,000 authorized
Issued: 214,390,177 and 213,555,940 2.1 2.1
Outstanding: 189,925,603 and 198,295,376
Paid-in capital, net of deferred compensation of $34.4 and $68.7 10,453.9 10,678.9
Accumulated deficit (2,949.8) (2,838.9)
Accumulated other comprehensive income 194.8 129.6
Less: treasury stock, 24,464,574 and 15,260,564 shares, at cost (1,240.4)
_________________ (720.6)
_________________
Total Common Stockholders’ Equity 6,460.6
_________________ 7,251.1
_________________
Total Stockholders’ Equity 6,960.6
_________________ 7,751.1
_________________
Total Liabilities and Stockholders’ Equity $90,248.0
_________________ $77,485.7
_________________
_________________ _________________
CONSOLIDATED STATEMENTS OF INCOME Years Ended December 31, (dollars in millions — except per share data)
2007
________________ 2006
________________ 2005
________________
Finance revenue $ 7,024.9 $ 5,693.9 $ 4,515.2
Interest expense 3,832.3 2,867.8 1,912.0
Depreciation on operating lease equipment 1,172.3
________________ 1,023.5
________________ 968.0
________________
Net finance revenue 2,020.3 1,802.6 1,635.2
________________ 222.2
________________ 217.0
________________
Net finance revenue after credit provision 1,426.5 1,580.4 1,418.2
Valuation allowance for receivables held for sale 1,271.4
________________ 15.0
________________ 106.6
________________
Net finance revenue, after credit provision and valuation allowance 155.1 1,565.4 1,311.6
Other income 1,580.1
________________ 1,248.8
________________ 1,244.0
________________
Total net revenue after valuation allowance 1,735.2 2,814.2 2,555.6
Salaries and general operating expenses 1,478.7 1,382.6 1,113.8
Provision for severance and real estate exiting activities 76.8 19.6 25.2
Loss on early extinguishments of debt 139.3 – –
Impairment of goodwill and intangible assets 312.7
________________ –
________________ –
________________
(Loss) income before provision for income taxes (272.3) 1,412.0 1,416.6
Benefit (provision) for income taxes 194.4 (364.4) (464.2)
Minority interest, after tax (3.1)
________________ (1.6)
________________ (3.3)
________________
Net (loss) income before preferred stock dividends (81.0) 1,046.0 949.1
Preferred stock dividends (30.0)
________________ (30.2)
________________ (12.7)
________________
PAGE 63
Net (loss) income (attributable) available to common stockholders $ (111.0)
________________
________________ $ 1,015.8
________________
________________ $ 936.4
________________
________________
Per common share data
Basic (loss) earnings per share $ (0.58) $ 5.11 $ 4.54
Diluted (loss) earnings per share $ (0.58) $ 5.00 $ 4.44
Number of shares – basic (thousands) 191,412 198,912 206,059
Number of shares – diluted (thousands) 191,412 203,111 210,734
Dividends per common share $ 1.00 $ 0.80 $ 0.61

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (dollars in millions)

Accumulated
Accumulated Other Total
Preferred Common Paid-in (Deficit) / Comprehensive Treasury Stockholders’
Stock _______________
_________________ Stock Capital
_______________ Earnings Income / (Loss) _______________
_______________________
___________________________ Stock ________________________
Equity
December 31, 2004 $ – $2.1 $10,674.3 $(4,499.1) $ (58.4) $ (63.8) ________________________
$6,055.1
Net income before preferred
stock dividends 949.1 949.1
Foreign currency translation
adjustments 110.7 110.7
Change in fair values of
derivatives qualifying as cash
flow hedges 54.7 54.7
Unrealized gain on available for
sale equity and securitization
investments, net 8.7 8.7
Minimum pension liability adjustment (0.5) (0.5)
________________________
Total comprehensive income 1,122.7
________________________
Issuance of Series A and B
preferred stock 500.0 (10.1) 489.9
Stock repurchase agreement (8.5) (491.5) (500.0)
Cash dividends - common (128.7) (128.7)
Cash dividends - preferred (12.7) (12.7)
Restricted stock expense 43.3 43.3
Treasury stock purchased, at cost (276.3) (276.3)
Exercise of stock option awards,
including tax benefits (65.5) 231.1 165.6
PAGE 64
Employee stock purchase plan

participation _________________ _______________ (0.6) _______________________
_______________ ___________________________ 4.4 ________________________
_______________ 3.8
December 31, 2005 500.0 2.1 10,632.9 (3,691.4) 115.2 (596.1) ________________________
6,962.7
stock dividends 1,046.0 1,046.0
Change in fair values of derivatives

qualifying as cash flow hedges 6.6 6.6
Unrealized gain on available for
sale securitization
investments, net 1.1 1.1
Minimum pension liability adjustment 0.7 0.7
________________________
Total comprehensive income 1,113.1
________________________
Adjustment to initially apply
FASB Statement No. 158, net of tax (52.7) (52.7)
Stock option expense 30.8 30.8
Employee stock purchase
plan participation _________________ _______________ _______________ _______________________ ___________________________ 4.0 ________________________
_______________ 4.0
December 31, 2006 $500.0 $2.1 $10,678.9 $(2,838.9) $129.6 $(720.6) $7,751.1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (dollars in millions) (continued)

Accumulated
Accumulated Other Total
Preferred Common Paid-in (Deficit) / Comprehensive Treasury Stockholders’
Stock _______________
_________________ Stock Capital _______________________
______________ Earnings ___________________________
Income / (Loss) _______________
Stock ________________________
Equity
December 31, 2006 $500.0 $2.1 $10,678.9 $(2,838.9) $ 129.6 $ (720.6) ________________________
$7,751.1
stock dividends (81.0) (81.0)
Change in fair values of derivatives
qualifying as cash flow hedges (130.8) (130.8)
Unrealized (loss) on available for
sale equity and securitization
investments, net (10.5) (10.5)
Minimum pension liability
adjustment 19.6 19.6
________________________
Total comprehensive income (15.8)
________________________
Adjustments to initially apply
FASB FSP 13-2 and FIN 48
(see Note 1) 0.1 0.1
Stock repurchase agreement (5.9) (494.1) (500.0)
Stock option expense 24.3 24.3
PAGE 65
Issuance of stock pursuant to forward
equity commitment agreement (4.0) 12.0 8.0
Forward contract fees related to
issuance of mandatory
convertible equity units (23.7) (23.7)
Employee stock purchase
plan participation _________________ _______________ (1.5) _______________________ ___________________________
______________ 3.6 ________________________
_______________ 2.1
December 31, 2007 $500.0
_________________ $2.1
_______________ $10,453.9
_______________ $(2,949.8) ___________________________
_______________________ $ 194.8 $(1,240.4) $6,960.6
_______________ ________________________
_________________ _______________ _______________ _______________________ ___________________________ _______________ ________________________

CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31 (dollars in millions)

2007
_________________ 2006
_________________ 2005
_________________
Cash Flows From Operations
Net income before preferred stock dividends $ (81.0) $ 1,046.0 $ 949.1
Adjustments to reconcile net income to net cash flows from operations:
Depreciation, amortization and accretion 1,280.8 1,066.4 922.0
Gains on equipment, receivable and investment sales (533.9) (396.5) (349.0)
Valuation allowance for lending receivables held for sale 1,271.4 15.0 106.6
Goodwill and intangible asset impairment charges 312.7 – –
Loss on early extinguishments of debt 139.3 – –
Provision for credit losses 593.8 222.2 217.0
(Benefit) provision for deferred income taxes (266.3) 159.6 324.6
Share-based compensation amortization 42.2 74.9 43.3
Decrease (increase) in finance receivables held for sale 224.6 (102.8) 199.3
(Increase) decrease in other assets (1,160.1) (496.2) 339.0
(Decrease) increase in accrued liabilities and payables 505.5
_________________ (340.3)
_________________ 183.1
_________________
Net cash flows provided by operations 2,329.0
_________________ 1,248.3
_________________ 2,935.0
_________________
Cash Flows From Investing Activities
Finance receivables extended and purchased (77,636.3) (77,165.5) (64,436.5)
Principal collections of finance receivables and investments 65,166.5 62,781.0 54,708.7
Proceeds from asset and receivable sales 8,457.6 6,819.9 6,351.9
Purchases of assets to be leased and other equipment (2,865.2) (2,860.2) (2,428.2)
PAGE 66
Acquisitions, net of cash acquired (3,989.2) (854.7) (985.4)

Net (increase) decrease in short-term factoring receivables 112.9
_________________ (233.9)
_________________ 96.5
_________________
Net cash flows (used for) investing activities (10,753.7)
_________________ (11,513.4)
_________________ (6,693.0)
_________________
Cash Flows From Financing Activities
Net increase (decrease) in commercial paper (2,542.7) 140.0 1,014.1
Proceeds from the issuance of term debt 24,176.4 19,904.7 13,765.1

Repayments of term debt (10,717.2) (9,450.0) (9,133.8)
Net increase in deposits 346.2 2,137.7 104.2
Net repayments of non-recourse leveraged lease debt (234.4) (1,451.1) (630.0)
Collection of security deposits and maintenance funds 1,580.2 1,201.2 1,006.4
Repayment of security deposits and maintenance funds (1,353.3) (1,032.4) (972.1)
Treasury stock repurchases (718.3) (315.2) (820.2)
Treasury stock issuances 198.5 190.7 235.5
Cash dividends paid (221.9) (193.5) (141.4)
Excess tax benefit related to share-based compensation 10.3 31.6 –
Issuance of preferred stock – – 489.9
Other (65.4)
_________________ 33.3
_________________ (22.4)
_________________
Net cash flows provided by financing activities 10,458.4
_________________ 11,197.0
_________________ 4,895.3
_________________
Net increase in cash and cash equivalents 2,033.7 931.9 1,137.3
Unrestricted cash and cash equivalents, beginning of period 4,279.4
_________________ 3,347.5
_________________ 2,210.2
_________________
Unrestricted cash and cash equivalents, end of period $_________________
6,313.1 $_________________
4,279.4 $_________________
3,347.5
_________________ _________________ _________________
Supplementary Cash Flow Disclosure
Interest paid $ 3,079.8 $ 2,404.9 $ 1,651.5
Federal, foreign, state and local income taxes paid, net $199.0 $159.1 $115.6
Supplementary Non-cash Disclosure
Non-cash transfer of home lending receivables from
held-for-investment to held-for-sale $ 1,390.3 $ – $ –
CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – BUSINESS AND SUMMARY OF SIGNIFICANT financing leases classified as HFI are recorded at the aggre-
ACCOUNTING POLICIES gate future minimum lease payments plus estimated residual
Principles of Consolidation and Basis of Presentation values less unearned finance income. Leveraged leases, for
which a major portion of the funding is provided by third party
The accompanying consolidated financial statements include
lenders on a non-recourse basis, with CIT providing the bal-
the accounts of CIT Group Inc. and its majority owned sub-
ance and acquiring title to the property, are recorded at the
sidiaries, and those variable interest entities (VIEs) where the
aggregate value of future minimum lease payments plus esti-
Company is the primary beneficiary. All significant intercom-
mated residual value, less non-recourse third party debt and
pany accounts and transactions have been eliminated. Results
unearned finance revenue. Management performs periodic
of operations of companies purchased are included from the
reviews of estimated residual values with other than temporary
dates of acquisition and for VIEs, from the dates that the
impairment recognized in current period earnings. Operating
Company became the primary beneficiary. Assets held in an
lease equipment is carried at cost less accumulated deprecia-
agency or fiduciary capacity are not included in the consolidated
tion and is depreciated to estimated residual value using the
financial statements. The Company accounts for investments in
straight-line method over the lease term or projected eco-
companies for which it owns a voting interest of 20 percent to 50
nomic life of the asset. Equipment acquired in satisfaction of
percent and for which it has the ability to exercise significant
loans is recorded at the lower of carrying value or estimated
influence over operations and financial decisions using the
fair value, less costs to sell, when acquired.
equity method of accounting. These investments are included in
other assets and the Company’s proportionate share of net Maintenance costs incurred that exceed maintenance funds
income or loss is included in other income. collected for commercial aircraft are not capitalized if they do
not provide a future economic benefit and do not extend the
The preparation of the consolidated financial statements in
useful life of the aircraft. Such costs may include costs of rou-
conformity with accounting principles generally accepted in
tine aircraft operation and costs of maintenance and spare
the United States (GAAP) requires management to make esti-
parts incurred in connection with re-Ieasing an aircraft and
mates and assumptions that affect reported amounts and
during the transition between leases. For such maintenance
disclosures. Actual results could differ from those estimates
costs that are not capitalized, a charge is recorded in general
and assumptions.
operating expense at the time the costs are incurred. Income
PAGE 67
In 2007, the Company changed its basis of presentation for its recognition related to maintenance funds collected is deferred
business segments. For additional information on segments, to the extent management estimates costs will be incurred by
see Note 21 – Business Segment Information. In addition, the subsequent lessees performing scheduled maintenance.
Company revised the classification of cash flow changes in Upon the disposition of an aircraft, any excess maintenance
security deposits and aerospace equipment maintenance funds funds that exist are recognized as income.
and included these amounts as a separate line item within
The determination of intent and ability for the foreseeable
“Cash Flows From Financing Activities”. Previously, these
future is highly judgmental and requires management to make
changes had been included in the line item Increase (decrease)
good faith estimates based on information available at the
in accrued liabilities and payables in “Cash Flows from
time. Generally, the Company’s intent to syndicate and securi-
Operations”. The presentation of corresponding 2006 and 2005
tize assets is established prior to the origination of specific
balances have been conformed to this presentation. The effect
assets as part of the Company’s asset, liability and liquidity
of the revision to the previously issued 2006 and 2005 cash flow
risk management process. Similarly, CIT’s intent to hold
statement is a reduction of $168.8 million and $34.3 million
assets that are classified as HFI is generally established prior
from cash flows from operations, and corresponding increase in
to origination.
cash flows from financing activities. Further, eligible amounts
due to/from derivative counterparties have been reclassified, Loans and lease receivables designated for sale, securitization
resulting in a $418 million increase to other assets and accrued or syndication are classified as finance receivables held for
liabilities and payables in the 2006 presentation. sale and are carried at lower of cost or fair value. The amount
by which costs exceeds fair value is recorded as a valuation
Financing and Leasing Assets
allowance. Subsequent changes in the valuation allowance are
CIT extends credit to customers through a variety of financing included in the determination of net income in the period in
arrangements, including term loans, lease financing and which the change occurs. Loans transferred from the held-
operating leases. The amounts outstanding on loans, direct for-sale classification to the held-for-investment classification
financing and leveraged leases are referred to as finance are transferred at the lower of cost or market on the transfer
receivables and, when combined with finance receivables held date, which coincides with the date of change in manage-
for sale and the net book value of operating lease equipment, ment’s intent. The difference between the carrying value of the
represent financing and leasing assets. loan and the market value, if lower, is reflected as a loan dis-
Loans and lease receivables are accounted for as held-for- count at the transfer date, which reduces its carrying value.
investment (HFI) if management has the intent and ability to Subsequent to the transfer, the discount is accreted into earn-
hold the receivables for the foreseeable future or until maturity. ings as an increase to finance revenue over the life of the loan
Loans classified as HFI are recorded at amortized cost. Direct using the interest method.

Revenue Recognition Impaired Finance Receivables

Finance revenue includes interest on loans, the accretion of Impaired finance receivables include any loans or capital
income on direct financing leases and leveraged leases, leases of $500 thousand or greater that are placed on non-
discount on loans held for investment, and rents on operating accrual status and are subject to periodic individual review by
leases. Related origination and other nonrefundable fees and CIT’s Asset Quality Review Committee (“AQR”). The AQR,
direct origination costs are deferred and amortized as an which is comprised of members of senior management,
adjustment of finance revenue over the contractual life of the reviews overall portfolio performance, as well as individual
transactions. Revenue on finance receivables other than lever- accounts meeting certain credit risk grading parameters.
aged leases is recognized on an accrual basis commencing in Excluded from impaired finance receivables are: 1) certain
the month of origination. Leveraged lease revenue is recog- individual commercial non-accrual finance receivables for
nized on a basis calculated to achieve a constant after-tax rate which the collateral value supports the outstanding balance
of return for periods in which CIT has a positive investment in and the continuation of earning status, 2) home lending, small
the transaction, net of related deferred tax liabilities. Rental ticket leasing and other homogeneous pools of loans, which
revenue on operating leases is recognized on a straight line are subject to automatic charge-off procedures, and 3) short-
basis over the lease term. term factoring customer finance receivables, generally having
terms up to 30 days. Impairment occurs when, based on cur-
The recognition of revenue on commercial finance receivables
rent information and events, it is probable that CIT will be
is generally suspended and an account is placed on non-
unable to collect all amounts due according to the contractual
accrual status when payment of principal or interest is
terms of the financing agreement. Impairment is measured as
contractually delinquent for 90 days or more, or earlier when,
any shortfall between the estimated value and the recorded
in the opinion of management, full collection of all principal
investment in the finance receivable, with the estimated value
and interest due is doubtful. To the extent the estimated fair
determined using the fair value of the collateral and other
value of collateral does not satisfy both the principal and
cash flows if the finance receivable is collateralized, or the
accrued interest outstanding, accrued but uncollected interest
present value of expected future cash flows discounted at the
at the date an account is placed on non-accrual status is
contract’s effective interest rate.
reversed and charged against revenue. Subsequent interest
PAGE 68
received is applied to the outstanding principal balance until Charge-off of Finance Receivables
such time as the account is collected, charged-off or returned Finance receivables are reviewed periodically to determine the
to accrual status. The accrual of finance revenue on consumer probability of loss. Charge-offs are taken after considering
loans is suspended, and all previously accrued but uncollected such factors as the borrower’s financial condition and the value
revenue is reversed, when payment of principal and/or interest of underlying collateral and guarantees (including recourse to
is contractually delinquent for 90 days or more. dealers and manufacturers) and the status of collection activi-
Reserve for Credit Losses on Finance Receivables ties. Such charge-offs are deducted from the carrying value of
the related finance receivables. To the extent that an unrecov-

The reserve for credit losses is intended to provide for losses
ered balance remains due, a final charge-off is taken at the
inherent in the portfolio and is periodically reviewed for ade-
time collection efforts are deemed no longer useful. Charge-
quacy considering economic conditions, collateral values and
offs are recorded on home lending, consumer and certain
credit quality indicators, including historical and expected
small ticket commercial finance receivables beginning at 180
charge-off experience and levels of and trends in past due
days of contractual delinquency. Collections on accounts previ-
loans, non-performing assets and impaired loans.
ously charged off are recorded as recoveries. With respect to
The reserve for credit losses is determined based on three key assets transferred to held for investment from held for sale,
components: (1) specific reserves for loans that are impaired charge-offs are recognized to the extent the loan carrying
under Statement of Financial Accounting Standards (SFAS) value, including remaining unaccreted discount, exceeds the
114, based upon the value of underlying collateral or projected corresponding expected future cash flows for that loan.
cash flows, (2) reserves for estimated losses inherent in the
Retained Interests in Securitizations
portfolio based upon historical and projected charge-offs and
(3) reserves for estimated losses inherent in the portfolio Pools of assets are originated and sold to special purpose
based upon economic risks, industry and geographic concen- entities which, in turn, issue debt securities backed by the
trations and other factors. In management’s judgment, the asset pools or sell individual interests in the assets to
reserve for credit losses is adequate to provide for credit investors. CIT retains the servicing rights and participates in
losses inherent in the portfolio. However, changes in economic certain cash flows from the pools. For transactions meeting
conditions or other events affecting specific obligors or indus- accounting sale criteria, the present value of expected net
tries may necessitate additions or deductions to the reserve cash flows (after payment of principal and interest to certifi-
for credit losses. cate and/or note holders and credit-related disbursements)
that exceeds the estimated cost of servicing is recorded at the
With respect to assets transferred to held for investment from time of sale as a “retained interest.” Retained interests in
held for sale, a reserve for credit losses is recognized to the securitized assets are classified as available-for-sale securi-
extent estimated inherent losses exceed corresponding ties and accounted for at fair value in accordance with SFAS
remaining discount at the applicable balance sheet date. No. 115. In its estimation of those net cash flows and retained
interests, management employs a variety of financial assump- markets with other financial institutions. To ensure both
tions, including loan pool credit losses, prepayment speeds appropriate use as a hedge and to achieve hedge accounting
and discount rates. These assumptions are supported by both treatment, whenever possible, derivatives entered into are
CIT’s historical experience, market trends and anticipated designated according to a hedge objective against a specific
performance relative to the particular assets securitized. liability, forecasted transaction or, in limited instances, assets.
Subsequent to the recording of retained interests, estimated The critical terms of the derivatives, including notional
cash flows underlying retained interests are periodically amounts, rates, indices, and maturities, match the related
updated based upon current information and events that man- terms of the underlying hedged items. CIT does not enter into
agement believes a market participant would use in derivative financial instruments for speculative purposes.
determining the current fair value of the retained interest. If
Major portfolio hedge strategies include: (1) Interest rate risk
the analysis indicates that an adverse change in estimated
management to match fund asset portfolio growth. Interest
cash flows has occurred, an “other-than temporary” impair-
rate swaps, whereby CIT pays a fixed interest rate and receives
ment is recorded and included in net income to write down the
a variable interest rate, are utilized to hedge either forecasted
retained interest to estimated fair value. Unrealized gains are
commercial paper issuances or specific variable-rate debt
not credited to current earnings, but are reflected in stock-
instruments. These transactions are classified as cash flow
holders’ equity as part of other comprehensive income.
hedges and effectively convert variable-rate debt to fixed-rate
Servicing assets or liabilities are established when the fees for debt. Interest rate swaps, whereby CIT pays a variable interest
servicing securitized assets are more or less than adequate rate and receives a fixed interest rate, are utilized to hedge
compensation to CIT for servicing the assets. CIT securitization specific fixed-rate debt. These transactions are classified as
transactions generally do not result in servicing assets or lia- fair value hedges and effectively convert fixed-rate debt to a
bilities, as typically the contractual fees are adequate variable-rate debt. (2) Currency risk management to hedge
compensation in relation to the associated servicing costs. To foreign funding sources. Cross-currency swaps, whereby CIT
the extent applicable, servicing assets or liabilities are pays U.S. dollars and receives various foreign currencies, are
recorded at fair value and recognized in earnings over the serv- utilized to effectively convert foreign-denominated debt to U.S.
icing period and are periodically evaluated for impairment. dollar debt. These transactions are classified as either foreign
currency cash flow or foreign currency fair value hedges. (3)
PAGE 69
In February 2005, CIT acquired Education Lending Group, Inc.,
Currency risk management to hedge investments in foreign
a specialty finance company principally engaged in providing
operations. Cross-currency swaps and foreign currency for-
education loans (primarily U.S. government guaranteed),
ward contracts, whereby CIT pays various foreign currencies
products and services to students, parents, schools and
and receives U.S. dollars, are utilized to effectively convert
alumni associations. This business is largely funded with
U.S. dollar denominated debt to foreign currency denominated
“Education Loan Backed Notes,” which are accounted for
debt. These transactions are classified as foreign currency net
under SFAS No. 140 “Accounting for Transfers and Servicing of
investment hedges, or foreign currency cash flow hedges, with
Financial Assets and Extinguishments of Liabilities.” The
resulting gains and losses reflected in accumulated other
assets related to these borrowings are owned by a special
comprehensive income as a separate component of equity.
purpose entity that is consolidated in the CIT financial state-
ments, and the creditors of that special purpose entity have Derivative instruments are recognized in the balance sheet at
received ownership and, or, security interests in the assets. their fair values in other assets and accrued liabilities and
CIT retains certain call features with respect to these borrow- payables, and changes in fair values are recognized immedi-
ings. The transactions do not meet the SFAS 140 requirements ately in earnings, unless the derivatives qualify as cash flow
for sales treatment and are, therefore, recorded as secured hedges. For derivatives qualifying as hedges of future cash
borrowings and are reflected in the Consolidated Balance flows, the effective portion of changes in fair value is recorded
Sheet as Finance receivables pledged and Non-recourse, temporarily in accumulated other comprehensive income as a
secured borrowings. Certain cash balances, included in cash separate component of equity, and contractual cash flows,
and cash equivalents, are restricted in conjunction with these along with the related impact of the hedged items, continue to
borrowings. be recognized in earnings. Any ineffective portion of a hedge is
reported in current earnings. Amounts accumulated in other
In 2007, the Company also funded a portion of the business in comprehensive income are reclassified to earnings in the
the asset-backed markets with on-balance sheet financings same period that the hedged transaction impacts earnings.
secured by home loans, factoring receivables, and certain
other commercial loans. Similar to the student loan facilities, CIT uses both the “short-cut” method and the “long-haul”
these transactions do not meet the accounting (SFAS 140) method to assess hedge effectiveness. The short-cut method
requirements for sales treatment and are therefore reflected is applied to certain interest rate swaps used for fair value and
in the Consolidated Balance Sheet as Finance receivables cash flow hedges of term debt if certain strict criteria are met.
pledged and Non-recourse, secured borrowings. This method allows for the assumption of no hedge ineffec-
tiveness if these strict criteria are met at the inception of the
Derivative Financial Instruments derivative, including matching of the critical terms of the debt
As part of managing economic risk and exposure to interest instrument and the derivative. As permitted under the short-
rate, foreign currency and, in limited instances, credit risk, CIT cut method, no further assessment of hedge effectiveness is
enters into various derivative transactions in over-the-counter performed for these transactions.

The long-haul method is applied to other interest rate swaps, Goodwill represents the excess of the purchase price over the
non-compound cross-currency swaps and foreign currency for- fair value of identifiable assets acquired, less the fair value of
ward exchange contracts. For hedges where we use the liabilities assumed from business combinations. Goodwill is
long-haul method to assess hedge effectiveness, we document, no longer amortized, but instead is assessed for impairment
both at inception and over the life of the hedge, at least quar- at least annually. During this assessment, management relies
terly, our analysis of actual and expected hedge effectiveness. on a number of factors, including operating results, business
For hedges of forecasted commercial paper transactions, more plans, economic projections, anticipated future cash flows and
extensive analysis using techniques such as regression analysis market place data.
are used to demonstrate that the hedge has been, and is
Intangible assets consist primarily of customer relationships
expected to be, highly effective in off-setting corresponding
acquired, which have amortizable lives up to 20 years, and
changes in the cash flows of the hedged item. For hedges of
computer software and related transactions processes, which
foreign currency net investment positions we apply the “for-
are being amortized over a 5-year life. An evaluation of the
ward” method whereby effectiveness is assessed and measured
remaining useful lives and the amortization methodology of
based on the amounts and currencies of the individual hedged
the intangible assets is performed periodically to determine if
net investments and notional amounts and underlying curren-
any change is warranted.
cies of the derivative contract. For those hedging relationships
in which the critical terms of the entire debt instrument and the Long-Lived Assets
derivative are identical, and the creditworthiness of the A review for impairment of long-lived assets, such as certain
counterparty to the hedging instrument remains sound, there is operating lease equipment, is performed at least annually and
an expectation of no hedge ineffectiveness so long as those whenever events or changes in circumstances indicate that
conditions continue to be met. the carrying amount of long-lived assets may not be recover-
The net interest differential, including premiums paid or able. Impairment of assets is determined by comparing the
received, if any, on interest rate swaps, is recognized on an carrying amount of an asset to future undiscounted net cash
accrual basis as an adjustment to finance revenue or as inter- flows expected to be generated by the asset. If an asset is con-
est expense to correspond with the hedged position. In the sidered to be impaired, the impairment is the amount by which
event of early termination of derivative instruments, the gain the carrying amount of the asset exceeds the fair value of the
PAGE 70
or loss is reflected in earnings as the hedged transaction is asset. Fair value is based upon discounted cash flow analysis
recognized in earnings. and available market data. Current lease rentals, as well as
relevant and available market information (including third
Derivative instruments are transacted with CIT customers party sales for similar equipment, published appraisal data
using interest rate swaps and other derivatives with our cus- and other marketplace information), is considered, both in
tomers as well as derivative transactions with other financial determining undiscounted future cash flows when testing for
institutions with like terms. These derivative instruments do the existence of impairment and in determining estimated fair
not qualify for hedge accounting. As a result, changes in fair value in measuring impairment. Depreciation expense is
value of the derivative instruments are reflected in current adjusted when projected fair value at the end of the lease term
earnings. is below the projected book value at the end of the lease term.
CIT is exposed to credit risk to the extent that the counterparty Assets to be disposed of are reported at the lower of the carry-
fails to perform under the terms of a derivative instrument. ing amount or fair value less costs to dispose.
This risk is measured as the market value of derivative trans- Other Assets
actions with a positive fair value, reduced by the effects of
Assets received in satisfaction of loans are carried at the lower
master netting agreements. We manage this credit risk by
of carrying value or estimated fair value less selling costs,
requiring that all derivative transactions be conducted with
with write-downs of the pre-existing receivable generally
counterparties rated investment grade by nationally recog-
reflected in provision for credit losses.
nized rating agencies, with the majority of the counterparties
rated “AA” or higher, and by setting limits on the exposure with Realized and unrealized gains (losses) on marketable equity
any individual counterparty. Accordingly, counterparty credit securities are recognized currently in operations. Unrealized
risk is not considered significant. gains and losses, representing the difference between carry-
ing value and estimated current fair market value, for other
Goodwill and Other Identified Intangibles
debt and equity securities are recorded in other accumulated
SFAS No. 141 “Business Combinations” requires that business comprehensive income, a separate component of equity.
combinations be accounted for using the purchase method.
The purchase method of accounting requires that the cost of Investments in joint ventures are accounted for using the
an acquired entity be allocated to the assets acquired and lia- equity method, whereby the investment balance is carried at
bilities assumed based on their estimated fair values at the cost and adjusted for the proportionate share of undistributed
date of acquisition. The difference between the fair values and earnings or losses. Unrealized intercompany profits and
the purchase price is recognized as goodwill. Identified intan- losses are eliminated until realized, as if the joint venture were
gible assets acquired in a business combination are consolidated.
separately valued and recognized on the balance sheet provid-
ing they meet certain recognition requirements.
Mandatory Convertible Equity Units instruments. Significant assets and liabilities that are not con-
The Company has allocated proceeds received upon issuance of sidered financial instruments include customer base,
the mandatory convertible equity units in accordance with APB operating lease equipment, premises and equipment, assets
14 based on relative fair values at the time of issuance. The fair received in satisfaction of loans, and deferred tax balances. In
value of the equity forward at issuance was zero. The Company addition, tax effects relating to the unrealized gains and losses
has allocated 0.15% of the 3.0% of underwriting commissions (differences in estimated fair values and carrying values) have
paid to the debt as deferred charges based on commissions not been considered in these estimates and can have a signifi-
paid for similar debt issuances in the past. The deferred cant effect on fair value estimates. The carrying amounts for
charges will be amortized over the life of the note (until remar- cash and cash equivalents approximate fair value because
keting date) using the interest method. The remaining they have short maturities and do not present significant
underwriting commissions (2.85%) were allocated to the equity credit risks. Credit-related commitments, as disclosed in Note
forward and recorded as a reduction to paid in capital. The pres- 17 – “Commitments and Contingencies”, are primarily short-
ent value of the future quarterly equity forward payments has term variable-rate contracts whose terms and conditions are
been recorded at inception as a liability and a reduction to paid- individually negotiated, taking into account the creditworthi-
in capital. Interest on the liability component will be recorded as ness of the customer and the nature, accessibility and quality
an adjustment to the yield. In computing earnings per share of the collateral and guarantees. Therefore, the fair value of
(EPS), the treasury stock method is used. Basic EPS will not be credit-related commitments, if exercised, would approximate
affected until the equity forwards are satisfied and the holders their contractual amounts.
thereof become common stock holders. Diluted EPS will not be Income Taxes
affected until CIT’s common stock price is over $42 per share
Deferred tax assets and liabilities are recognized for the
(120% of $34.98 reference price at security issue). See Note 9
expected future taxation of events that have been reflected in
for additional discussion.
the Consolidated Financial Statements. Deferred tax liabilities
The value of the stock purchase contracts is included in equity and assets are determined based on the differences between
based on the requirements of SFAS No. 150, Accounting for the book values and the tax basis of particular assets and lia-
Certain Financial Instruments with Characteristics of both bilities, using tax rates in effect for the years in which the
PAGE 71
Liabilities and Equity, and EITF Issue No. 00-19, Accounting for differences are expected to reverse. A valuation allowance is
Derivative Financial Instruments Indexed to, and Potentially provided to offset any net deferred tax assets if, based upon
Settled in, a Company’s Own Stock. The equity forwards require the relevant facts and circumstances, it is more likely than not
physical settlement, and are therefore accounted for as equity. that some or all of the deferred tax assets will not be realized.
U.S. income taxes are generally not provided on undistributed
Fair Value of Financial Instruments
earnings of foreign operations as such earnings are perma-
SFAS No. 107 “Disclosures about Fair Value of Financial nently invested. FIN 48 liabilities and tax reserves reflect open
Instruments” requires disclosure of the estimated fair value of tax return positions, tax assessments received, tax law
CIT’s financial instruments, excluding leasing transactions changes and third party indemnifications, and are included in
accounted for under SFAS 13. These fair value estimates are current taxes payable, which is reflected in accrued liabilities
made at a discrete point in time based on relevant market infor- and payables.
mation and information about the financial instrument,
assuming adequate market liquidity. Because no established Effective January 1, 2007, management adopted Financial
trading market exists for a significant portion of CIT’s financial Accounting Standards Board FSP No. FAS 13-2, (“FAS 13-2”)
instruments, fair value estimates are based on judgments “Accounting for a Change or Projected Change in the Timing of
regarding future expected loss experience, current economic Cash Flows Relating to Income Taxes Generated by a
conditions, risk characteristics of various financial instruments, Leveraged Lease Transaction”. The Company applied FAS 13-
and other factors. These estimates are subjective in nature, 2 to all its leveraged lease transactions under the transition
involving uncertainties and matters of significant judgment and, provision of the interpretation. As a result of the adoption, a
therefore, cannot be determined with precision. Changes in direct credit of $6.5 million after taxes reduced the
assumptions or estimation methods may significantly affect the Accumulated deficit as of January 1, 2007.
estimated fair values. Because of these limitations, there is no Effective January 1, 2007, the Company adopted Financial
assurance that the estimated fair values presented would nec- Accounting Standards Board Interpretation No. 48 (“FIN 48”)
essarily be realized upon disposition or sale. “Accounting for Uncertainty in Income Taxes”, which clarifies
Actual fair values in the marketplace are affected by many fac- the accounting for income taxes by prescribing the minimum
tors, such as supply and demand, market liquidity, investment recognition threshold a tax position must meet to be recog-
trends, the motivations of buyers and sellers, and geopolitical nized in the financial statements. The Company applied FIN 48
risks which are not considered in the methodology used to to all its tax positions, including tax positions taken and those
determine the estimated fair values presented. In addition, fair expected to be taken, under the transition provision of the
value estimates are based on existing financial instruments interpretation. As a result of the adoption, a direct charge for
without attempting to estimate the value of future business $6.4 million increased the Accumulated deficit as of January
transactions and the value of assets and liabilities that are 1, 2007. As of the date of adoption and after the impact of rec-
part of CIT’s overall value but are not considered financial ognizing the increase in liability noted above, the Company’s

unrecognized tax benefits totaled $211.0 million, the recogni- (1) factoring commissions, (2) commitment, facility, letters of
tion of which would affect the annual effective income tax rate. credit, advisory and syndication fees, (3) servicing fees,
During the twelve months ended December 31, 2007, the including servicing of securitized loans, (4) gains and losses
Company recognized approximately $8.0 million net decrease from sales of leasing equipment and sales and syndications of
in the liability for uncertain tax positions, offset by a $14.2 mil- finance receivables, (5) gains from and fees related to securiti-
lion increase attributable to foreign currency revaluation. zations including accretion related to retained interests (net of
impairment), (6) equity in earnings of joint ventures and
The Company recognizes potential accrued interest and
unconsolidated subsidiaries, and (7) gains and losses related
penalties related to unrecognized tax benefits within its global
to certain derivative transactions.
operations in income tax expense. In conjunction with the
adoption of FIN 48, the Company recognized approximately Pension and Other Post-retirement Benefits
$48.7 million for the payment of interest and penalties at CIT has a number of funded and unfunded noncontributory
January 1, 2007, which is included as a component of the defined benefit pension plans covering certain of its U.S. and
$211.0 million unrecognized tax benefit noted above. During non-U.S. employees, each of which is designed in accordance
the twelve months ended December, 2007, the Company rec- with the practice and regulations in the countries concerned.
ognized approximately $1.8 million net decrease in potential The Company adopted SFAS No. 158 “Employer’s Accounting
interest and penalties associated with uncertain tax positions for Defined Benefit Pension and Other Postretirement Plans –
offset by a $7.6 million increase attributable to foreign cur- an amendment of FASB Statements No. 87, 88, 106, and 132R”
rency revaluation. After the impact of recognizing the net on a prospective basis effective December 31, 2006, which
increase in liability and interest noted above, the Company’s requires recognition of the funded status of a benefit plan,
unrecognized tax benefits totaled $223.0 million, the recogni- measured as the difference between plan assets at fair value
tion of which would affect the annual effective tax rate. To the and the benefit obligation, in the balance sheet. It also
extent interest and penalties are not assessed with respect to requires the Company to recognize as a component of other
uncertain tax positions, amounts accrued will be reduced and comprehensive income, net of tax, the gains or losses and
reflected as a reduction of the overall income tax provision. prior service costs or credit that arise during the period but
The Company anticipates that it is reasonably possible that the are not recognized as components of net periodic benefit cost
total unrecognized tax benefits will decrease due to the settle-
PAGE 72
pursuant to SFAS 87.

ment of audits and the expiration of statute of limitations prior
to December 31, 2008 in the range of $20-$40 million. See Earnings per Share
Note 15 - Income Taxes, for additional disclosures. Basic EPS is computed by dividing net income by the
weighted-average number of common shares outstanding for
Other Comprehensive Income/Loss
the period. In 2006 and 2005 where net income was positive,
Other comprehensive income/loss includes unrealized gains diluted EPS includes the potential impact of dilutive securities,
on securitization retained interests and other available-for-
including stock options and restricted stock grants. The dilu-

sale investments, foreign currency translation adjustments tive effect of stock options is computed using the treasury
pertaining to both the net investment in foreign operations and stock method, which assumes the repurchase of common
the related derivatives designated as hedges of such invest- shares by CIT at the average market price for the period. In
ments, the changes in fair values of derivative instruments 2007, our net loss had the effect of making these dilutive secu-
designated as hedges of future cash flows and certain pension rities anti-dilutive for EPS calculation.
and post-retirement benefit obligations. Amounts are recog-
Stock-Based Compensation
nized net of tax to the extent applicable.
On January 1, 2006, the Company adopted the revision to SFAS
Foreign Currency Translation No. 123, “Share-Based Payment” (“FAS 123R”), which
CIT has operations in Canada, Europe and several other coun- requires the recognition of compensation expense for all
tries outside the United States. The functional currency for stock-based compensation plans. As a result, salaries and
these foreign operations is generally the local currency. The general operating expenses for 2007 and 2006 include com-
value of the assets and liabilities of these operations is trans- pensation expense related to employee stock option plans and
lated into U.S. dollars at the rate of exchange in effect at the employee stock purchase plans. The Company utilized the
balance sheet date. Revenue and expense items are trans- modified prospective transition method in the adoption of FAS
lated at the average exchange rates effective during the year. 123R and compensation expense is recognized over the vesting
The resulting foreign currency translation gains and losses, as period (requisite service period), generally three years, under
well as offsetting gains and losses on hedges of net invest- the graded vesting method, whereby each vesting tranche of
ments in foreign operations, are reflected in accumulated the award is amortized separately as if each were a separate
other comprehensive income. Transaction gains and losses award. The compensation expense assumes a 4% annual for-
resulting from exchange rate changes on transactions feiture rate for employees who are not executive officers and
denominated in currencies other than the functional currency 1% annual forfeiture rate for executive officers.
are included in net income.
Accounting for Costs Associated with Exit or Disposal
Other Income Activities
Other income is recognized in accordance with relevant A liability for costs associated with exit or disposal activities, other
authoritative pronouncements and includes the following: than in a business combination, is recognized when the liability is
incurred. The liability is measured at fair value, with adjustments lishes a framework for measuring fair value under GAAP and
for changes in estimated cash flows recognized in earnings. enhances disclosures about fair value measurements. Fair
Consolidated Statements of Cash Flows value is defined as the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the
Cash and cash equivalents includes cash and interest-bearing principal or most advantageous market for the asset or liability
deposits, which generally represent overnight money market in an orderly transaction between two market participants on
investments of excess cash maintained for liquidity purposes. the measurement date. SFAS 157 is effective for financial
The Company maintains its cash balances principally at finan- statements issued for fiscal years beginning after November
cial institutions located in the United States and Canada. The 15, 2007. The adoption of SFAS 157 is not expected to have a
balances are not insured. Cash and cash equivalents include material effect on the Company’s financial statements. For
amounts at CIT Bank, a Utah industrial bank, which are only additional information on fair value of certain financial assets
available for the bank’s funding and investment requirements and liabilities, see “Fair Value of Financial Instruments” in this
pursuant to the bank’s charter. Cash inflows and outflows Note, and Note 19 – Fair Value of Financial Instruments.
from commercial paper borrowings and most factoring receiv-
ables are presented on a net basis in the Statements of Cash In February 2007, the FASB issued SFAS No. 159, “The Fair
Flows, as their original term is generally less than 90 days. Value Option for Financial Assets and Financial Liabilities”,
which permits entities to selectively elect fair value measure-
Cash receipts and cash payments resulting from purchases
ment for financial assets and liabilities. SFAS 159 is effective
and sales of loans, securities, and other financing and leasing
for financial statements issued for fiscal years beginning after
assets are classified as operating cash flows when these
November 15, 2007. The adoption of this standard is not
assets are originated/acquired and designated specifically for
expected to have a material effect on the Company’s financial
resale. Cash receipts resulting from sales of loans, beneficial
statements.
interests and other financing and leasing assets that were not
specifically originated/acquired and designated for resale are
NOTE 2 – FINANCE RECEIVABLES
classified as investing cash inflows.
The following table presents finance receivables by loans and
Accounting Pronouncements lease receivables and certain components thereto, as well as
PAGE 73
On December 4, 2007, the Financial Accounting Standards finance receivables previously securitized and still serviced
Board (FASB) issued SFAS No 141 (revised 2007), “Business by CIT.
Combinations” (SFAS 141R). SFAS 141R modifies the account-
December 31, (dollars in millions)
ing for business combinations and requires, with limited
2007
________________ 2006
________________
exceptions, the acquiring entity in a business combination to
recognize 100 percent of the assets acquired, liabilities Loans $51,591.0 $47,151.9
assumed, and any non-controlling interest in the acquiree at Leases 10,945.5
________________ 7,913.0
________________
the acquisition date fair value. In addition, SFAS 141R limits the Finance receivables $62,536.5 $55,064.9
________________
________________ ________________
________________
recognition of acquisition-related restructuring liabilities and
requires the following: the expensing of acquisition-related and Finance receivables securitized
and managed by CIT $ 6,311.2 $ 6,261.3
restructuring costs and the acquirer to record contingent con-
sideration measured at the acquisition date fair value. SFAS Unearned income $ (3,760.4) $ (3,501.9)
141R is effective for new acquisitions consummated on or after Equipment residual values $ 2,103.9 $ 1,937.7
January 1, 2009. Early adoption of SFAS 141R is not permitted. Leverage leases (1) $ 434.4 $ 496.3
The Company is currently evaluating the effect of this standard.
On December 4, 2007, the FASB also issued SFAS No. 160, Pledged or Encumbered Finance Receivables
“Noncontrolling Interests in Consolidated Financial Consumer (student lending) $ 9,079.4 $ 4,031.1
Statements” (SFAS 160). SFAS 160 requires all entities to Home Lending 7,074.3 –
report noncontrolling (i.e. minority) interests in subsidiaries as
equity in the Consolidated Financial Statements and to Trade Finance (factoring) 5,279.7 –
account for transactions between an entity and noncontrolling Other(2) 2,123.4
________________ 280.5
________________
owners as equity transactions if the parent retains its control- Finance receivables pledged or
ling financial interest in the subsidiary. SFAS 160 also requires encumbered $23,556.8
________________ $ 4,311.6
________________
________________ ________________
expanded disclosure that distinguishes between the interests
of a parent’s owners and the interests of a noncontrolling (1) Leveraged leases are presented net of third party non-recourse
owners of a subsidiary. SFAS 160 is effective for the Company’s debt payable of $625.9 million and $860.3 million at
December 31, 2007 and 2006.
financial statements for the year beginning on January 1, 2009
and early adoption is not permitted. The adoption of SFAS 160 (2) Other includes $1.5 billion of acquisition financing, a secured
is not expected to have a material impact on the Company’s borrowing related to an energy finance project and financing
(related to $262 million of commercial loans) executed via total
financial condition and results of operations.
return swap, under which CIT retains control of, and the full risk
In September 2006, the FASB issued SFAS No. 157, “Fair Value related to, these loans.
Measurements” (SFAS 157). SFAS 157 defines fair value, estab-

The following table sets forth the contractual maturities of finance receivables by respective fiscal period.
2007
___________________________________________ 2006
___________________________________________
Due Within Year:
1 $13,972.6 22.3% $12,709.7 23.1%
2 6,560.1 10.5% 4,879.2 8.9%
3 5,950.7 9.5% 4,371.9 7.9%
4 5,679.1 9.1% 3,563.2 6.5%
5 5,324.3 8.5% 4,147.9 7.5%
Thereafter 25,049.7
_________________ 40.1%
_________________ 25,393.0
_________________ 46.1%
_________________
Total $62,536.5
_________________ 100.0%
_________________ $55,064.9
_________________ 100.0%
_________________
The following table sets forth certain information regarding The following table contains information on finance receiv-
non-performing assets. Non-performing assets reflect both ables evaluated for impairment and the related reserve for
finance receivables on non-accrual status (primarily finance credit losses. The Company excludes homogenous type loans
receivables that are ninety days or more delinquent) and such as home loans and other consumer loans, small-ticket
assets received in satisfaction of loans (repossessed assets). loans and lease receivables, short-term factoring customer
finance receivables and certain other receivables from its uni-
verse of receivables evaluated for impairment as described in
2007
______________ 2006
______________
Note 1. Non-performing home lending and consumer bal-
Non-accrual finance receivables $1,162.7 $662.0
ances totaled $900.8 million, $454.1 million and $214.0 million
Assets received in satisfaction at December 31, 2007, 2006 and 2005. The reserve for credit
PAGE 74
of loans 215.8
______________ 108.5
______________ losses at December 31, 2007, 2006 and 2005 includes approxi-
Total non-performing assets $1,378.5
______________ $770.5
______________ mately $250 million, $168 million, and $137 million for home
______________ ______________
lending and manufactured housing.
Percentage of finance receivables 2.20%
______________ 1.40%
______________
______________ ______________
At or for the Years Ended December 31, (dollars in millions)

2007
___________ 2006
___________ 2005
___________
Finance receivables considered for impairment $249.7 $261.0 $302.5
Impaired finance receivables with allowance(1) $145.1 $131.0 $229.7
Allowance (1) $ 52.1 $ 53.4 $ 76.5
Impaired finance receivables with no specific allowance(2) $104.6 $130.0 $ 72.8
Average monthly investment in impaired finance receivables $219.4 $337.6 $315.5
(1) Impaired finance receivables are those loans whose estimated fair value is less than the current recorded value. The allowance is the differ-
ence between these two amounts.
(2) In these cases, the expected proceeds from collateral liquidation and cash flow sources is sufficient to recover receivable balances.
On June 30, 2007 the Company determined that its home lend- market from assets held for sale to assets held for invest-
ing receivables portfolio no longer qualified as assets held for ment. A valuation charge of $465.5 million pretax was
investment. Accordingly, approximately $11.3 billion of unpaid recorded to reduce the portfolio to lower of cost or market
principal balance was transferred to assets held for sale and value, on a loan by loan basis, prior to transfer to held for
reduced to the lower of cost or market, resulting in a pretax investment. The portion of the accumulated valuation
charge of $765.3 million. Subsequently, management deter- allowance related to loans transferred from held for sale to
mined an orderly run-off of a substantial portion of the held for investment is accounted for as a discount and is
Company’s home lending receivables portfolio, rather than a accreted into earnings over the contractual life of the assets
sale was preferable and $9.7 billion in then remaining unpaid using the level yield method.
principal balance (UPB) was transferred at the lower of cost or
Consistent with management’s determination to hold certain modified at some point in the account history, and home equity
assets for the foreseeable future, the Company has segre- lines of credit. Management has both the ability and intent to
gated $7.2 billion UPB of the $9.7 billion portfolio in a hold over their remaining lives the entire $9.7 billion of home
bankruptcy-remote vehicle and issued $5.2 billion of securi- lending assets transferred to held for investment and to liqui-
ties as on-balance sheet, non-recourse secured financings. date them in accordance with their contractual terms.
These financing transactions encumber the assets for their
The securities in the on-balance sheet financing (securitiza-
remaining lives, as the terms of the securitizations do not per-
tion) transactions described above were structured into
mit the Company to withdraw assets from the securitization
separate credit tranches and rated AAA through BBB-. The
vehicles or to substitute comparable assets. The majority of
$5.2 billion private placement of securities sold to investors
the remaining $2.5 billion portfolio transferred to held for
was comprised entirely of the AAA components of the
investment at September 30, 2007 was comprised of re-per-
structure.
forming first liens, which had either been delinquent or
NOTE 3 – RESERVE FOR CREDIT LOSSES

The following table presents changes in the reserve for credit losses.
At or for the Years Ended December 31, (dollars in millions)
2007
____________ 2006
____________ 2005
____________
Balance, beginning of period $ 659.3
____________ $ 621.7
____________ $ 617.2
____________
Provision for credit losses 593.8 245.2 182 .4
Provision for credit losses – specific reserving actions (1) – (23.0) 34.6
Reserves relating to receivables transferred to held for sale (227.8) – –
Reserves applied to acquisitions and other (2) 69.2
____________ 40.4
____________ 38.6
____________
PAGE 75
Net additions to the reserve for credit losses 435.2
____________ 262.6
____________ 255.6
____________
Charged-off – finance receivables (355.9) (322.9) (328.7)
Recoveries on finance receivables previously charged-off 92.9
____________ 97.9
____________ 77.6
____________
Net credit losses (263.0)
____________ (225.0)
____________ (251.1)
____________
Balance, end of period $ 831.5
____________
____________ $ 659.3
____________
____________ $ 621.7
____________
____________
Reserve for credit losses as a percentage of finance receivables 1.33% 1.20% 1.40%
Reserve for credit losses, excluding reserves related to impaired loans,
as a percentage of finance receivables excluding guaranteed student
loans and home lending(3) 1.22% 1.19% 1.24%
(1) The 2005 amount relates to a specific reserve for credit losses for estimated incurred losses associated with hurricanes Katrina and Rita.
During 2006 that reserve was re-assessed regarding the projected amounts required to cover remaining exposures related to the hurricanes.
As result, approximately $23.0 million was released from the specific reserve and provisioned to other components of the reserve for credit
losses.
(2) Amounts reflect reserves established for estimated losses inherent in portfolios acquired through purchases or business combinations, as
well as foreign currency translation adjustments.
(3) Loans guaranteed by the U.S. government are excluded from the calculation.
NOTE 4 – OPERATING LEASE EQUIPMENT December 31, (dollars in millions)

The following table provides an analysis of the net book value 2007
________________ 2006
________________
(net of accumulated depreciation of $2.8 billion at December Commercial aircraft (including
31, 2007 and $2.5 billion at December 31, 2006) of operating regional aircraft) $ 7,190.0 $ 6,283.7
lease assets, by equipment type. Railcars and locomotives 3,784.7 3,470.1
Information technology 262.7 332.3
Office equipment 453.4 253.0
Communications 231.8 211.6
Medical equipment, machinery
and other 687.9
________________ 467.2
________________
Total (1) $12,610.5
________________ $11,017.9
________________
________________ ________________
(1) Includes equipment off lease of $396.8 million and $159.1 million
at December 31, 2007 and 2006.

Rental income on operating leases, which is included in Years Ended December 31, (dollars in millions)
finance revenue, totaled $2.0 billion, $1.8 billion and $1.5 bil- 2007
______________
lion for the years ended December 31, 2007, 2006 and 2005. 2008 $1,635.6
The following table presents future minimum lease rentals 2009 1,285.3
due on non-cancelable operating leases at December 31,
2007. Excluded from this table are variable rentals calculated 2010 913.4
on the level of asset usage, re-leasing rentals, and expected 2011 638.5
sales proceeds from remarketing operating lease equipment 2012 424.8
at lease expiration, all of which are components of operating
Thereafter 833.3
______________
lease profitability.
Total $5,730.9
______________
______________
NOTE 5 – CONCENTRATIONS
The following table summarizes the geographic and industry compositions (by obligor) of financing and leasing portfolio assets.
Geographic 2007
_______________________________________________ 2006
_______________________________________________
Northeast $14,530.2 18.9% $12,715.5 18.7%
West 12,893.0 16.7% 12,113.2 17.9%
Midwest 12,769.5 16.6% 11,994.2 17.7%
Southeast 10,209.1 13.3% 10,079.1 14.8%
Southwest 6,659.0
________________ 8.7%
________________ 6,642.1
________________ 9.8%
________________
Total U.S. 57,060.8 74.2% 53,544.1 78.9%
PAGE 76
Canada 4,841.1 6.3% 3,823.3 5.6%

Other international 15,016.9
________________ 19.5%
________________ 10,534.5
________________ 15.5%
________________
Total $76,918.8
________________ 100.0%
________________ $67,901.9
________________ 100.0%
________________
________________ ________________ ________________ ________________
Industry 2007
_______________________________________________ 2006
_______________________________________________
Student lending(1) $11,584.9 15.1% $ 8,772.7 12.9%

Manufacturing(2) 9,923.5 12.9% 8,383.3 12.3%
Home mortgage (3)(6) 9,010.4 11.7% 10,087.8 14.9%
Commercial airlines (including regional airlines) 8,625.8 11.2% 7,344.0 10.8%
Retail (4) 7,225.6 9.4% 6,759.0 10.0%
Service industries 5,282.7 6.9% 3,966.4 5.8%
Healthcare 4,223.1 5.5% 3,388.4 5.0%
Transportation(5) 3,138.8 4.1% 3,063.9 4.5%
Wholesaling 1,889.9 2.5% 2,485.0 3.7%
Communications 1,625.3 2.1% 1,367.0 2.0%
Other (no industry greater than 2.0%) 14,388.8
________________ 18.6%
________________ 12,284.4
________________ 18.1%
________________
Total $76,918.8
________________ 100.0%
________________ $67,901.9
________________ 100.0%
________________
________________ ________________ ________________ ________________
(1) In late 2007, we ceased originating new private student loans. However, the portfolio is expected to grow approximately $200 million in 2008
due to existing funding commitments. Loans to students at the top 5 institutions represent approximately 50% of the portfolio at December 31,
2007. Includes amounts financed to students of a private pilot training school that filed for bankruptcy in 2008. See Note 27 for additional infor-
mation.
(2) Includes manufacturers of apparel (1.7%), followed by food and kindred products, steel and metal products, transportation equipment, indus-
trial machinery and equipment, electronic equipment, textiles, printing and other industries.
(3) Includes receivables from consumers for products in manufactured housing.
(4) Includes retailers of apparel (3.7%) and general merchandise (3.6%).
(5) Includes rail, bus, over-the-road trucking industries and business aircraft.
(6) Geographic concentrations by region for home lending include $2.0 billion northeast, $1.6 billion midwest, $2.7 billion west, $2.0 billion south-
east and $0.7 billion southwest. The top 5 states include California, Florida, New York, Illinois, and Texas.
NOTE 6 – RETAINED INTERESTS IN SECURITIZATIONS The following table summarizes the net accretion recognized
The Company securitizes loans that may be serviced by the in pretax earnings, the related impairment charges, and unre-
Company or the other parties. With each securitization, the alized after-tax gains, reflected as a part of accumulated other
company may retain all or a portion of the securities, subordi- comprehensive income.
nated tranches, interest-only strips and in some cases, cash Years Ended December 31, (dollars in millions)
reserve accounts, all of which constitute retained interests.
2007
_________ 2006
_________ 2005
_________
Retained interests in securitizations are designated as avail-
able for sale and include the following: Net accretion in pre-tax
earnings $87.7 $95.7 $62.5
December 31, (dollars in millions) Impairment charges, included
2007
______________ 2006
______________ in net accretion $20.7 $ 2.1 $39.4
Retained interests in
Unrealized after tax gains $ 7.8 $18.4 $17.0
loans other than home lending:
Retained subordinated
securities(1) $ 582.4 $ 304.3
Interest-only strips 426.0 395.5
Cash reserve accounts 251.0
______________ 318.7
______________
Sub-total 1,259.4
______________ 1,018.5
______________
Retained interests in Home
Lending loans:
Retained subordinated securities 26.4 34.8
Interest-only strips 4.1
______________ 6.1
______________
Sub-total 30.5
______________ 40.9
______________
Total retained interests in
PAGE 77
securitizations $1,289.9
______________
______________ $1,059.4
______________
______________
(1) 2007 balance includes $81.9 million retained interests in a
healthcare real estate investment trust and $6.8 million in a col-
lateralized loan obligation.

The following table summarizes the key assumptions used in rate which expresses payments as a function of the declining
measuring the retained interest carrying value of the securiti- amount of loans at a compound annual rate. Weighted average
zation transactions outstanding at the end of 2007. Weighted expected credit losses are expressed as annual loss rates:
average prepayment speed is based on a constant prepayment
Home
Consumer Small Lending and Recreational
Technology Vendor Business Manufactured Vehicles
Leases ________________________
________________________ Finance ________________________
Lending Housing
________________________ and Boats
________________________
Weighted-average life (in years) 1.4 1.4 3.7 3.9 2.4
Weighted average prepayment speed 44.50% 8.70% 16.89% 20.54% 21.50%
Impact on fair value of 10% adverse change $ (34.3) $ (0.6) $ (1.4) $ (1.1) $ –
Impact on fair value of 20% adverse change (63.5) (1.2) (2.7) (2.3) –
Weighted average expected credit losses(1) – 0.93% 2.48% 0.80% 1.64%

Impact on fair value of 10% adverse change $ – $ (4.1) $ (2.3) $ (1.1) $ (0.2)
Impact on fair value of 20% adverse change – (8.2) (4.7) (2.3) (0.4)
Weighted average discount rate 8.20% 9.09% 14.00% 13.00% 15.00%

Impact on fair value of 10% adverse change $ (7.7) $ (4.6) $ (0.5) $ (0.8) $ –
Impact on fair value of 20% adverse change (15.2) (9.0) (0.9) (1.5) (0.1)
Retained subordinated securities $210.3 $ 233.7 $ 49.6 $ 26.4 $ –

Interest only securities 368.4 52.2 5.4 4.1 –
Cash reserve accounts 142.8
________________ 89.3
________________ 11.5
________________ –
________________ 7.5
________________
PAGE 78
Carrying value $721.5

________________ $ 375.2
________________ $ 66.5
________________ $ 30.5
________________ $ 7.5
________________
________________ ________________ ________________ ________________ ________________
The following summarizes the key assumptions used in measuring the retained interests as of the date of securitization for trans-
actions completed in 2007.
Weighted average prepayment speed 37.39% 9.06% 16.76% No activity No activity
Weighted average expected credit losses(1) 0.00% 0.67% 2.27% No activity No activity
Weighted average discount rate 8.63% 9.00% 14.00% No activity No activity

Weighted average life (in years) 1.47 1.69 3.88 No activity No activity
(1) The weighted average expected credit losses with respect to Consumer Technology Leases are zero, based on a contractual recourse agree-
ment with a third party originator of these assets.
These sensitivities are hypothetical and should be used with assumption on the fair value of the retained interest is calcu-
caution. Changes in fair value based on a 10 percent or lated without giving effect to any other assumption changes. In
20 percent variation in assumptions generally cannot be reality, changes in one factor may result in changes in another
extrapolated because the relationship of the change in (for example, increases in market interest rates may result in
assumptions to the change in fair value may not be linear. lower prepayments and increased credit losses), which might
Also, in this table, the effect of a variation in a particular magnify or counteract the sensitivities.
The following table summarizes static pool credit losses for projected future credit losses, divided by the original balance
public securitizations by year of issuance. Static pool credit of each of the respective asset pools in the securitizations.
losses represent the sum of actual losses (life-to-date) and There was no public securitization consummated in 2007.
2007
______________ 2006
______________ 2005
______________
Actual and projected losses at:
December 31, 2007 N/A 1.15% 1.12%
December 31, 2006 0.97% 1.42%
December 31, 2005 1.54%
The table that follows summarizes the roll-forward of retained interest balances and cash flows received from and paid to securiti-
zation trusts.
Years Ended December 31, (dollars in millions)
2007
______________ 2006
______________ 2005
______________
Retained Interests
Retained interest at beginning of period $1,059.4 $1,136.4 $1,155.6
New sales 967.2 634.4 683.0
Distributions from trusts (769.1) (817.7) (797.6)
Change in fair value (39.8) 2.3 13.7
Other, including net accretion, and clean-up calls 72.2
______________ 104.0
______________ 81.7
______________
Retained interest at end of period $1,289.9
______________ $1,059.4
______________ $1,136.4
______________
______________ ______________ ______________
Cash Flows During the Periods
PAGE 79
Proceeds from new securitizations $3,380.1 $2,943.8 $3,543.9
Other cash flows received on retained interests 769.1 817.7 788.4
Servicing fees received 60.2 64.4 67.8
Reimbursable servicing advances, net 10.3 6.6 12.9
Repurchases of delinquent or foreclosed assets and ineligible contracts (11.3) (13.8) (11.6)
Purchases of contracts through clean-up calls (113.6) (310.4) (320.5)
Guarantee draws –
______________ (1.4)
______________ (2.2)
______________
Total, net $4,094.8
______________ $3,506.9
______________ $4,078.7
______________
______________ ______________ ______________

The following table presents net charge-offs and accounts past due 60 days or more, on both an owned portfolio basis and managed
receivable basis.
At or for the year ended December 31, (dollars in millions)
2007
__________________________________ 2006
__________________________________ 2005
__________________________________
Net Charge-offs of Finance Receivables
Commercial $ 126.9 0.32% $ 119.5 0.36% $174.0 0.57%
Consumer 136.1
______________ 0.76% 105.5
______________ 0.64% 77.0
______________ 0.75%
Total $ 263.0
______________
______________ 0.45% $ 225.0
______________
______________ 0.45% $251.0
______________
______________ 0.60%
Net Charge-offs of Managed Receivables
Commercial $ 158.3 0.35% $ 144.0 0.37% $206.2 0.55%
Consumer 163.3
______________ 0.85% 142.4
______________ 0.82% 128.3
______________ 1.10%
Total $ 321.6
______________
______________ 0.50% $ 286.4
______________
______________ 0.50% $334.5
______________
______________ 0.68%
Finance Receivables Past Due 60 Days or More
Commercial $ 611.7 1.47% $ 443.9 1.23% $402.0 1.32%
Consumer 1,562.9
______________ 7.71% 878.0
______________ 4.65% 356.2
______________ 2.59%
Total $2,174.6
______________
______________ 3.43% $1,321.9
______________
______________ 2.40% $758.2
______________
______________ 1.71%
Managed Receivables Past Due 60 Days or More
Commercial $ 803.4 1.68% $ 581.1 1.23% $509.7 1.34%
Consumer 1,632.1
______________ 7.40% 946.7
______________ 4.66% 455.7
______________ 2.98%
Total $2,435.5
______________ 3.42% $1,527.8
______________ 2.42% $965.4
______________ 1.81%
______________ ______________ ______________
PAGE 80
NOTE 7 – OTHER ASSETS NOTE 8 – DEBT

The following table presents the components of other assets. Commercial Paper
December 31, (dollars in millions) The following table presents data on commercial paper
2007
______________ 2006
______________ borrowings.
Receivables from derivative At or for the year ended December 31, (dollars in millions)
counterparties $1,097.0 $ 540.5
2007
______________ 2006
______________
Deposits on commercial
At year end:
aerospace flight equipment 821.7 719.0
Borrowing outstanding $2,822.3 $5,365.0
Accrued interest and dividends 703.5 520.9
Weighted average
Investments in and receivables
interest rate 5.59% 5.33%
from non-consolidated
subsidiaries 233.8 535.7 Weighted average
number of days
Repossessed assets and
to maturity 23 days 57 days
off-lease equipment 226.6 124.1
For the year ended:
Equity and debt investments 294.3 46.3
Daily average borrowings $5,171.8 $4,757.9
Furniture and fixtures 190.8 172.1
Maximum amount
Prepaid expenses 131.4 99.2
outstanding $7,131.4 $6,094.3
Miscellaneous receivables
Weighted average
and other assets 1,392.7
______________ 984.5
______________ interest rate 5.40% 5.03%
$5,091.8
______________ $3,742.3
______________
______________ ______________
Variable and Fixed-rate Senior Unsecured Notes available under a euro medium-term notes program, under
The consolidated weighted average interest rates on variable- which CIT may issue debt securities and other capital market
rate senior notes at December 31, 2007 and December 31, securities in multiple currencies. In addition, CIT maintains an
2006 were 5.09% and 5.32%, respectively. Fixed-rate senior effective shelf registration with the SEC for the issuance of
debt outstanding at December 31, 2007 matures at various senior and subordinate debt, and other capital market securi-
dates through 2036. The consolidated weighted-average inter- ties that does not require a specific limit under SEC rules. The
est rates on fixed-rate senior debt at December 31, 2007 and following table represents information on unsecured commit-
December 31, 2006 were 5.30% and 5.28%, respectively. ted lines of credit at December 31, 2007, that can be drawn
Foreign currency-denominated debt (stated in U.S. Dollars) upon to support U.S. commercial paper borrowings.
totaled $9,731.4 million at December 31, 2006, of which (dollars in millions)
$7,121.1 million was fixed-rate and $2,610.3 million was vari- Expiration Total
________________ Drawn
________________ Available
________________
able-rate. Foreign currency-denominated debt (stated in U.S. October 14, 2008(1) $2,100.0 $ – $2,100.0
Dollars) totaled $10,580.0 million at December 31, 2007, of
which $7,602.7 million was fixed-rate and $2,977.3 million was April 14, 2009 2,100.0 – 2,100.0
variable-rate. April 13, 2010 2,100.0 – 2,100.0
The following tables present total variable-rate and fixed-rate December 6, 2011 1,000.0
________________ –
________________ 1,000.0
________________
term debt. Total credit lines $7,300.0
________________ $ –
________________ $7,300.0
________________
________________ ________________ ________________
December 31, (dollars in millions) (1) CIT has the ability to issue up to $400 million of letters of credit
Variable-Rate Term Debt 2007
________________ 2006
________________ under the $2.1 billion facility expiring in 2008, which, if utilized,
Due in 2007 $ – $ 5,103.4 reduces available borrowings under this facility.
Due in 2008(1) 7,377.0 6,367.9
Due in 2009 5,956.4 3,890.6 The credit line agreements contain clauses that permit exten-
Due in 2010 1,918.8 819.9 sions beyond the expiration dates upon written consent from
Due in 2011 2,238.6 1,930.4 the participating lenders. In addition to the above lines, CIT
PAGE 81
has undrawn, unsecured committed lines of credit of $175.5
Due in 2012 1,052.1 302.1
million, which supports the Australia commercial paper pro-
Due after 2012 1,345.3
________________ 770.0
________________ gram. Certain foreign operations utilize local financial
Total $19,888.2
________________ $19,184.3
________________ institutions to fund operations. At December 31, 2007, local
________________ ________________
committed credit facilities totaled $495.6 million, of which
(1) CIT has $1.175 billion of AAA rated and $150 million of AA rated
$250.9 million was undrawn and available. CIT also has a $750
auction rate securities outstanding linked to seasoned student
loan securitizations that reset every 28 days. Failed note auctions
million, five-year letter of credit facility, primarily in conjunc-
result in the Company paying an average rate of LIBOR plus 1.5% tion with the factoring business. As of December 31, 2007,
on the AAA rated securities and LIBOR plus 2.5% on the AA rated $308.0 million was undrawn and available under this facility.
securities.
The Company’s unsecured notes are issued under indentures
Fixed-Rate Term Debt 2007
________________ 2006
________________ containing certain covenants and restrictions on CIT. Among
Due in 2007 $ – $ 4,163.4 the covenants, which also apply to the credit agreements, is a
negative pledge provision that limits the granting or permit-
Due in 2008 (rates ranging
ting of liens on the assets owned by the holding company. In
from 2.70% to 10.48%) 2,730.5 2,664.6
addition, the credit agreements also contain a requirement
Due in 2009 (rates ranging that CIT maintain a minimum net worth of $4.0 billion.
from 3.35% to 10.48%) 1,785.9 1,410.6
Due in 2010 (rates ranging Non-recourse secured borrowings
from 2.75% to 10.48%) 3,346.3 3,069.0 Capital markets volatility in the second half of 2007 reduced
Due in 2011 (rates ranging the Company’s use of the unsecured debt and commercial
from 4.25% to 10.48%) 3,787.2 3,461.7 paper markets. A higher proportion of funding was completed
through the asset-backed markets. The Company raised
Due in 2012 (rates ranging
from 3.80% to 10.48%) 3,670.6 1,895.2 approximately $13.5 billion of proceeds during the year from
on-balance sheet financings including: $5.2 billion collateral-
Due after 2012 (rates ranging
ized by home loans, $5.5 billion collateralized by student
from 4.45% to 7.80%) 14,157.1
________________ 12,442.6
________________ loans, $1.3 billion collateralized by factoring receivables and
Total $29,477.6
________________ $29,107.1
________________ $1.6 billion secured by equipment loans and leases. These
________________ ________________
transactions do not meet the accounting (SFAS 140) require-
ments for sales treatment and are therefore recorded as
CIT maintains registration statements with the Securities and non-recourse secured borrowings, with the proceeds reflected
Exchange Commission (SEC) covering debt securities that the in Non-recourse, secured borrowings in the Consolidated
Company may sell in the future. At December 31, 2007, 4 bil- Balance Sheet. The student lending business (“Student Loan
lion euros of registered but unissued debt securities were Xpress”), is funded partially with Education Loan Backed

Notes. Certain cash balances are restricted in conjunction of the quotient of (x) our earnings (excluding income taxes,
with the student lending borrowings. interest expense, extraordinary items, goodwill impairment
and amounts related to discontinued operations) and (y) inter-
The following table summarizes the secured borrowings. The
est expense plus preferred dividends, divided by (b) four. The
consolidated weighted average interest rate on these secured
average fixed charge ratio was below 1.10 at December 31,
borrowings at December 31, 2007 was 5.63%. Amounts do not
2007. Notwithstanding the foregoing, CIT may pay such inter-
include non-recourse borrowings related to leveraged lease
est to the extent of any net proceeds that we have received
transactions.
from the sale of common stock during the 90 days prior to the
December 31, (dollars in millions) 180 days prior to the interest payment date.
2007
________________ 2006
________________
Mandatory Convertible Debt
Due in 2007 $ – $1,002.8
In October 2007, the Company issued 27.6 million mandatorily
Due in 2008 2,546.4 2.8 convertible equity units with a stated amount of $25 each, for
Due in 2009 1,154.4 274.9 proceeds totaling $690 million. Each equity unit consists of a
Due in 2010 781.8 – contract to purchase CIT common stock and a 2.5% beneficial
ownership interest in a $1,000 principal amount senior note
Due in 2011 640.3 –
due November 15, 2015. The Company is obligated to pay
Due in 2012 511.2 – holders of the equity units quarterly at a rate of 0.25% per year
Due after 2012 11,796.2
________________ 3,118.0
________________ of the stated amount of $25, or $0.0625 per year. Under the
Total $17,430.3 $4,398.5 purchase contract, holders are required to purchase CIT com-
________________
________________ ________________
________________
mon stock no later than November 17, 2010. The equity units
are convertible into common stock at any time prior to
November 17, 2010 at the option of the holder. Until settle-
Junior Subordinated Notes ment of a purchase contract, the shares of CIT stock
During 2007, the Company issued $750 million junior subordi- underlying each purchase contract are not outstanding, and
nated notes. Interest on the notes will accrue from and the holder of the purchase contract is not entitled to any voting
PAGE 82
including the original issue date up to, but not including, rights, rights to dividends or other distributions or other rights
March 15, 2017 at a fixed rate equal to 6.10% per year, payable of a holder of our common stock by virtue of holding such pur-
semi-annually in arrears on March 15 and September 15 of chase contract.
each year. Subsequently, interest on the notes will accrue at an On the purchase date, the market price per share of common
annual rate equal to three-month LIBOR plus a margin equal stock in relation to the reference price will determine how
to 1.815% (181.5 basis points), payable quarterly in arrears on many shares of stock each equity unit holder will receive. The
March 15, June 15, September 15 and December 15 of each shares to be delivered will be based on the following conver-
year, commencing on June 15, 2017. The notes will be subordi- sion table:
nate in right of payment of all senior and subordinated
indebtedness and will be effectively subordinated to all indebt- Applicable Market Value
of Common Shares
_____________________________________________________ Conversion Rate
____________________________
edness of CIT subsidiaries, except for any indebtedness that
explicitly ranks on parity with these notes. Less than or equal to $34.98 0.7147 shares
Between $34.98 and $42.00 # of shares =
The terms of the outstanding junior subordinated notes
$25.00 divided
restrict the Company’s ability to pay dividends on common by market value
stock if and so long as CIT does not pay all accrued and unpaid
Equal to or greater than $42.00 0.5952 shares
interest on its junior subordinated notes, in full when due.
Further, CIT is prohibited from paying interest on the junior
subordinated notes if, among other things, the average four
quarters fixed charge ratio is less than or equal to 1.10 on the
thirtieth day prior to the interest payment date. The average
four quarters fixed charge ratio is defined as (a) the sum, for
the Company’s most recently completed four fiscal quarters,
NOTE 9 – DEPOSITS
The following table presents data on deposit balances.
2007
________________________ 2006
________________________
Deposits Outstanding at December 31, $2,745.8 $2,399.6
Weighted average interest rate 5.37% 5.33%
Weighted average number of days to maturity 504 days 580 days
2007
________________________ 2006
________________________
Daily average deposits for the years ended December 31, $3,151.3 $1,326.4
Maximum amount outstanding $3,451.4 $2,399.6
Weighted average interest rate for the year 4.90% 5.08%
December 31, December 31,

2007
________________________ 2006
________________________
Due in 2007 $ – $ 905.9
Due in 2008 (weighted average rate 5.43%) 1,397.1 945.3
Due in 2009 (weighted average rate 5.32%) 729.1 352.6
Due after 2012 (weighted average rate 5.37%) 104.0
________________________ –
________________________
Total $2,745.8 $2,399.6
PAGE 83
________________________
________________________ ________________________
________________________
NOTE 10 – DERIVATIVE FINANCIAL INSTRUMENTS offsetting swaps with financial institutions) in connection with
Upon executing a derivative contract, the Company designates certain lending arrangements. In addition, the Company uti-
the derivative as either held for trading, an economic hedge lizes credit derivatives to manage the credit risk associated
not designated as a SFAS 133 hedge, or a qualifying SFAS 133 with its loan portfolio. For additional information see Note 1
hedge. The designation may change based upon manage- Summary of Significant Accounting Policies.
ment’s reassessment or changing circumstances. Derivatives The fair value of the Company’s derivative contracts is
utilized by the Company principally include swaps and forward reflected net of cash paid or received pursuant to credit sup-
settlement contracts. A swap agreement is a contract port agreements and is reported on a net-by-counterparty
between two parties to exchange cash flows based on speci- basis in the Company’s consolidated statements of financial
fied underlying notional amounts, assets and/or indices. condition when management believes a legal right of setoff
Financial forward settlement contracts are agreements to buy exists under an enforceable netting agreement. The fair value
or sell a quantity of a financial instrument, index, currency or of derivative financial instruments, computed in accordance
commodity at a predetermined future date, and rate or price. with the Company’s netting policy by counterparty, is set forth
CIT also executes interest rate swaps with customers (and below:

2007
_____________________________________________ 2006
_____________________________________________
Assets
_________________ Liabilities
_________________ Assets
_________________ Liabilities
_________________
Interest rate swaps $ 199.3 $(294.8) $134.1 $(273.8)
Cross currency swaps 862.5 (7.0) 368.0 (6.3)
Foreign currency forward exchange contracts 0.6 (298.7) 15.5 (79.6)
Commodity swap –
_________________ –
_________________ 6.3
_________________ –
_________________
Derivatives qualifying as SFAS 133 hedges 1,062.4 (600.5) 523.9 (359.7)
Non-qualifying derivatives 34.6
_________________ (65.3)
_________________ 16.6
_________________ (20.0)
_________________
Total $1,097.0
_________________ $(665.8)
_________________ $540.5
_________________ $(379.7)
_________________
_________________ _________________ _________________ _________________

The following table presents additional information regarding qualifying SFAS 133 hedges, specifically the notional principal value of
interest rate swaps by class and the corresponding hedged positions.
2007 2006 Hedge
Notional
________________ Notional
________________ Hedged Item
_________________________________________________________________________________________________________________________ Classification
________________________
Variable rate to fixed rate swaps(1)
$ 9,744.8 $ 9,435.7 Cash flow variability associated with specific variable-rate debt Cash flow
1,796.9
________________ 2,663.5
________________ Cash flow variability related to forecasted commercial paper issuances Cash flow
$11,541.7
________________
________________ $12,099.2
________________
________________
Fixed rate to variable rate swaps(2)
$12,920.9
________________ $14,026.0
________________ Specific fixed rate debt Fair value
________________ ________________
(1) CIT pays a fixed rate of interest and receives a variable rate of interest. These swaps hedge the cash flow variability associated with forecasted
commercial paper and specific variable rate debt.
(2) CIT pays a variable rate of interest and receives a fixed rate of interest. These swaps hedge specific fixed rate debt instruments.
The following table presents the notional principal amounts of cross-currency swaps by class and the corresponding hedged positions.
Hedge
2007
______________ 2006
______________ Hedged Item
_________________________ Classification
______________________________ Description
__________________________________________________________________________________________
$4,026.5 $3,905.5 Foreign Foreign currency CIT pays a U.S. variable rate of interest and receives a
denominated fair value variable foreign rate of interest. These swaps hedge
PAGE 84
debt the fair value changes in foreign currency associated

with specific foreign denominated debt and are
designated as foreign currency fair value hedges.
249.5 249.5 Foreign Foreign currency CIT pays a U.S. fixed rate of interest and receives a
denominated cash flow fixed foreign rate of interest. These swaps hedge the
fixed-rate debt currency and interest rate cash flow variability
associated with payments on specific foreign denomi-
nated fixed rate debt and are designated as foreign

currency cash flow hedges.
27.6 115.3 Foreign currency Foreign currency CIT receives a U.S. fixed rate of interest and pays a
loans to cash flow fixed foreign rate of interest. These swaps hedge the
subsidiaries currency cash flow variability associated with
payments on specific fixed-rate foreign denominated
inter-company receivables and are designated as
foreign currency cash flow hedges.
– 4.9 Foreign currency Foreign currency CIT receives a U.S. variable rate of interest and pays a
loans to fair value variable foreign rate of interest. These swaps hedge
subsidiaries the fair value currency changes associated with
specific foreign denominated variable rate inter-
company receivables and are designated as foreign
______________ ______________ currency fair value hedges.
$4,303.6
______________ $4,275.2
______________
______________ ______________
CIT sells various foreign currencies forward. These contracts The following table presents the notional principal amounts of
are designated as either cash flow hedges of specific foreign foreign currency forward exchange contracts and the corre-
denominated inter-company receivables or as net investment sponding hedged positions.
hedges of foreign denominated investments in subsidiaries.
2007
______________ 2006
______________ Hedged Item
_________________________________________________________________________________________ Hedge Classification
_______________________________________________________
$1,394.4 $ 904.1 Foreign currency loans to subsidiaries Foreign currency cash flow
3,853.8
______________ 4,205.9
______________ Foreign currency equity investments in subsidiaries Foreign currency net investment
$5,248.2
______________ $5,110.0
______________
______________ ______________
The table that follows summarizes the nature and notional customer derivative programs at December 31, 2007. CIT has
amount of economic hedges that do not qualify for hedge also extended $3.2 billion in interest rate caps in connection
accounting under SFAS 133. with its customer derivative program. The notional amounts of
derivatives related to the customer program include both
derivative transactions with CIT customers, as well as offset-
2007 2006 ting transactions with third parties with like notional amounts
Notional
________________ Notional
_______________ Type of Swaps/Caps
_____________________________________________________________ and terms.
$17,564.1 $1,365.1 Interest rate swaps
CIT also has certain cross-currency swaps, certain U.S. and
349.6 307.0 Cross-currency swaps Canadian dollar interest rate swaps, and interest rate caps
254.4 213.0 Foreign exchange forward contracts that are economic hedges of certain interest rate and foreign
currency exposures.
3,184.1 946.8 Interest rate caps
PAGE 85
168.0 128.0 Credit default swaps CIT has entered into credit default swaps, with terms of 5
________________ _______________
years, to economically hedge certain CIT credit exposures.
$21,520.2
________________ $2,959.9
_______________
________________ _______________ In addition to the amount in the preceding table, CIT had
$2.0 billion and $1.2 billion in notional amount of interest rate
swaps outstanding with securitization trusts at December 31,
The U.S. dollar interest rate swaps included in the table above 2007 and 2006 to protect the trusts against interest rate risk.
relates to the following: (1) $11.6 billion in notional amount of CIT entered into offsetting swap transactions with third parties
interest rate swaps executed in conjunction with the third totaling $2.0 billion and $1.2 billion in notional amount at
quarter on balance sheet securitization of home lending December 31, 2007 and 2006 to insulate the Company from
receivables, whereby CIT entered into offsetting swap transac- the related interest rate risk.
tions with the bankruptcy remote securitization trust formed Hedge ineffectiveness occurs in certain cash flow hedges, and
for the transaction and with a third party commercial bank, was recorded as either an increase or decrease to interest
each totaling $5.8 billion in notional amount and (2) $2.5 bil- expense as presented in the following table.
lion in notional amount of interest rate swaps related to
Increase/Decrease to
Ineffectiveness
___________________________ Interest Expense
_____________________________________
Year ended December 31, 2007 $0.6 Decrease
Year ended December 31, 2006 $0.1 Decrease
Year ended December 31, 2005 $1.5 Increase

NOTE 11 – STOCKHOLDERS’ EQUITY

Preferred Stock
On July 26, 2005, the Company issued $500 million aggregate amount of Series A and Series B preferred equity securities. The key
terms are as follows.
Series A
_____________________________________________________________________________________ Series B
______________________________________________________________________________________
Securities issued Stated value $350 million, comprised of 14 million Stated value $150 million, comprised of 1.5 million
shares of 6.35% non-cumulative fixed rate shares of 5.189% non-cumulative adjustable rate
preferred stock, $0.01 par value per share, preferred stock, $0.01 par value per share, with a
with a liquidation value of $25. liquidation value of $100.
Dividends Annual fixed-rate of 6.35%, payable quarterly, Annual fixed-rate of 5.189%, payable quarterly,
when and if declared by the Board of Directors. when and if declared by the Board of Directors,
Dividends are non-cumulative. through September 15, 2010, and thereafter at an
annual floating rate spread over a pre-specified
benchmark rate. Dividends are non-cumulative.
Redemption/ No stated maturity date. Not redeemable prior to No stated maturity date. Not redeemable prior to
maturity September 15, 2010. Redeemable thereafter at September 15, 2010. Redeemable thereafter at
$25 per share at the option of CIT. $100 per share at the option of CIT.
Voting rights No voting rights. No voting rights.
The terms of the outstanding preferred stock restrict the age fixed charge ratio was below 1.10 at December 31, 2007.
Company’s ability to pay dividends on its common stock if and Notwithstanding the foregoing, CIT may declare such divi-
so long as CIT does not make distributions on our preferred dends to the extent of any net proceeds that CIT has received
stock, in full when due. Further, CIT is prohibited from declar- from the sale of common stock during the 90 days prior to the
ing dividends on its preferred stock if, among other things, the declaration of the dividend or the 180 days prior to the interest
PAGE 86
average four quarters fixed charge ratio is less than or equal payment date. As discussed in Note 26, on January 23, 2008,
to 1.10 on the dividend declaration date or on the thirtieth day CIT Group Inc. entered into an Underwriting Agreement with
prior to the interest payment date, as the case may be. The Morgan Stanley & Co. Incorporated and Citigroup Global
average four quarters fixed charge ratio is defined as (a) the Markets Inc., pursuant to which CIT agreed to sell shares of its
sum, for our most recently completed four fiscal quarters, of common stock for an aggregate purchase price of up to $31.5
the quotient of (x) our earnings (excluding income taxes, inter- million. As a result, the Company sold 1,281,519 shares on
est expense, extraordinary items, goodwill impairment and January 30, 2008 and satisfied the conditions necessary to
amounts related to discontinued operations) and (y) interest permit the declaration and payment of preferred stock divi-
expense plus preferred dividends, divided by (b) four. The aver- dends payable February 29, 2008.
Common Stock
The following table summarizes changes in common stock outstanding for the respective periods.
Less
Issued
________________________ Treasury
________________________ Outstanding
________________________
Balance at December 31, 2006 213,555,940 (15,260,564) 198,295,376
Treasury shares purchased – (12,877,316) (12,877,316)
Shares held to cover taxes on vesting restricted shares – (291,232) (291,232)
Stock options exercised – 2,879,016 2,879,016
Shares issued for acquisitions – 726,206 726,206
Shares sold to allow preferred dividend payment – 235,800 235,800
Employee stock purchase plan participation – 123,516 123,516
Restricted and performance shares issued 834,237
________________________ –
________________________ 834,237
________________________
Balance at December 31, 2007 214,390,177
________________________ (24,464,574)
________________________ 189,925,603
________________________
________________________ ________________________ ________________________
Accumulated Other Comprehensive Income/(Loss)

The following table details the components of accumulated other comprehensive income/(loss), net of tax.
2007
____________ 2006
____________ 2005
____________
Changes in fair values of derivatives qualifying as cash flow hedges $ (96.6) $ 34.2 $ 27.6
Foreign currency translation adjustments 319.1 132.2 73.5
Minimum pension liability adjustments 17.1 (2.5) (3.2)
Unfunded pension liability(1) (52.7) (52.7) –
Unrealized gain on available for sale equity and securitization investments 7.9
____________ 18.4
____________ 17.3
____________
Total accumulated other comprehensive income $194.8
____________ $129.6
____________ $115.2
____________
____________ ____________ ____________
(1) The adoption of SFAS 158 at December 31, 2006 resulted in recording various unfunded post-retirement liabilities
The change in the fair values of derivatives qualifying as cash various foreign currencies against the U.S. dollar, particularly
flow hedges related to variations in market interest rates, as the Canada dollar, British Pound and Euro, partially offset by
these derivatives hedge the interest rate variability associated corresponding hedging activity, on an after tax basis.
with an equivalent amount of variable-rate debt, including
The components of the adjustment to Accumulated Other
commercial paper. See Note 10 - Derivatives for additional
Comprehensive Income for derivatives qualifying as hedges of
information. The change in foreign currency translation
future cash flows are presented in the following table:
adjustments balance during 2007 reflects the strengthening of
Fair Value Total
PAGE 87
Adjustments Income Unrealized
of Derivatives
________________________ Tax Effects
________________________ Gain (Loss)
________________________
Balance at December 31, 2005 – unrealized gain $ 48.4 $(20.8) $ 27.6
Changes in values of derivatives
qualifying as cash flow hedges 10.8
________________________ (4.2)
________________________ 6.6
________________________
Balance at December 31, 2006 – unrealized gain 59.2 (25.0) 34.2
Changes in values of derivatives
qualifying as cash flow hedges (230.0)
________________________ 99.2
________________________ (130.8)
________________________
Balance at December 31, 2007 – unrealized loss $(170.8)
________________________ $ 74.2
________________________ $ (96.6)
________________________
________________________ ________________________ ________________________
The unrealized loss as of and for the year ended December 31, lives of the swaps. Assuming no change in interest rates,
2007 reflects lower market interest rates since the inception of approximately $39 million, net of tax, of the Accumulated
the hedges. The Accumulated Other Comprehensive Income Other Comprehensive Income as of December 31, 2007 is
(along with the corresponding swap asset or liability) will be expected to be reclassified to earnings over the next twelve
adjusted as market interest rates change over the remaining months as contractual cash payments are made.

NOTE 12 – EARNINGS PER SHARE

The reconciliation of the numerator and denominator of basic EPS with that of diluted EPS is presented.
(dollars in millions, except per share amounts, shares in thousands)
Net Income / Common Per Share
(Loss)
______________________ Shares
________________ Amount
_________________
Year Ended December 31, 2007
Basic EPS: $ (111.0) 191,412 $(0.58)
Effect of dilutive securities:
Restricted shares –
Stock options ______________________ –
_______________
Diluted EPS $ (111.0)
______________________
______________________ 191,412
_______________
_______________ $(0.58)
Basic EPS: $1,015.8 198,912 $ 5.11
Effect of Dilutive Securities:
Restricted shares 1,912
Stock options ______________________ 2,287
_______________
Diluted EPS $1,015.8
______________________
______________________ 203,111
_______________
_______________ $ 5.00
Basic EPS: $ 936.4 206,059 $ 4.54
Effect of Dilutive Securities:
Restricted shares 1,706
PAGE 88
Stock options ______________________ 2,969

_______________
Diluted EPS $ 936.4
______________________ 210,734
_______________ $ 4.44
______________________ _______________
Options and restricted shares that do not have a dilutive effect 16.0 million shares for the years ended December 31, 2007,
are not included in the denominator and averaged approxi- 2006 and 2005, respectively.
mately 15.2 million shares, 13.8 million shares and
NOTE 13 – OTHER INCOME

The following table sets forth the components of other income.
2007
_______________ 2006
_______________ 2005
_______________
Fees and other income $ 527.2 $ 547.3 $ 489.6
Gains on receivable sales and syndication fees 180.7 298.3 163.3
Factoring commissions 226.6 233.4 235.7
Gains on sales of leasing equipment 117.1 122.8 91.9
Gains on securitizations 45.3 47.0 39.1
Gain on sale of Dell Financial Services joint venture 247.1 – –
Gain on portfolio and asset dispositions 236.1 – 181.3
Gain on derivatives –
_______________ –
_______________ 43.1
_______________
Total other income $1,580.1
_______________ $1,248.8
_______________ $1,244.0
_______________
_______________ _______________ _______________
NOTE 14 – SALARIES AND GENERAL OPERATING EXPENSES

The following table sets forth the components of salaries and general operating expenses.
2007
______________ 2006
______________ 2005
______________
Salaries and employee benefits $ 892.5 $ 903.5 $ 695.8
Other operating expenses 586.2
______________ 479.1
______________ 418.0
______________
Total $1,478.7
______________ $1,382.6
______________ $1,113.8
______________
______________ ______________ ______________
NOTE 15 – INCOME TAXES

The (benefit)/provision for income taxes is comprised of the following.
2007
____________ 2006
____________ 2005
____________
Current federal income tax provision $ 7.0 $ 42.4 $ 20.4
Deferred federal income tax (benefit)/provision (238.0)
____________ 159.2
____________ 298.0
____________
Total federal income taxes (231.0)
____________ 201.6
____________ 318.4
____________
Current state and local income taxes 19.1 36.9 40.8
Deferred state and local income taxes (28.3)
____________ 0.4
____________ 26.6
____________
Total state and local income taxes (9.2)
____________ 37.3
____________ 67.4
____________
Foreign income taxes 45.8
____________ 125.5
____________ 78.4
____________
Total (benefit)/provision for income taxes $(194.4)
____________ $364.4
____________ $464.2
____________
____________ ____________ ____________
PAGE 89
The tax effects of temporary differences that give rise to sig- At December 31, 2007, CIT had U.S. federal net operating
nificant portions of the deferred income tax assets and losses of approximately $1,584.6 million, including $77.5 mil-
liabilities are presented below. lion acquired in the 2005 purchase of the Education Lending
Group, which expire in various years beginning in 2023. In
addition, CIT has gross deferred tax assets of approximately
2007
_______________ 2006
_______________ $214.6 million and $7.0 million related to state net operating
Assets: losses (NOLs) and capital losses, respectively, that will expire
Net operating loss carry forwards $ 730.2 $ 127.0 in various years beginning in 2008. Federal and state operating
losses may be subject to annual use limitations under Section
Provision for credit losses 217.8 216.9
382 of the Internal Revenue Code of 1986, as amended, and
Alternative minimum tax credits 242.2 157.0 other limitations under certain state laws. Management
Accrued liabilities and reserves 95.7 120.7 believes that CIT will have sufficient taxable income in future
Other 233.0 192.3 years and can avail itself of tax planning strategies in order
_______________ _______________
to fully utilize the federal losses. Accordingly, CIT does not
Total deferred tax assets 1,518.9
_______________ 813.9
_______________ believe a valuation allowance is required with respect to
Liabilities: these federal net operating losses. Based on management’s
Operating leases (1,138.3) (1,010.3) assessment as to realizability, the net deferred tax liability
Leveraged leases (171.1) (366.3) includes a valuation allowance of approximately $46.1 million
and $10.4 million against the recorded deferred tax asset for
Loans and direct financing leases (584.7) (397.3) state NOLs and capital losses at December 31, 2007 and 2006,
Securitizations (132.5) (128.9) respectively.
Joint ventures (52.4) (16.4) Deferred federal income taxes have not been provided on
Other (79.4)
_______________ (69.7)
_______________ approximately $1,150.8 million of cumulative earnings of
Total deferred tax liabilities (2,158.4) (1,988.9) foreign subsidiaries that the Company has determined to be
_______________ _______________
permanently reinvested. It is not practicable to estimate the
Net deferred tax (liability) $_______________
(639.5) $(1,175.0)
_______________
_______________ _______________ amount of tax that might be payable on these permanently
reinvested earnings.

Percentage of Pretax Income Years Ended December 31,

2007
_________ 2006
_________ 2005
_________
Federal income tax rate 35.0% 35.0% 35.0%
Increase (decrease) due to:
State and local income taxes, net of federal income tax benefit 2.2 1.7 3.1
Tax on international operations 64.2 (6.3) (3.4)
Non-deductible goodwill impairment charge (36.9) – –
Deferred tax release associated with aircraft transfers 5.1 (5.1) (1.2)
Other 1.8
_________ 0.5
_________ (0.7)
_________
Effective tax rate 71.4%
_________ 25.8%
_________ 32.8%
_________
_________ _________ _________
In 2007 significant noteworthy items impacted the relationship The Company adopted the provisions of FASB Interpretation
between recorded tax benefits, pre-tax earnings and the com- No. 48, Accounting for Uncertainty in Income Taxes (FIN 48),
puted effective tax rate. Pre-tax losses were $272.3 million for on January 1, 2007. As a result of the implementation of FIN
the year ended December 31, 2007, with a corresponding tax 48, the Company recognized an increase of $6.4 million in the
benefit of $194.4 million, resulting in a reported effective tax rate liability for uncertain tax positions, which was accounted for as
of 71.4%. The effective tax rate differs from the U.S. federal tax a decrease to the January 1, 2007 balance of retained earn-
rate of 35% primarily due to state and local income taxes, foreign ings. As of the date of adoption and after the impact of
earnings taxed at lower rates and other tax benefits associated recognizing the increase in liability noted above, the
with our international operations, as well as permanent differ- Company’s liability for uncertain tax positions totaled
ences between book and tax treatment of certain items $211.0 million (comprised of unrecognized tax benefits and
(including the goodwill impairment writedown). associated interest and penalties), the recognition of which
PAGE 90
would affect the effective tax rate. During the twelve months
Due to the existence of the 2007 pre-tax loss, the items above
ended December 31, 2007, the Company recognized an
that are the reconciling differences between the federal statu-
approximate $9.8 million net decrease in the liability for
tory tax rate and the effective tax rate have an atypical
unrecognized tax benefits, offset by a $21.8 million increase
relationship to the baseline statutory rate when compared to
attributable to foreign currency revaluation.
their effect in prior periods. Specifically, reconciling items that
would typically reduce the effective rate, such as the impact of The Company recognizes accrued interest and penalties
the reduced tax rates applied to foreign earnings, serve to related to unrecognized tax benefits within its global opera-
increase the effective rate in 2007. This is due to the fact that tions in income tax expense. In conjunction with the adoption
the tax benefit derived from the pre-tax losses are reduced by of FIN 48, the Company recognized approximately $48.7 mil-
foreign earnings taxed at a lower rate, which results in a higher lion for the payment of interest and penalties at January 1,
overall tax benefit than if the foreign earnings were taxed at the 2007, which is included as a component of the $211.0 million
US statutory tax rate of 35%. The greater tax benefit against a liability for uncertain tax positions noted above. During the
pre-tax loss results in a higher effective tax rate. Similarly, the twelve months ended December 31, 2007, the Company recog-
impact of the non-deductible goodwill impairment charge nized an approximate $1.8 million net decrease in interest
when applied against a pre-tax loss, is reflected as a reduction and penalties associated with uncertain tax positions, offset
to the computed effective tax rate, as it reduces the tax benefit. by a $7.6 million increase attributable to foreign currency
revaluation.
A reconciliation of the beginning and ending amount of unrec-
ognized tax benefits is as follows: After the impact of recognizing the net increase in liability and
interest noted above, the Company’s unrecognized tax benefits
totalled $223.0 million, the recognition of which would affect
Balance at January 1, 2007 $211.0 the effective tax rate. To the extent interest and penalties are
Additions based on tax positions related not assessed with respect to uncertain tax positions, amounts
to the current year 20.0 accrued will be reduced and reflected as a reduction of the
Additions based on tax positions related to overall income tax provision. The Company anticipates that it
prior years 13.6 is reasonably possible that the total unrecognized tax benefits
Reductions for tax positions of prior years (29.1) will decrease due to the settlement of audits and the expira-
tion of statute of limitations prior to December 31, 2008 in the
Settlements and payments (11.6)
range of $20 - $40 million.
Expiration of the statute of limitations (2.7)
The Company’s U.S. Federal income tax returns for 2002
Foreign currency revaluation 21.8
____________ through 2004 are currently under examination by the Internal
Balance at December 31, 2007 $223.0
____________ Revenue Service. The audit of the 1997 through 2001 years is
____________
currently being reviewed, having been returned by Appeals to
an examining agent for further development of the disputed acquisition, resulted in the elimination of any (a) previously
issues. The Canadian tax authorities are considering issues existing unrecognized net gain or loss, (b) unrecognized prior
to which the Company has filed objections or Voluntary service cost and (c) unrecognized net transition obligation.
Disclosure relating to the 1992 through 2002 tax years. In
The Plan has a “cash balance” formula that became effective
addition, the Company has subsidiaries in various states,
January 1, 2001, at which time certain eligible members had the
provinces and countries that are currently under audit for
option of remaining under the Plan formula as in effect prior to
years ranging from 1997 through 2005. Management does not January 1, 2001. Under the cash balance formula, each mem-
anticipate the resolution of these matters will result in a ber’s accrued benefits as of December 31, 2000 were converted
material change to its financial position or results of to a lump sum amount, and every month thereafter, the balance
operations. is credited with a percentage (5% to 8% depending on years of
The Company, as required by regulation, has made payments service) of the member’s “Benefits Pay” (comprised of base
totaling approximately $93 million (CAD) to Revenue Canada salary, plus certain annual bonuses, sales incentives and com-
(“CRA”) in connection with disputed tax positions related to missions). These balances also receive periodic interest credits,
certain leasing transactions. The Company is engaged in set- subject to certain government limits. The interest credit was
tlement discussions with CRA with respect to these 4.78%, 4.73%, and 4.88% for the plan years ended December 31,
transactions, the outcome and timing of which is uncertain. 2007, 2006, and 2005, respectively. Prior to January 1, 2008, upon
These leasing transactions were originated by a predecessor termination or retirement after five years of employment, the
prior to being acquired in a stock transaction by the Company. amount credited to a member is to be paid in a lump sum or
converted into an annuity at the option of the member. The
The predecessor shareholders provided an indemnification
member may also elect to defer payment until age 65.
with respect to the tax attributes of these transactions.
Management of the Company believes that the settlement of During the fourth quarter of 2006, CIT completed amendments
these transactions with CRA, or with the indemnitors, would to its non-qualified pension plans, generally to comply with
not have a material impact on the Company’s financial posi- IRS Section 409A regulations. Also, as of December 31, 2006
tion, cash flows or results of operations. CIT has included the impact of reducing the vesting period of
the Plan from five years to three years recognizing the impact
NOTE 16 – RETIREMENT, OTHER POSTRETIREMENT AND of Pension Protection Act on “cash balance” formula plans.
PAGE 91
OTHER BENEFIT PLANS These amendments increased the benefit obligations of those
Retirement and Postretirement Medical and Life plans by $25.6 million, and is being recognized ratably in earn-
Insurance Benefit Plans ings over the remaining service life of the plan participants.
CIT has a number of funded and unfunded noncontributory CIT also provides certain healthcare and life insurance benefits
defined benefit pension plans covering certain of its U.S. and to eligible retired U.S. employees. For most eligible retirees, the
non-U.S. employees, each of which is designed in accordance healthcare benefit is contributory and the life insurance benefit
with the practices and regulations in the countries concerned. is noncontributory. Salaried participants generally become eligi-
Retirement benefits under the defined benefit pension plans ble for retiree healthcare benefits upon completion of ten years
are based on the employee’s age, years of service and qualify- of continuous service after attaining age 50. Individuals hired
ing compensation. CIT’s funding policy is to make prior to November 1999 become eligible for postretirement ben-
contributions to the extent such contributions are not less efits after 11 years of continuous service after attaining age 44.
than the minimum required by applicable laws and regula- Generally, the medical plan pays a stated percentage of most
tions, are consistent with our long-term objective of ensuring medical expenses, reduced by a deductible as well as by pay-
sufficient funds to finance future retirement benefits, and are ments made by government programs and other group
tax deductible as actuarially determined. Contributions are coverage. The retiree health care benefit includes a limit on CIT’s
charged to the salaries and employee benefits expense on a share of costs for all employees who retired after January 31,
systematic basis over the expected average remaining service 2002. The plans are funded on a pay as you go basis.
period of employees expected to receive benefits. The discount rate assumptions used for pension and postre-
The largest plan is the CIT Group Inc. Retirement Plan (the tirement benefit plan accounting reflect the prevailing rates
“Plan”), which accounts for 72% of the total pension benefit available on high-quality, fixed-income debt instruments with
obligation at December 31, 2007. The Plan covers U.S. maturities that match the benefit obligation. The rate of com-
employees of CIT who have completed one year of service and pensation used in the actuarial model for pension accounting
have attained the age of 21. The Company also maintains a is based upon the Company’s long-term plans for such
Supplemental Retirement Plan for employees whose benefit increases, taking into account both market data and historical
in the Plan is subject to Internal Revenue Code limitations. pay increases.
On January 2, 2007, CIT acquired Barclay’s UK and German ven- The disclosure and measurement dates included in this report
dor finance businesses. The acquisition included an unfunded for the Retirement and Postretirement Medical and Life
defined benefit plan with a total benefit obligation of $16.0 mil- Insurance Plans are December 31, 2007, 2006 and 2005.
lion as at January 2, 2007. CIT accounted for this acquisition
The Company adopted SFAS No. 158 “Employer’s Accounting for
using the purchase accounting method. As such, the projected
Defined Benefit Pension and Other Postretirement Plans” on a
benefit obligation was recognized as a new liability on the bal-
prospective basis effective December 31, 2006, which required
ance sheet. The recognition of this liability, at the date of

recognition of the funded status of retirement and other postre- The following tables set forth the change in benefit obligation,
tirement benefit plans, measured as the difference between plan plan assets and funded status of the retirement plans as well
assets at fair value and the benefit obligation, in the balance as the net periodic benefit cost. All periods presented include
sheet. It also required the Company to recognize as a component amounts and assumptions relating to the Plan, the
of other comprehensive income, net of tax, the gains or losses Supplemental Retirement Plan, an Executive Retirement Plan
and prior service costs or credit that arise during the period but and various international plans.
are not recognized as components of net periodic benefit cost.
Retirement Benefits
For the years ended December 31, (dollars in millions)
2007
___________ 2006
___________ 2005
___________
Change in Benefit Obligation
Benefit obligation at beginning of period $376.7 $330.5 $314.5
Service cost 25.2 20.9 19.6
Interest cost 22.7 18.1 17.1
Amendments(1) – 25.6 –
Actuarial (gain)/loss (19.3) (1.5) 3.3
Benefits paid (10.5) (6.6) (5.9)
Acquisition/Transferred Liabilities 16.0 – –
Plan settlements and curtailments (23.0) (13.6) (18.2)
Termination benefits 0.7 0.6 2.3
Currency translation adjustment 2.6 2.7 (2.2)
PAGE 92
Other –
___________ –
___________ –
___________
Benefit obligation at end of period $391.1
___________ $376.7
___________ $330.5
___________
___________ ___________ ___________
Change in Plan Assets
Fair value of plan assets at beginning of period $285.9 $272.1 $250.6
Actual return on plan assets 24.0 26.8 20.5
Employer contributions 16.5 5.6 26.1

Plan settlements (20.9) (13.6) (18.0)
Benefits paid (10.5) (6.6) (5.9)
Currency translation adjustment 0.3
___________ 1.6
___________ (1.2)
___________
Fair value of plan assets at end of period $295.3
___________ $285.9
___________ $272.1
___________
___________ ___________ ___________
Reconciliation of Funded Status
Funded status $ (95.8) $ (90.8) $ (58.4)
Unrecognized net actuarial loss – – 62.0
Unrecognized prior service cost –
___________ –
___________ –
___________
Net amount recognized $ (95.8)
___________ $___________
(90.8) $ 3.6
___________
___________ ___________ ___________
(1) Company assets, which are not included in the retirement plan assets on the preceding tables, are earmarked for the non-qualified U.S.
Executive pension plan obligation.
Amounts Recognized in the Consolidated Balance Sheets before adoption of SFAS 158
Prepaid benefit cost $ 39.2 $ 52.9
Accrued benefit liability (72.3) (53.8)
Intangible asset 17.1 –
Accumulated other comprehensive loss 3.5
___________ 4.5
___________
Net amount recognized $___________
(12.5) $ 3.6
___________
___________ ___________
Retirement Benefits (continued)

2007
___________ 2006
___________ 2005
___________
After adoption of SFAS 158:
Assets $ – $ –
Liabilities (95.8)
___________ (90.8)
___________
Net amount recognized $(95.8)
___________
___________ $(90.8)
___________
___________
Amounts Recognized in Accumulated Other Comprehensive
Income (AOCI) consist of:
Net actuarial loss $ 29.0 $ 52.7
Prior service costs 22.7
___________ 25.6
___________
Total AOCI (before taxes) $ 51.7
___________ $ 78.3
___________
___________ ___________
Change in AOCI Due to Adoption of SFAS 158 (before taxes) $ 74.8
___________
___________
Weighted-average Assumptions Used to Determine Benefit
Obligations at Period End
Discount rate 6.64% 5.93% 5.67%
Rate of compensation increase 4.39% 4.49% 4.25%
Weighted-average Assumptions Used to Determine Net
Periodic Pension Cost for Periods
Discount rate 6.00% 5.67% 5.69%
Expected long-term return on plan assets 7.92% 7.92% 7.93%
PAGE 93
Components of Net Periodic Benefit Cost
Service cost $ 25.2 $ 20.9 $ 19.6
Expected return on plan assets (22.2) (20.8) (19.2)
Amortization of net loss 0.9 2.4 2.8
Amortization of prior service cost 2.7 – –
Settlement and curtailment (gain)/loss (0.3) (0.1) 0.4
Termination benefits 0.7
___________ 0.6
___________ 2.3
___________
Total net periodic expense $ 29.7
___________ $ 21.1
___________ $ 23.0
___________
___________ ___________ ___________
Liabilities Acquired $(16.0)
___________
___________
Other Changes in Plan Assets and Benefit Obligations Recognized
in Other Comprehensive Income
Net actuarial (gain) loss $(23.3)
Recognized actuarial gain (loss) (0.3)
Prior service cost (credit) –
Recognized prior service (cost) credit (2.9)
Initial net (asset)/obligation –
Recognized initial net (asset)/obligation –
Currency Translation Adjustment (0.1)
___________
Total recognized in other comprehensive income (before tax effects) $(26.6)
___________
___________
Total recognized in net benefit cost and other comprehensive
income (before tax effects) $ 3.1
___________
___________
Amounts Expected to be Recognized in Net Periodic Cost in the Coming Year
Loss recognition $ 0.4 $ 1.5
Prior service cost recognition $ 2.7 $ 2.6
Item 8: Financial Statement and Supplementary Data

During 2007, reductions in workforce resulted in a curtailment and expected future returns for each asset class. Independent
under the US Retirement and Supplemental plans and analysis of historical and projected asset class returns, infla-
resulted in one time charges of $0.2 million. Obligations for tion, and interest rates are provided by our investment
these plans were re-measured during the third quarter using consultants and reviewed as part of the process to develop our
a 6.50% discount rate. The expense for the third and fourth assumptions.
quarters of 2007 reflect the re-measurement.
The accumulated benefit obligation for all defined benefit pen-
Special termination benefits in connection with the sale of sion plans was $359.0 million, $330.2 million, and $286.8
CIT’s construction equipment leasing business in 2007 million, at December 31, 2007, 2006, and 2005, respectively.
resulted in a one time charge for the US Retirement plan in Plans with accumulated benefit obligations in excess of plan
the amount of $0.7 million. assets relate primarily to non-qualified U.S. plans and certain
international plans.
Expected long-term rate of return assumptions for pension
assets are based on projected asset allocation and historical
Retirement Benefits
2007
____________ 2006
____________ 2005
____________
Expected Future Cashflows
Expected Company Contributions in the following fiscal year $ 8.7 $ 9.4 $ 3.5
Expected Benefit Payments
1st Year following the disclosure date $ 44.2 $ 29.3 $ 24.2
2nd Year following the disclosure date $ 27.4 $ 17.1 $ 14.4
3rd Year following the disclosure date $ 29.9 $ 20.2 $ 14.2
PAGE 94
4th Year following the disclosure date $ 32.0 $ 20.0 $ 16.0

5th Year following the disclosure date $ 33.2 $ 23.0 $ 16.4
Years 6 thru 10 following the disclosure date $194.8 $155.4 $120.3
Pension Plan Weighted-average Asset Allocations
Equity securities 66.9% 64.5% 65.7%
Debt securities 24.9% 29.5% 28.3%

Real estate – – –
Other 8.2%
____________ 6.0%
____________ 6.0%
____________
Total pension assets 100.0%
____________ 100.0%
____________ 100.0%
____________
____________ ____________ ____________
Information for Pension Plans with an Accumulated Benefit Obligation
in Excess of Plan Assets
Projected benefit obligation $108.6 $100.6 $ 71.6
Accumulated benefit obligation $ 96.8 $ 84.6 $ 57.0
Fair value of plan assets $ 15.0 $ 14.3 $ 10.9
Additional Information
(Decrease) increase in Minimum Liability Included in Other
Comprehensive Income $ – $ (1.0) $ 0.7
CIT maintains a “Statement of Investment Policies and Estate and Commodities, as approved by the Investment
Objectives” which specifies investment guidelines pertaining Committee. The policy provides specific guidance related to
to the investment, supervision and monitoring of pension asset class objectives, fund manager guidelines and identifi-
assets so as to ensure consistency with the long-term objec- cation of both prohibited and restricted transactions, and is
tive of ensuring sufficient funds to finance future retirement reviewed on a periodic basis by both the Investment
benefits. The policy asset allocation guidelines allow for Committee of CIT and the Plans’ external investment consult-
assets to be invested between 55% to 70% in Equities and 25% ants to ensure the long-term investment objectives are
to 45% in Fixed-Income investments. In addition, the policy achieved. Members of the Committee are appointed by the
guidelines allow for additional diversifying investments in Chief Executive Officer of CIT and include the Chief Financial
other asset classes or securities such as Hedge Funds, Real Officer, General Counsel, and other senior executives.
There were no direct investment in equity securities of CIT or Company assets, which are not included in the retirement
its subsidiaries included in the pension plan assets at plan assets in the preceding tables, are earmarked for the
December 31, 2007, 2006, and 2005, respectively. CIT expects non-qualified U.S. Executive pension plan obligation.
to contribute $8.7 million to its pension plans and $4.1 million
The following tables set forth data relating to postretirement
to its other postretirement benefit plans in 2008.
plans.
Postretirement Benefits
2007
___________ 2006
___________ 2005
___________
Change in Benefit Obligation
Benefit obligation at beginning of period $ 57.5 $ 62.4 $ 59.9
Service cost 2.2 2.2 2.2
Employee contributions 1.6 1.1 1.0
Actuarial loss (9.3) (6.4) 3.7
Net benefits paid (6.0) (5.1) (6.8)
Retiree Drug Subsidy 0.3 – –
Plan amendments –
___________ –
___________ (0.8)
___________
Benefit obligation at end of period $ 49.6
___________
___________ $ 57.5
___________
___________ $ 62.4
___________
___________
Change in Plan Assets
Fair value of plan assets at beginning of period $ – $ – $ –
Net benefits paid (6.0) (5.1) (6.8)
PAGE 95
Employee contributions 1.6 1.1 1.0
Employer contributions 4.1 4.0 5.8
Other 0.3
___________ –
___________ –
___________
Fair value of plan assets at end of period $ –
___________ $ –
___________ $ –
___________
___________ ___________ ___________
Reconciliation of Funded Status
Funded status $(49.6)
___________ $(57.5)
___________ $(62.4)
___________ ___________
Unrecognized prior service cost (0.8)
Unrecognized net actuarial loss 18.4
___________
Accrued cost $(44.8)
___________
___________
Amounts Recognized in the Consolidated Balance Sheets
Before Adoption of SFAS 158:
Prepaid benefit cost $ – $ –
Accrued benefit liability (47.3) (44.8)
Intangible asset – –
Accumulated other comprehensive income –
___________ –
___________
___________ $(44.8)
___________
___________ ___________
After Adoption of SFAS 158:
Assets $ – $ –
Liabilities (49.6)
___________ (57.5)
___________
___________ $(57.5)
___________
___________ ___________
Amounts Recognized in Other Accumulated Comprehensive
Income (AOCI) consist of:
Net actuarial loss $ 0.9 $ 10.8
Prior service (credit) (0.5)
___________ (0.6)
___________
Total AOCI (before taxes) $ 0.4
___________ $ 10.2
___________
___________ ___________
Change in AOCI Due to Adoption of SFAS 158 (before taxes) $ 10.2
___________
___________

Postretirement Benefits (continued)

2007
___________ 2006
___________ 2005
___________
Weighted-average Assumptions Used to Determine
Benefit Obligations at Period End
Discount rate 6.50% 6.00% 5.50%
Weighted-average Assumptions Used to Determine Net
Periodic Benefit Cost for periods
Discount rate 6.00% 5.50% 5.50%
Components of Net Periodic Benefit Cost
Service cost $ 2.2 $ 2.2 $2.2
Amortization of prior service cost (0.1) (0.1) –
Amortization of net loss 0.6
___________ 1.1
___________ 0.9
___________
Total net periodic expense $ 6.0
___________
___________ $ 6.5
___________
___________ $6.3
___________
___________
Assumed Health Care Trend Rates at Period End
Health care cost trend rate assumed for next year
Pre-65 10.00% 10.00% 11.50%
Post-65 8.50% 8.00% 9.75%
Rate to which the cost trend rate is assumed to
PAGE 96
decline (the ultimate trend rate) 5.00% 5.25% 5.00%

Year that the rate reaches the ultimate trend rate 2018 2018 2018
Included in our Postretirement Benefit Obligation at Assumed healthcare cost trend rates have a significant effect
December 31, 2007 is a reduction to the liability for the transi- on the amounts reported for the healthcare plans. The
tion of LTD medical benefits to our Postemployment Benefit Company relies on both external and historical data to deter-
Obligation. Preretirement medical obligations for employees mine healthcare trend rates. A one-percentage point change
on LTD are now being accounted for under FAS 112, in assumed healthcare cost trend rates would have the follow-
”Employers’ Accounting for Postemployment Benefits”. ing estimated effects.
Postretirement Benefits
2007
_________ 2006
_________ 2005
_________
Effect of One-percentage Point Increase on:
Period end postretirement benefit obligation $ 1.8 $ 2.1 $ 2.6
Total of service and interest cost components $ 0.1 $ 0.1 $ 0.2
Effect of One-percentage Point Decrease on:
Period end postretirement benefit obligation $(1.6) $(1.8) $(2.3)
Total of service and interest cost components $(0.1) $(0.1) $(0.1)
The Medicare Prescription Drug, Improvement and FAS 106-2, “Accounting and Disclosure Requirements related
Modernization Act of 2003 introduced a prescription drug ben- to the Medicare Prescription Drug, Improvement and
efit under Medicare (Medicare Part D) as well as a federal Modernization Act of 2003”, CIT began prospective recognition
subsidy to sponsors of retiree healthcare benefit plans that of the effects of the subsidy in the third quarter 2004.
provide a benefit that is at least actuarially equivalent to Projected benefit payments and the effects of the Medicare Rx
Medicare Part D. In accordance with FASB Staff Position No. subsidy recognition are as follows:

2007 Medicare
Projected Benefit Payments Gross
___________________ Rx Subsidy
___________________ Net
___________________
2008 $ 4.5 $0.4 $ 4.1
2009 $ 4.5 $0.4 $ 4.1
2010 $ 4.5 $0.5 $ 4.0
2011 $ 4.5 $0.5 $ 4.0
2012 $ 4.6 $0.5 $ 4.1
2013 – 2017 $23.5 $2.0 $21.5
2006 Medicare
___________________ Rx Subsidy
___________________ Net
___________________
2007 $ 4.8 $0.2 $ 4.6
2008 $ 4.9 $0.4 $ 4.5
2009 $ 5.0 $0.5 $ 4.5
2010 $ 4.9 $0.5 $ 4.4
2011 $ 5.0 $0.6 $ 4.4
2012 – 2016 $26.3 $2.3 $24.0
2005 Medicare
___________________ Rx Subsidy
___________________ Net
___________________
2006 $ 4.7 $ – $ 4.7
2007 $ 4.9 $0.4 $ 4.5
2008 $ 5.0 $0.5 $ 4.5
PAGE 97
2009 $ 5.2 $0.5 $ 4.7
2010 $ 5.2 $0.6 $ 4.6
2011 – 2015 $27.6 $3.2 $24.4
Savings Incentive Plan Stock-Based Compensation

CIT also has a number of defined contribution retirement In May 2006, CIT adopted the Long-Term Incentive Plan (the
plans covering certain of its U.S. and non-U.S. employees, “LTIP”) as approved by shareholders, which provides for
designed in accordance with conditions and practices in the grants of stock-based awards. As of that date, the LTIP
countries concerned. Employee contributions to the plans are replaced the prior plan, the Long-Term Equity Compensation
subject to regulatory limitations and the specific plan provi- Plan (the “ECP”), under which no new awards have been or
sions. The largest plan is the CIT Group Inc. Savings Incentive will be made, although awards granted under the ECP prior to
Plan, which qualifies under section 401(k) of the Internal that date remain outstanding. The number of shares of com-
Revenue Code and accounts for 72% of CIT’s total Savings mon stock that may be issued for all purposes under the LTIP
Incentive Plan expense for the year ended December 31, 2007. is 7,500,000, plus any shares that remained available for
CIT’s expense is based on specific percentages of employee issuance under the ECP, including shares that become avail-
contributions and plan administrative costs and aggregated able for issuance upon cancellation or expiration of awards
$21.7 million, $26.9 million and $20.0 million for the years granted under the ECP without having been exercised or set-
ended December 31, 2007, 2006, and 2005. tled. Including 36,000,000 shares originally approved for
issuance under the ECP, the combined maximum number of
Corporate Annual Bonus Plan
shares allowed for issuance under the LTIP equals 43,500,000.
Annual bonuses are paid under the CIT Group Inc. Annual Of that total, the maximum number of shares that may be
Bonus Plan. The value and number of awards depends on a issued in the form of Restricted Stock, Restricted Stock Units,
variety of factors, including corporate performance and individ- Performance Stock, Performance Units and Other Awards that
ual performance during the fiscal period for which awards are are payable in shares granted under the LTIP equals 9,500,000
made and is subject to approval by the Compensation (5,000,000 and 4,500,000 for the ECP and LTIP).
Committee of the Board of Directors (the “Committee”). Bonus
payments of $85.1 million for the year ended December 31, Stock Options granted to employees during 2007 have a vest-
2007, were paid in February 2008. For the year ended ing schedule of one third per year for three years, a 7-year
December 31, 2006, $101.4 million in bonuses were awarded. term from the date of grant and were issued with strike prices
equal to the fair market value of the common stock on each
respective grant date (i.e., in each case a date on which quar-
terly earnings were publicly announced).

Restricted stock and restricted stock units granted to employ- forfeiture rate for employees who are not executive officers
ees in 2007 vest either one-third per year for three years, and 1% annual forfeiture rate for executive officers.
100% after three years, or 100% immediately. Performance
The Company utilized the modified prospective transition
Shares were granted during 2007 with a subsequent three-
method in the adoption of FAS 123R and therefore: (1) the 2006
year performance period.
expense applies to 2006 awards and the unvested awards as of
Restricted cash units were granted to employees during 2007 December 31, 2005, and (2) the comparable compensation
under the LTIP, which settle 100% in cash and do not result in expense for the year ended December 31, 2005 is presented
the issuance of any Shares of common stock. All of the on a proforma basis in the table below as if CIT had accounted
restricted cash units granted during 2007 vest 100% after for employee stock option plans and employee stock purchase
three years. plans under the fair value method of FAS 123R:
On January 1, 2006, the Company adopted the revision to SFAS For the years ended December 31,
No. 123, “Share-Based Payment” (“FAS 123R”), which requires (dollars in millions except per share data)
the recognition of compensation expense for all stock-based 2005
___________
compensation plans. As a result, salaries and general operat- Net income available for common
ing expenses included $24.3 million of compensation expense shareholders as reported $936.4
related to employee stock option plans and employee stock Stock-based compensation expense – fair
purchase plans ($13.0 million after tax, $0.07 EPS) for the year value method, after tax (19.2)
___________
ended December 31, 2007 and $30.8 million ($17.9 million
Pro forma net income (loss) $917.2
___________
after tax, $0.09 EPS) for the year ended December 31, 2006. ___________
Compensation expense is recognized over the vesting period Basic earnings per share as reported $ 4.54
(requisite service period), generally three years, under the Basic earnings per share pro forma $ 4.45
graded vesting method, whereby each vesting tranche of the
Diluted earnings per share as reported $ 4.44
award is amortized separately as if each were a separate
award. The compensation expense assumes a 4% annual Diluted earnings per share pro forma $ 4.35
PAGE 98
Data for the stock option plans is summarized as follows:

For the years ended December 31,
2007
______________________________________________ 2006
______________________________________________
Weighted Weighted
Average Average
Price Per Price Per
Options
__________________ Option
__________________ Options
__________________ Option
__________________
Outstanding at beginning of period 14,988,882 $41.78 17,470,879 $37.80
January Grant 872,294 $56.54 767,620 $51.43
July Grant 857,199 $49.17 998,651 $47.28
Granted – Other 29,024 $57.41 114,567 $54.78
Exercised (2,879,016) $33.59 (4,031,429) $27.70
Forfeited (1,605,749)
__________________ $59.82 (331,406)
__________________ $46.56
Outstanding at end of period 12,262,634
__________________ $42.94 14,988,882
__________________ $41.78
__________________ __________________
Options exercisable at end of period 8,719,880 $40.43 9,588,027 $40.82
Options unvested at end of period 3,542,754 $49.13 5,400,855 $43.49
During 2007, 1,729,493 options were granted to employees as The weighted average fair value of new options granted was
part of the annual long-term incentive process. In addition, $13.76 and $11.61 for the years ended December 31, 2007 and
29,024 CIT options were issued to independent members of 2006. The fair value of new options granted was determined at
the Board of Directors. In 2006, 1,656,590 options were the date of grant using the Black-Scholes option-pricing
granted to employees as part of the annual long-term incen- model, based on the following assumptions.
tive process. In addition, 195,080 CIT options were granted to The intrinsic value of options exercised during 2007 and 2006
new hires as well as for retention purposes and 29,168 were was $70.2 million and $99.2 million respectively. The intrinsic
issued to independent members of the Board of Directors. value of both outstanding and exercisable options as of
December 31, 2007 was $2.6 million.
Expected Average Expected Risk Free

Option Life Dividend Volatility Interest
Option Issuance Range Range
__________________________ Yield
_______________ Range
_____________________ Rate
_____________________
2007
January, 2007 2-4 Years 1.41% 23.3% - 24.4% 4.81% - 4.91%
January, 2007 - Section 16b (named officers) 4.75-5.58 Years 1.41% 24.4% - 26.3% 4.78% - 4.81%
May, 2007 - Director Grant 4.75-5.58 Years 1.33% 26.9% - 27.5% 4.54% - 4.55%
July, 2007 2-4 Years 2.03% 37.3% - 38.2% 4.84% - 4.89%
July, 2007 - Section 16b (named officers) 4.75-5.58 Years 2.03% 38.3% - 39.5% 4.90% - 4.92%
October, 2007 - Director Grant 4.75-5.58 Years 2.86% 47.8% - 49.1% 4.20% - 4.26%
2006
January, 2006 3-5 Years 1.60% 20.5% - 24.1% 4.28% - 4.29%
January, 2006 - Section 16b (named officers) 4-5 Years 1.60% 23.4% - 24.1% 4.28% - 4.29%
April, 2006 3-5 Years 1.50% 20.7% - 25.1% 4.87% - 4.91%
May, 2006 - Director Grant 4-5 Years 1.50% 24.1% - 25.1% 5.00% - 5.01%
July, 2006 3-5 Years 1.70% 23.6% - 27.4% 5.02% - 5.06%
July, 2006 - Section 16b (named officers) 4-5 Years 1.70% 26.5% - 27.4% 5.02% - 5.04%
October, 2006 3-5 Years 1.60% 21.6% - 25.4% 4.73% – 4.77%
October, 2006 - Director Grant 4-5 Years 1.60% 23.2% - 25.4% 4.73% – 4.75%
PAGE 99
For employees other than 16(b) officers (selected senior exec- ment eligible as of the grant date. For options granted to
utives), the expected term is equal to the vesting period of the employees who will reach retirement eligibility within the
options plus 12 months for grants made in 2007. Since each three year vesting period, the cost of the grants is amortized
vesting segment was valued separately, the expected term from the grant date through retirement eligibility date. The
assumptions are therefore two, three and four years for seg- volatility assumption is equal to CIT’s historical volatility using
ments that vest in one, two and three years respectively. For weekly closing prices for the period commensurate with the
16(b) officers, the expected life calculation is based on the expected option term, averaged with the implied volatility for
average of the longest and shortest possible exercise periods CIT’s publicly traded options. The individual yield reflected the
given the restrictions on the exercise of options under the Company’s current dividend yield. The risk free interest rate
Executive Equity Retention Policy. Under this methodology, the reflects the implied yield available on U.S. Treasury zero-
expected life assumptions are 57 months, 62 months and 67 coupon issues (as of the grant date for each grant) with a
months for each tranche. The entire cost of options granted is remaining term equal to the expected term of the options.
immediately recognized for those employees who are retire-

The following table summarizes information about stock options outstanding and exercisable at December 31, 2007 and 2006.
Options Outstanding
______________________________________________________________________ Options Exercisable
___________________________________________
Weighted
Remaining Weighted Weighted
Average Average Average
Number Contractual Exercise Number Exercise
Range of Exercise Price Outstanding Life
_____________________ _____________________ Price
________________ Exercisable
_____________________ Price
________________
2007
$18.14 – $27.21 1,777,136 4.5 $ 22.58 1,777,136 $ 22.58
$27.22 – $40.83 3,373,065 5.7 $ 35.95 3,329,733 $ 35.90
$40.84 – $61.26 6,362,799 5.8 $ 47.78 2,863,377 $ 46.02
$61.27 – $91.91 645,257 1.1 $ 73.46 645,257 $ 73.46
$91.92 – $137.87 102,787 0.1 $130.95 102,787 $130.95
$137.88 – $206.82 1,590
_____________________ 0.4 $160.99 1,590
____________________ $160.99
12,262,634
_____________________
_____________________ 8,719,880
____________________
____________________
2006
$18.14 – $27.21 2,778,297 5.5 $ 22.59 2,778,297 $ 22.59
$27.22 – $40.83 4,725,318 6.5 $ 36.21 3,231,444 $ 35.61
$40.84 – $61.26 5,668,061 6.8 $ 45.89 1,761,080 $ 46.14
$61.27 – $91.91 1,703,455 1.3 $ 68.87 1,703,455 $ 68.87
PAGE 100
$91.92 – $137.87 112,161 1.0 $131.12 112,161 $131.12

$137.88 – $206.82 1,590
_____________________ 1.4 $160.99 1,590
____________________ $160.99
14,988,882
_____________________ 9,588,027
____________________
_____________________ ____________________
The unrecognized pretax compensation cost related to purchased under the plan in 2007 and 87,521 shares were pur-
employee stock options was $15.1 million at December 31, chased under the plan in 2006.
2007, which is expected to be recognized in earnings over a
Restricted Stock
weighted-average period of 0.9 years. The total intrinsic value
(in-the-money value to employees), before taxes, related to Performance Shares awarded under the LTIP totaled 834,182
options exercised during the year ended December 31, 2007 in 2007. Final payouts of these awards are based upon a sub-
was $70.2 million and the related cash received by the sequent three-year performance period covering 2007 – 2010.
Company was $96.7 million. The Company’s tax benefit In 2006 and 2005, 839,894 and 761,635 performance shares
related to these employee gains was $10.3 million. were awarded under the ECP (as the LTIP was adopted in May
2006). The performance targets for these awards are based
Employee Stock Purchase Plan upon a combination of consolidated return on common equity
Effective January 1, 2006, eligibility for participation in the measurements and compounded annual EPS growth rates,
Employee Stock Purchase Plan (the “ESPP”) includes employ- which ultimately determine the number of common shares
ees of CIT and its participating subsidiaries who are issued.
customarily employed for at least 20 hours per week, except
Restricted shares awarded were 7,517, 119,248 and 133,867
that any employees designated as highly compensated are not
for 2007, 2006 and 2005. These shares were awarded at the
eligible to participate in the ESPP. The ESPP is available to
fair market value on the applicable grant dates and have
employees in the United States and to certain international
either a one-third per year or three-year cliff-vest period. In
employees. Under the ESPP, CIT is authorized to issue up to
addition, 8,348, 8,123 and 9,369 shares were granted during
1,000,000 shares of common stock to eligible employees.
2007, 2006 and 2005 to independent members of the Board of
Eligible employees can choose to have between 1% and 10% of
Directors, who elected to receive shares in lieu of cash com-
their base salary withheld to purchase shares quarterly, at a
pensation for their retainer. The restricted shares issued to
purchase price equal to 85% of the fair market value of CIT
directors in lieu of cash compensation vest on the first
common stock on the last business day of the quarterly offer-
anniversary of the grant date. As part of the 2007 annual share
ing period. The amount of common stock that may be
grant, 9,364 shares were awarded to the independent mem-
purchased by a participant through the ESPP is generally lim-
bers of the Board of Directors, which have a one-third per year
ited to $25,000 per year. A total of 123,516 shares were
vesting schedule.
For the years ended December 31, 2007, 2006 and 2005, The following tables summarize the restricted stock activity
$17.9 million, $44.1 million and $43.3 million, respectively, of for 2007 and 2006:
expenses are included in salaries and general operating
expenses related to restricted stock.
2007
_____________________________________________________________________________________________________
Restricted Shares/Units
______________________________________________ Performance Shares
_______________________________________________
Weighted Weighted
Average Average
Number of Grant Date Number of Grant Date
Shares
___________________ Value
___________________ Shares
___________________ Value
___________________
Unvested at beginning of the year 263,522 $47.01 2,002,822 $45.24
Granted to employees 7,517 $56.54 834,182 $56.54
Granted to independent directors 17,712 $49.30 n/a n/a
Granted pursuant to performance above target
related to 2004-2006 performance shares n/a n/a 260,742 $38.88
Forfeited (5,000) $43.91 (328,898) $52.43
Vested (94,064)
___________________ $46.51 (782,240)
___________________ $38.88
Unvested at end of period 189,687
___________________ $47.94 1,986,608
___________________ $50.46
___________________ ___________________
PAGE 101
The fair value of restricted stock and performance shares that vested during 2007 was $5.0 million and $47.3 million respectively.
2006
______________________________________________________________________________________________________
Restricted Shares/Units
______________________________________________ Performance Shares
_______________________________________________
Weighted Weighted
Average Average
Number of Grant Date Number of Grant Date
Shares
___________________ Value
___________________ Shares
___________________ Value
___________________
Unvested at beginning of the year 1,298,099 $29.74 1,392,153 $39.89
Granted to employees 119,248 $52.32 839,894 $53.35
Granted to independent directors 18,187 $50.61 n/a n/a
Forfeited (15,614) $37.18 (229,225) $42.46
Vested (1,156,398)
___________________ $28.36 –
___________________ $ –
Unvested at end of period 263,522
___________________ $47.01 2,002,822
___________________ $45.24
___________________ ___________________
The fair value of restricted stock that vested during 2006 was The following table summarizes restricted cash unit activity
$53.7 million. for 2007:
Restricted Cash Units Weighted
Number Average
Restricted cash units awarded under the LTIP were 55,131 for
of Grant Date
2007. These units were awarded at the fair market value on the Units Fair Value
______________ ___________________
applicable grant dates and have a three-year cliff-vest period.
Outstanding at beginning of year – $ –
Granted 85,129 $40.60
Forfeited (3,560) $49.17
Vested –
______________ $ –
Outstanding at end of year 81,569
______________ $40.22
______________

NOTE 17 – COMMITMENTS AND CONTINGENCIES tractual obligations. The accompanying table summarizes
Financing and leasing asset commitments, referred to as loan these and other credit-related commitments, as well as pur-
commitments or lines of credit, are agreements to lend to chase and funding commitments.
customers subject to the customers' compliance with con-

Due to Expire
___________________________________________ 2007
_____________________ 2006
_____________________
Within After Total Total
One Year
_______________ One Year
_________________ Outstanding
_____________________ Outstanding
_____________________
Financing Commitments
Financing and leasing assets $2,059.3 $11,003.3 $13,062.6 $12,601.4
Letters of credit and acceptances
Standby letters of credit 506.9 236.7 743.6 632.5
Other letters of credit 365.9 – 365.9 426.9
Guarantees, acceptances and other recourse obligations 218.9 13.4 232.3 315.0
Purchase and Funding Commitments
Aerospace purchase commitments 1,408.0 5,814.0 7,222.0 5,799.0
Other manufacturer purchase commitments 653.5 82.0 735.5 1,176.0
Sale-leaseback payments 140.9 1,785.0 1,925.9 1,740.8
Other
Liabilities for unrecognized tax benefits 20.0 203.1 223.1 204.6
PAGE 102
In addition to the amounts shown in the table above, unused, mitments or guarantees, as amounts are generally billed and
cancelable lines of credit to customers in connection with a collected on a monthly basis. The table above includes
third-party vendor program, which may be used to finance recourse obligations of approximately $13.4 million at
additional technology product purchases, amounted to December 31, 2007 that were incurred in conjunction with
approximately $34.5 billion and $27.7 billion at December 31, financing and leasing asset sales.
2007 and 2006. These uncommitted vendor-related lines of

CIT’s firm purchase commitments relate predominantly to
credit represent CIT’s estimated proportional amount and can
purchases of commercial aircraft and rail equipment. The
be reduced or canceled by CIT at any time without notice. Our
commitments to purchase commercial aircraft are with both
experience indicates that customers typically will not exercise
Airbus Industrie and The Boeing Company. These are fixed
their entire available line of credit at any point in time.
price purchase commitments subject to customary price
In the normal course of meeting the needs of its customers, increases for future changes in inflation and manufacturing
CIT also enters into commitments to provide financing, letters components. The aerospace equipment purchases are con-
of credit and guarantees. Standby letters of credit obligate CIT tracted for a specific model aircraft, using a baseline aircraft
to pay the beneficiary of the letter of credit in the event that a specification at fixed prices, which reflect discounts from fair
CIT client to whom the letter of credit was issued does not market purchase prices prevailing at the time of commitment.
meet its related obligation to the beneficiary. These financial The delivery price of an aircraft may also change depending on
instruments generate fees and involve, to varying degrees, the final specifications of the aircraft, including engine thrust,
elements of credit risk in excess of the amounts recognized in aircraft weight and seating configuration. Equipment pur-
the consolidated balance sheets. To minimize potential credit chases are recorded at delivery date at the final purchase
risk, CIT generally requires collateral and other forms of credit price paid, which includes purchase price discounts, price
support from the customer. changes relating to specification changes and price increases
relating to inflation and manufacturing components.
Guarantees are issued primarily in conjunction with CIT’s fac-
Accordingly, the commitment amounts detailed in the preced-
toring product in Trade Finance, whereby CIT provides the
ing table are based on estimated values. Pursuant to existing
client with credit protection for its trade receivables without
contractual commitments, 107 aircraft remain to be pur-
actually purchasing the receivables. The trade terms are gen-
chased (23 within 2008). Lease commitments are in place for
erally sixty days or less. If the customer is unable to pay
all of the aircraft to be delivered over the next twelve months.
according to the contractual terms, then CIT purchases the
The order amount excludes unexercised CIT options to pur-
receivables from the client. As of December 31, 2007, CIT had
chase aircraft. The aircraft deliveries to CIT are scheduled
no outstanding liabilities relating to these credit-related com-
periodically through 2016.
Outstanding commitments to purchase equipment to be NOTE 18 – LEASE COMMITMENTS

leased to customers, other than aircraft, relates primarily to The following table presents future minimum rentals under
rail equipment. Rail equipment purchase commitments are at noncancellable long-term lease agreements for premises and
fixed prices subject to price increases for inflation and manu- equipment at December 31, 2007.
facturing components. The time period between commitment
and purchase for rail equipment is generally less than 18 Years Ended December 31, (dollars in millions)
months. Additionally, CIT is party to railcar sale-leaseback Amount
______________
transactions under which it is obligated to pay a remaining 2008 $ 46.5
total of $1,925.9 million, or approximately $143 million per 2009 39.4
year for 2008 through 2012, with remaining payments due 2010 33.8
through 2030. These lease payments are expected to be more
than offset by rental income associated with re-leasing the 2011 31.8
assets, subject to actual railcar utilization and rentals. In con- 2012 29.7
junction with sale-leaseback transactions, CIT has guaranteed Thereafter 218.2
______________
all obligations of the related consolidated lessee entities.
Total $399.4
______________
______________
CIT has guaranteed the public and private debt securities of a
In addition to fixed lease rentals, leases generally require pay-
number of its wholly-owned, consolidated subsidiaries, includ-
ment of maintenance expenses and real estate taxes, both of
ing those disclosed in Note 25 - Summarized Financial
which are subject to rent escalation provisions. Minimum pay-
Information of Subsidiaries. In the normal course of business,
ments have not been reduced by minimum sublease rentals of
various consolidated CIT subsidiaries have entered into other
$18.2 million due in the future under noncancellable subleases.
credit agreements and certain derivative transactions with
financial institutions that are guaranteed by CIT. These transac- Rental expense, net of sublease income on premises and
tions are generally used by CIT’s subsidiaries outside of the U.S. equipment, was as follows.
to allow the local subsidiary to borrow funds in local currencies.
PAGE 103
2007
____________ 2006
____________ 2005
____________
Premises $57.7 $47.0 $34.6
Equipment 8.5 8.5 8.3
Less sublease income (4.6)
____________ (6.2)
____________ (7.1)
____________
Total $61.6
____________ $49.3
____________ $35.8
____________
____________ ____________ ____________

NOTE 19 – FAIR VALUES OF FINANCIAL INSTRUMENTS

Estimated fair values, recorded carrying values and various assumptions used in valuing CIT’s financial instruments are set forth
below.
2007 2006
Asset/(Liability)
______________________________________________ Asset/(Liability)
____________________________________________
Carrying Estimated Carrying Estimated
Value
__________________ Fair Value
__________________ Value
_________________ Fair Value
__________________
Finance receivables-loans(1) $ 50,878.1 $ 50,690.1 $ 46,587.3 $ 46,413.5
Finance receivables-held for sale (2) 1,606.0 1,606.0 1,793.7 1,793.7
Retained interests in securitizations(2) 1,289.9 1,289.9 1,059.4 1,059.4
Other assets (3) 2,056.5 2,056.5 1,382.0 1,382.0
Commercial paper(4) (2,822.3) (2,822.3) (5,365.0) (5,365.0)
Deposits(5) (2,783.9) (2,834.4) (2,430.8) (2,403.3)
Variable-rate senior notes (including accrued
interest payable)(6) (20,011.7) (18,693.6) (19,306.8) (19,309.4)
Fixed-rate senior notes (including accrued interest payable)(6) (29,914.5) (27,568.0) (29,493.2) (29,633.0)
Non-recourse, secured borrowings (7) (17,464.5) (17,172.9) (4,420.2) (4,420.2)
Junior Subordinated notes and convertible debt (1,440.0) (1,068.0) – –
Preferred capital securities (including accrued
interest payable)(8) – – (257.8) (266.9)
Credit balances of factoring clients and other liabilities(9) (8,077.8) (8,077.8) (7,179.3) (7,179.3)
PAGE 104
Derivative financial instruments, net(10) 431.2 431.2 160.8 160.8

(1) The fair value of performing fixed-rate loans was estimated based upon a present value discounted cash flow analysis, using interest rates
that were being offered at the end of the year for loans with similar terms to borrowers of similar credit quality. Discount rates used in the
present value calculation range from 4.20% to 21.60% for December 31, 2007 and 4.80% to 10.66% for December 31, 2006. The maturities used
represent the average contractual maturities adjusted for prepayments. For floating-rate loans that reprice frequently and have no significant
change in credit quality, fair value approximates carrying value. The net carrying value of lease finance receivables not subject to fair value dis-
closure totaled $10.9 billion at December 31, 2007 and $7.8 billion at December 31, 2006. Finance receivables at December 31, 2007 include
home lending loans with a carrying value of $8,467.5 million and an estimated fair value of $8,125.1 million.
(2) Finance receivables-held for sale are recorded at lower of cost or market on the balance sheet. Given current market conditions lower of cost
or market is equal to fair value. Fair values of retained interests in securitizations are calculated utilizing current and anticipated credit losses,
prepayment speeds and discount rates.
(3) Other assets subject to fair value disclosure include accrued interest receivable, certain investment securities, servicing assets and miscella-
neous other assets. The carrying amount of accrued interest receivable approximates fair value. The carrying value of other assets not subject
to fair value disclosure totaled $3.0 billion at December 31, 2007 and $2.4 billion at December 31, 2006.
(4) The estimated fair value of commercial paper approximates carrying value due to the relatively short maturities.
(5) The fair value of deposits was estimated based upon a present value discounted cash flow analysis. Discount rates used in the present value
calculation range from 4.83% to 5.48% at December 31, 2007 and 5.15% to 5.34% at December 31, 2006.
(6) The difference between the carrying value of fixed-rate senior notes, variable rate senior notes and preferred capital securities and the corre-
sponding balances reflected in the consolidated balance sheets is accrued interest payable. These amounts are excluded from the other
liabilities balances in this table. Most fixed-rate notes were valued from quoted market estimates. In rare instances where market estimates
were not available, values were computed using a present value discounted cash flow analysis with a discount rate approximating current
market rates for issuances by CIT of similar term debt at the end of the year. Discount rates used in the present value calculation ranged from
3.51% to 9.21% at December 31, 2007 and 5.28% to 6.16% at December 31, 2006. The spread is substantially wider this year due to the low
interest rate environment and the widening of CIT credit spreads.
(7) Non-recourse, secured borrowings includes Student Lending and Home Lending at fair value as well as Trade Finance and Vendor Finance
where the fair value is approximately par.
(8) Preferred capital securities were valued using a present value discounted cash flow analysis with a discount rate approximating current mar-
ket rates of similar issuances at the end of the year.
(9) The estimated fair value of credit balances of factoring clients approximates carrying value due to their short settlement terms. Other liabili-
ties include accrued liabilities and deferred federal income taxes. Accrued liabilities and payables with no stated maturities have an estimated
fair value that approximates carrying value. The carrying value of other liabilities not subject to fair value disclosure totaled $0.7 billion and
$1.2 billion December 31, 2007 and 2006.
(10) CIT enters into derivative financial instruments for hedging purposes (FAS 133 and economic hedges) only. The estimated fair values are cal-
culated internally using market data and represent the net amount receivable or payable to terminate the agreement, taking into account
current market rates. See Note 10 — “Derivative Financial Instruments” for notional principal amounts and fair values associated with the
instruments.
NOTE 20 – CERTAIN RELATIONSHIPS AND RELATED tors’ representation, and share income and losses equally. The
TRANSACTIONS Snap-on joint venture is accounted for under the equity
Until December 31, 2007, CIT was a partner with Dell Inc. method and is not consolidated in CIT’s financial statements.
(“Dell”) in Dell Financial Services L.P. (“DFS”), a joint venture At both December 31, 2007 and 2006, financing and leasing
that offered financing to Dell’s customers. The joint venture assets were approximately $1.0 billion and securitized assets
provided Dell with financing and leasing capabilities that were included in managed assets were less than $0.1 billion.
complementary to its product offerings and provides CIT with Since December 2000, CIT has been a joint venture partner
a source of new financings. In December 2007, Dell exercised with Canadian Imperial Bank of Commerce (“CIBC”) in an
its right to buy CIT’s interest and the Company sold its 30% entity that is engaged in asset-based lending in Canada. Both
ownership interest in Dell Financial Services (DFS) joint ven- CIT and CIBC have a 50% ownership interest in the joint ven-
ture. The pre-tax gain on the sale of Dell Financial Services ture, and share income and losses equally. This entity is not
joint venture was $247.1 million. CIT has the right to purchase consolidated in CIT’s financial statements and is accounted for
a minimum percentage of DFS’s finance receivables on a under the equity method. CIT’s investment in and loans to the
declining scale through January 2010. See disclosures in joint venture were approximately $440 million and $224 mil-
Management’s Discussion and Analysis Concentrations and lion at December 31, 2007 and 2006.
Acquisitions and Dispositions for additional information.
In the first quarter of 2007, the Company formed Care
Prior to and subsequent to the sale, CIT regularly purchases Investment Trust Inc. (Care), an externally managed real
finance receivables from DFS at a premium, portions of which estate investment trust (RElT), formed principally to invest in
are typically securitized within 90 days of purchase from DFS. healthcare-related commercial mortgage debt and real
CIT has certain recourse to DFS on defaulted contracts. In estate. In conjunction with a June 2007 IPO, CIT contributed
accordance with the joint venture agreement, net income and approximately $280 million of loans to Care in return for cash
losses generated by DFS as determined under GAAP were and a 36% equity investment, of approximately $79 million, in
allocated 70% to Dell and 30% to CIT. The DFS board of direc- Care. A subsidiary of CIT provides services to Care pursuant to
tors voting representation was equally weighted between a management agreement. The investment in Care is
designees of CIT and Dell, with one independent director. DFS accounted for under the equity method, as CIT does not have a
PAGE 105
was not consolidated in CIT’s financial statements and was majority of the economics (expected losses and residual
accounted for under the equity method. Financing and leasing returns) in the entity.
assets related to the DFS program included in the CIT
Consolidated Balance Sheet (but excluding certain related CIT invests in various trusts, partnerships, and limited liability
international receivables originated directly by CIT) were corporations established in conjunction with structured
approximately $0.6 billion and $1.3 billion and securitized financing transactions of equipment, power and infrastructure
assets included in managed assets were approximately projects. CIT’s interests in certain of these entities were
$2.3 billion and $2.4 billion at December 31, 2007 and 2006, acquired by CIT in a 1999 acquisition, and others were subse-
respectively. For the year ended December 31, 2007, CIT’s 30% quently entered into in the normal course of business. Other
proportionate share of pretax income related to the joint ven- assets included approximately $11 million and $17 million of
ture was approximately $81.6 million, including $15 million in investments in non-consolidated entities relating to such
the fourth quarter of 2007, which was reported in other transactions that are accounted for under the equity or cost
income. CIT had no equity investment in or loans to the joint methods at December 31, 2007 and 2006.
venture at December 31, 2007 due to the sale, and $181 mil- The combination of investments in and loans to non-consoli-
lion at December 31, 2006. dated entities represents the Company’s maximum exposure
CIT also has a joint venture arrangement with Snap-on to loss, as the Company does not provide guarantees or other
Incorporated (“Snap-on”) that has a similar business purpose forms of indemnification to non-consolidated entities.
and model to the DFS arrangement described above, including Certain shareholders of CIT provide investment management,
limited credit recourse on defaulted receivables. The agree- banking and investment banking services in the normal
ment with Snap-on extends until January 2009. CIT and course of business.
Snap-on have 50% ownership interests, 50% board of direc-

NOTE 21 – BUSINESS SEGMENT INFORMATION Types of Products and Services

Management’s Policy in Identifying Reportable Segments CIT has six reportable segments: Corporate Finance,
CIT’s reportable segments are comprised of strategic busi- Transportation Finance, Trade Finance, Vendor Finance,
ness units or “verticals” that are aggregated into segments Consumer and Home Lending. Transportation Finance and
primarily based upon industry categories and to a lesser Vendor Finance offer secured lending and leasing products to
extent, the core competencies relating to product origination, midsize and larger companies across a variety of industries,
distribution methods, operations and servicing, and the nature including aerospace, rail, machine tool, business aircraft,
of their regulatory environment. This segment reporting is technology, manufacturing and transportation. Trade Finance
consistent with the presentation to management. and Corporate Finance offer secured lending and receivables
collection as well as other financial products and services to
Effective with the third quarter of 2007, and consistent with
small and midsize companies. These include secured revolv-
recent management changes, segment disclosures reflect the
ing lines of credit and term loans, credit protection, accounts
following changes. The presentation of prior period data has
receivable collection, import and export financing and factor-
been conformed to current period presentation.
ing, debtor-in-possession and turnaround financing and
_ The home lending business is being reported as a separate management advisory services. Consumer offers student
segment. lending through Student Loan Xpress and the operations of
CIT Bank, an industrial bank. Home Lending includes the
_ The student lending and consumer loan businesses previ-
mortgage operations, which were ceased during 2007.
ously in the Consumer and Small Business Lending
segment are reported in the Consumer segment.
_ The small business lending unit was transferred from the
former Consumer and Small Business Lending segment to
the Corporate Finance segment.
PAGE 106
Segment Profit and Assets

The following table presents reportable segment information and the reconciliation of segment balances to the consolidated financial
statement totals and the consolidated managed assets.
Corporate
Corporate Transportation Trade Vendor Commercial Home Total and
Finance _________________________
_________________ Finance Finance
________________ Finance
_________________ Segments
_____________________ Consumer
__________________ Lending
___________________ Segments
____________________ Other
_________________ Consolidated
______________________
For the Year Ended
December 31, 2007
Net finance revenue, before
depreciation $ 704.8 $ 911.9 $ 174.8 $ 1,150.7 $ 2,942.2 $ 133.3 $ 206.5 $ 3,282.0 $ (89.4) $ 3,192.6
Other income 622.1 74.0 281.0 585.5 1,562.6 47.2 (19.3) 1,590.5 (10.4) 1,580.1
Depreciation on operating lease
equipment 37.7 552.0 – 583.4 1,173.1 – – 1,173.1 (0.8) 1,172.3
Provision for credit losses 68.9 (32.0) 33.4 52.1 122.4 55.4 352.1 529.9 63.9 593.8
Salaries and general operating
expenses 472.5 154.7 157.4 482.3 1,266.9 93.5 114.3 1,474.7 4.0 1,478.7
Other pre-tax items(1) 22.5 _________________________
_________________ – –
________________ – _____________________
_________________ 22.5 312.7
__________________ 1,288.5
___________________ 1,623.7
____________________ 176.5
_________________ 1,800.2
______________________
(Loss) income before provision
for income taxes 725.3 311.2 265.0 618.4 1,919.9 (281.1) (1,567.7) 71.1 (343.4) (272.3)
Provision for income taxes and
other after tax items (272.3) _________________________
_________________ (40.1) (101.0)
________________ (208.3) _____________________
_________________ (621.7) 6.2
__________________ 578.5
___________________ (37.0)
____________________ 198.3
_________________ 161.3
______________________
Net (loss) income 453.0 _________________________
_________________ 271.1 164.0
________________ 410.1
_________________ 1,298.2
_____________________ (274.9)
__________________ (989.2)
___________________ 34.1
____________________ (145.1)
_________________ (111.0)
______________________
_________________ _________________________ ________________ _________________ _____________________ __________________ ___________________ ____________________ _________________ ______________________
Total financing and leasing
assets 22,599.3 13,582.9 7,330.4 11,953.4 55,466.0 12,331.4 9,121.4 76,918.8 – 76,918.8
Total managed assets 24,126.0 13,582.9 7,330.4 16,057.4 61,096.7 12,331.4 9,801.9 83,230.0 – 83,230.0
For the Year Ended
December 31, 2006
PAGE 107
depreciation $ 611.0 $ 739.8 $ 162.7 $ 1,036.5 $ 2,550.0 $ 116.0 $ 203.8 $ 2,869.8 $ (43.7) $ 2,826.1
Other income 381.7 68.1 291.4 388.9 1,130.1 63.0 57.3 1,250.4 (1.6) 1,248.8
Depreciation on operating
lease equipment 33.4 455.3 – 534.8 1,023.5 – – 1,023.5 – 1,023.5
Provision for credit losses 48.8 2.2 38.0 45.4 134.4 16.1 62.4 212.9 9.3 222.2
Salaries and general operating
expenses 467.0 130.0 156.3 397.1 1,150.4 107.4 132.8 1,390.6 (8.0) 1,382.6
Other pre-tax items(1) –
_________________ 15.0
_________________________ –
________________ –
_________________ 15.0
_____________________ –
__________________ –
___________________ 15.0
____________________ 19.6
_________________ 34.6
______________________
Income (loss) before provision
for income taxes 443.5 205.4 259.8 448.1 1,356.8 55.5 65.9 1,478.2 (66.2) 1,412.0
Provision for income taxes
and other after tax items (159.2) _________________________
_________________ 54.4 (97.6)
________________ (172.3) _____________________
_________________ (374.7) (13.7)
__________________ (24.7)
___________________ (413.1)
____________________ 16.9
_________________ (396.2)
______________________
Net income (loss) 284.3
_________________ 259.8
_________________________ 162.2
________________ 275.8
_________________ 982.1
_____________________ 41.8
__________________ 41.2
___________________ 1,065.1
____________________ (49.3)
_________________ 1,015.8
______________________
_________________ _________________________ ________________ _________________ _____________________ __________________ ___________________ ____________________ _________________ ______________________
assets 21,010.7 12,070.7 6,975.2 8,385.4 48,442.0 9,358.6 10,101.3 67,901.9 – 67,901.9
For the Year Ended
December 31, 2005
depreciation $ 525.6 $ 580.0 $ 149.0 $ 1,099.7 $ 2,354.3 $ 72.0 $ 158.8 $ 2,585.1 $ 18.1 $ 2,603.2
Other income 323.7 36.5 290.9 330.0 981.1 47.6 31.8 1,060.5 183.5 1,244.0
lease equipment 45.8 354.9 – 567.3 968.0 – – 968.0 – 968.0
Provision for credit losses 49.4 4.5 25.2 47.2 126.3 9.8 51.7 187.8 29.2 217.0
Salaries and general
operating expenses 326.5 104.9 137.3 351.5 920.2 38.8 142.4 1,101.4 12.4 1,113.8
Other pre-tax items(1) – _________________________
_________________ 86.6 –
________________ – _____________________
_________________ 86.6 –
__________________ 20.0
___________________ 106.6
____________________ 25.2
_________________ 131.8
______________________
for income taxes 427.6 65.6 277.4 463.7 1,234.3 71.0 (23.5) 1,281.8 134.8 1,416.6
and other after tax items (161.1) _________________________
_________________ 50.7 (103.9)
________________ (173.9) _____________________
_________________ (388.2) (24.6)
__________________ 7.8
___________________ (405.0)
____________________ (75.2)
_________________ (480.2)
______________________
Net income (loss) 266.5
_________________ 116.3
_________________________ 173.5
________________ 289.8
_________________ 846.1
_____________________ 46.4
__________________ (15.7)
___________________ 876.8
____________________ 59.6
_________________ 936.4
______________________
_________________ _________________________ ________________ _________________ _____________________ __________________ ___________________ ____________________ _________________ ______________________
Total financing and
easing assets 15,426.9 10,484.4 6,691.4 8,817.8 41,420.5 5,608.2 8,552.0 55,580.7 – 55,580.7
(1) Includes valuation allowances, goodwill and intangible impairment charges, debt termination charges and severance and real estate exit provisions.

Finance income and other revenues derived from United Vendor Finance Billing and Invoicing Investigation
States based financing and leasing assets were $6,584.8 mil- In the second quarter of 2007, the office of the United States
lion, $5,468.8 million and $4,617.6 million for the years ended Attorney for the Central District of California requested that
December 31, 2007, 2006 and 2005. Finance income and other CIT produce the billing and invoicing histories for a portfolio of
revenues derived from foreign based financing and leasing customer accounts that CIT purchased from a third-party ven-
assets, were $2,020.2 million, $1,458.9 million and $1,055.6 dor. The request was made in connection with an ongoing
million for the years ended December 31, 2007, 2006 and 2005. investigation being conducted by federal authorities into
billing practices involving that portfolio. State authorities in
NOTE 22 – LEGAL PROCEEDINGS California have been conducting a parallel investigation. It
Student Loan Investigations appears the investigations are being conducted under the fed-
Student Loan Xpress, Inc. (“SLX”), a subsidiary of CIT, is eral False Claims Act and its California equivalent. CIT is
engaged in the student lending business. In connection with cooperating with these investigations. Based on the facts
investigations into (i) the relationships between student known to date, CIT cannot determine the outcome of these
lenders and the colleges and universities that recommend investigations at this time.
such lenders to their students, and (ii) the business practices Other Litigation
of student lenders, CIT and/or SLX have received requests for
In addition, there are various legal proceedings and govern-
information from several state Attorneys General and several
ment investigations against or including CIT, which have
federal governmental agencies. In May, 2007, CIT entered into
arisen in the ordinary course of business. While the outcomes
an Assurance of Discontinuance (the “AOD”) with the New York
of the ordinary course legal proceedings and the related activi-
Attorney General (the “NYAG”), pursuant to which CIT con-
ties are not certain, based on present assessments,
tributed $3.0 million into a fund established to educate
management does not believe that they will have a material
students and their parents concerning student loans and
adverse effect on CIT.
agreed to cooperate with the NYAG’s investigation, in
exchange for which, the NYAG agreed to discontinue its inves-
NOTE 23 – GOODWILL AND INTANGIBLE ASSETS
tigation concerning certain alleged conduct by SLX. CIT is fully
The following tables summarize goodwill and intangible
PAGE 108
cooperating with the remaining investigations.

assets, net balances by segment.
Corporate Trade Vendor
Goodwill Finance
__________________ Finance
__________________ Finance
__________________ Consumer
__________________ Total
__________________
Balance at December 31, 2005 $208.6 $261.5 $ 54.3 $ 270.7 $ 795.1
Acquisitions, other 14.1

__________________ 8.6
__________________ (41.5)
__________________ 15.8
__________________ (3.0)
__________________
Balance at December 31, 2006 222.7 270.1 12.8 286.5 792.1
Acquisitions, other 74.2 1.0 393.2 – 468.4
Impairment –
__________________ –
__________________ –
__________________ (286.5)
__________________ (286.5)
__________________
Balance at December 31, 2007 $296.9
__________________
__________________ $271.1
__________________
__________________ $406.0
__________________
__________________ $ –
__________________
__________________ $ 974.0
__________________
__________________
Intangible Assets
Balance at December 31, 2005 $ 26.5 $115.5 $ 45.5 $ 28.9 $ 216.4
Acquisitions, other 6.8 4.1 11.1 – 22.0
Amortization (2.9)
__________________ (10.2)
__________________ (7.9)
__________________ (1.1)
__________________ (22.1)
__________________
Balance at December 31, 2006 30.4 109.4 48.7 27.8 216.3
Acquisitions, other (0.5) 0.4 7.0(1) – 6.9
Amortization (3.3) (7.0) (6.6) (1.6) (18.5)
Impairment –
__________________ –
__________________ –
__________________ (26.2)(2)
__________________ (26.2)
__________________
Balance at December 31, 2007 $ 26.6
__________________ $102.8
__________________ $ 49.1
__________________ $ –
__________________ $ 178.5
__________________
__________________ __________________ __________________ __________________ __________________
(1) Includes reduction due to sale of Systems Leasing $40.2 million intangibles, net of $15.4 million accumulated amortization
(2) Impairment of SLX intangibles of $29.4 million, net of $3.2 million accumulated amortization
The following tables summarize the projected amortization for the next five years.
2008
___________ 2009
___________ 2010
___________ 2011
___________ 2012
___________
Future Intangible Amortization $19.6 $18.7 $17.7 $16.8 $15.9
In accordance with SFAS No. 142, “Goodwill and Other student lending business as of December 31, 2007. In per-
Intangible Assets” (“SFAS 142”), goodwill is no longer amor- forming its impairment test, management calculated the
tized but instead is assessed periodically for impairment. The estimated fair value of the student lending business utilizing
Company periodically reviews and evaluates its goodwill and observable market valuation data applied to the unit’s pro-
intangible assets for potential impairment at a minimum jected cash flows, which indicated that book value of equity
annually, on October 1, or more frequently if circumstances exceeded fair value. SFAS 142 requires a second analysis
indicate that impairment is possible. whenever book value exceeds fair value to determine the
related impairment charge. In this analysis, management
The Company entered the student lending business in
estimated the fair value of the unit’s individual assets and lia-
February 2005 with the acquisition of Education Lending,
bilities (primarily loans and debt), and determined that the
Group Inc. During the third quarter of 2007, federal legislation
impairment charge of $312.1 million, representing the entire
was passed that affects the student lending business. Among
goodwill and intangible asset balance, was required.
other things, the legislation reduces the maximum interest
rates that can be charged by lenders in connection with a vari- In addition to performing an impairment assessment for the
ety of loan products, increases loan origination fees paid to the student lending unit, management assessed as of December 31,
government by lenders, and reduces the lender guarantee 2007 whether there was impairment of goodwill or intangibles in
percentage. The legislation is effective for all new FFELP stu- reporting units within the Corporate Finance, Trade Finance and
dent loans with first disbursements on or after October 1, Vendor Finance segments. Management determined that no
2007. The reduced guarantee percentage, from 97% to 95%, impairment charge for these three segments was required.
PAGE 109
will be in effect for loans originated after October 1, 2012. As a
The additions to goodwill and intangible assets in 2007 related
result, in the third quarter, management assessed the value of
to acquisitions of the Edgeview Partners advisory service busi-
goodwill and intangible assets associated with the student
ness by Corporate Finance, the U.S. Business Technology
lending business following the passage of the legislation.
Finance unit of Citigroup, Inc. and the Barclays UK and
Based on management’s assessment of the legislation’s
German vendor finance (both by Vendor Finance).
potential impact on earnings levels for new loan originations,
factoring in expected ensuing business practices and lever- Other intangible assets, net, are comprised primarily of
age, coupled with assumptions and projected cash flows of the acquired customer relationships, and are amortized over their
existing business, management concluded that the goodwill corresponding lives ranging from five to twenty years in rela-
and intangibles assets related to the student lending business tion to the related cash flows, where applicable. Amortization
were not impaired at that time. expense totaled $18.5 million, $22.1 million and $21.2 million
for the years ended December 31, 2007, 2006 and 2005.
During the fourth quarter of 2007, market valuations for stu-
Accumulated amortization totaled $71.2 million and
dent lending businesses declined further, reflecting a failed
$67.0 million at December 31, 2007 and 2006. Projected amor-
sale of a significant student lender, the market’s continued
tization for the years ended December 31, 2008 through
emerging view of the legislative changes and the general diffi-
December 31, 2012 is $19.6 million, $18.7 million, $17.7 mil-
cult environment for lenders in this sector, including higher
lion, $16.8 million and $15.9 million.
funding costs. As a result, management performed an impair-
ment test for the goodwill and intangible assets related to the

NOTE 24 – SEVERANCE AND FACILITY RESTRUCTURING employees and closing facilities, as well as 2006 and 2007
RESERVES restructuring activities:
The following table summarizes previously established pur-
chase accounting liabilities (pre-tax) related to severance of
Severance
_______________________ Facilities
_______________________
Number of Number of Total
Employees
____________________ Reserve
_______________ Facilities
____________________ Reserve
_______________ Reserves
_________________
Balance December 31, 2005 23 $ 8.1 9 $ 5.1 $ 13.2
2006 additions 146 17.2 1 7.5 24.7
2006 utilization (150)
____________________ (19.9)
_______________ (5)
____________________ (1.1)
_______________ (21.0)
_________________
Balance December 31, 2006 19 5.4 5 11.5 16.9
2007 additions 1,093 76.7 33 3.0 79.7
2007 utilization (1,053)
____________________ (65.4)
_______________ (2)
____________________ (5.9)
_______________ (71.3)
_________________
Balance December 31, 2007 59
____________________ $ 16.7
_______________ 36
____________________ $ 8.6
_______________ $ 25.3
_________________
____________________ _______________ ____________________ _______________ _________________
The severance additions during 2007 primarily relate to offices. The ending facilities reserves relate primarily to short-
employee termination benefits incurred in conjunction with falls in sublease transactions and will be utilized over the
closing the home lending origination platform (approximately remaining terms of 5 years or less.
550 employees, $25 million), as well as various organization
efficiency initiatives. These additions, along with charges NOTE 25 – SUMMARIZED FINANCIAL INFORMATION OF
PAGE 110
related to accelerated vesting of equity and other benefits, SUBSIDIARIES

were recorded as part of the $76.8 million restructuring provi- The following presents condensed consolidating financial
sion. Of this amount $17.1 million relates to the acquisition of information for CIT Holdings LLC. CIT has guaranteed on a full
Vendor Finance businesses in Europe and the United States, and unconditional and a joint and several basis the existing
which was recorded as fair value adjustments to purchased debt securities that were registered under the Securities Act
liabilities/adjustments to goodwill. of 1933 and certain other indebtedness of this subsidiary. CIT
has not presented related financial statements or other infor-
The additions during 2006 relate to employee termination bene-

fits incurred in conjunction with the business unit and segment mation for this subsidiary on a stand-alone basis. No
realignments, as well as various streamlining and consolidation subsidiaries within “Other Subsidiaries” in the following tables
initiatives. These additions, along with charges related to accel- have unconditionally guaranteed debt securities for any other
erated vesting of equity, and other benefits, were recorded as CIT subsidiary. Included under “Other Subsidiaries” is a 100%-
part of the $19.6 million restructuring provision. owned finance subsidiary of CIT Group Inc., Canadian Funding
Company LLC, for which CIT has fully and unconditionally
The facilities additions during 2007 relate to properties of the guaranteed the debt securities.
aforementioned restructuring, including 27 home lending
CONSOLIDATING BALANCE SHEETS (dollars in millions)

CIT
CONSOLIDATING CIT Holdings Other
BALANCE SHEETS
________________________________ Group Inc.
__________________ LLC
_______________ Subsidiaries
______________________ Eliminations
______________________ Total
_________________
December 31, 2007
ASSETS
Net finance receivables $ 2,373.4 $3,358.4 $55,973.2 $ – $61,705.0
Operating lease equipment, net 8.6 292.0 12,309.9 – 12,610.5
Finance receivables held for sale – 253.3 1,352.7 – 1,606.0
Cash and cash equivalents 3,171.0 30.5 3,590.8 – 6,792.3
__________________ 261.0
_______________ 1,110.3
______________________ (6,960.6)
______________________ 7,534.2
_________________
Total Assets $ 18,676.5
__________________ $4,195.2
_______________ $74,336.9
______________________ $(6,960.6)
______________________ $90,248.0
_________________
__________________ _______________ ______________________ ______________________ _________________
LIABILITIES AND STOCKHOLDERS’ EQUITY
Debt and deposits $ 49,525.6 $2,346.7 $21,931.9 $ – $73,804.2
Credit balances of factoring clients – – 4,542.2 – 4,542.2
Accrued liabilities and payables (37,809.7)
__________________ 1,164.9
_______________ 41,528.3
______________________ –
______________________ 4,883.5
_________________
Total Liabilities 11,715.9 3,511.6 68,002.4 – 83,229.9
Minority interest – – 57.5 – 57.5
__________________ 683.6
_______________ 6,277.0
______________________ (6,960.6)
______________________ 6,960.6
_________________
Total Liabilities and Stockholders’ Equity $ 18,676.5
__________________ $4,195.2
_______________ $74,336.9
______________________ $(6,960.6)
______________________ $90,248.0
_________________
__________________ _______________ ______________________ ______________________ _________________
December 31, 2006
PAGE 111
ASSETS
Net finance receivables $ 926.5 $2,752.3 $50,726.8 $ – $54,405.6
Operating lease equipment, net 9.3 216.4 10,792.2 – 11,017.9
Finance receivables held for sale – – 1,793.7 – 1,793.7
Cash and cash equivalents 3,040.3 227.8 1,190.3 – 4,458.4
__________________ 169.7
_______________ 2,488.8
______________________ (7,751.1)
______________________ 5,810.1
_________________
Total Assets $ 14,878.8
__________________ $3,366.2
_______________ $66,991.8
______________________ $(7,751.1)
______________________ $77,485.7
_________________
__________________ _______________ ______________________ ______________________ _________________
LIABILITIES AND STOCKHOLDERS’ EQUITY
Debt and deposits $ 49,825.9 $2,785.9 $8,093.0 $ – $60,704.8
Credit balances of factoring clients – – 4,131.3 – 4,131.3
Accrued liabilities and payables (42,698.2)
__________________ 289.5
_______________ 47,267.3
______________________ –
______________________ 4,858.6
_________________
Total Liabilities 7,127.7 3,075.4 59,491.6 – 69,694.7
Minority interest – – 39.9 – 39.9
__________________ 290.8
_______________ 7,460.3
______________________ (7,751.1)
______________________ 7,751.1
_________________
Total Liabilities and Stockholders’ Equity $ 14,878.8
__________________ $3,366.2
_______________ $66,991.8
______________________ $(7,751.1)
______________________ $77,485.7
_________________
__________________ _______________ ______________________ ______________________ _________________

CONSOLIDATING STATEMENTS OF INCOME (dollars in millions)

CIT
STATEMENTS OF INCOME
_____________________________________________ Group Inc.
__________________ LLC
______________________ Eliminations
______________________ Total
_________________
Finance revenue $ 94.6 $371.8 $6,558.5 $ – $7,024.9
Interest expense 52.4 155.0 3,624.9 – 3,832.3
Depreciation on operating lease equipment 0.7
__________________ 79.5
_______________ 1,092.1
______________________ –
______________________ 1,172.3
_________________
Net finance revenue 41.5 137.3 1,841.5 – 2,020.3
__________________ 21.6
_______________ 522.1
______________________ –
______________________ 593.8
_________________
Net finance revenue after credit provision (8.6) 115.7 1,319.4 – 1,426.5
Equity in net income of subsidiaries 129.6 – – (129.6) –
Valuation allowance for receivables held for sale –
__________________ _______________– 1,271.4
______________________ –
______________________ 1,271.4
_________________
Net finance revenue, after credit provision
and valuation allowance 121.0 115.7 48.0 (129.6) 155.1
Other income (63.5)
__________________ 67.9
_______________ 1,575.7
______________________ –
______________________ 1,580.1
_________________
Total net revenue after valuation allowance 57.5 183.6 1,623.7 (129.6) 1,735.2
Salaries and general operating expenses 112.6 92.5 1,273.6 – 1,478.7
Provision for severance and real estate exit activities – – 76.8 – 76.8
Loss on early extinguishments of debt 139.3 – – – 139.3
Impairment of goodwill and intangible assets –
__________________ _______________– 312.7
______________________ –
______________________ 312.7
_________________
(Loss) income before provision for income taxes (194.4) 91.1 (39.4) (129.6) (272.3)
PAGE 112
Benefit (provision) for income taxes 113.4 (33.5) 114.5 – 194.4

Minority interest, after tax –
__________________ _______________– (3.1)
______________________ –
______________________ (3.1)
_________________
Net (loss) income before preferred stock dividends (81.0) 57.6 72.0 (129.6) (81.0)
__________________ _______________– –
______________________ –
______________________ (30.0)
_________________
Net (loss) income (attributable) available
to common stockholders $ (111.0) $ 57.6 $ 72.0 $ (129.6) $ (111.0)
__________________
__________________ _______________
_______________ ______________________
______________________ ______________________
______________________ _________________
_________________
Finance revenue $ 55.1 $312.0 $5,326.8 $ – $5,693.9
Interest expense 3.5 141.9 2,722.4 – 2,867.8
Depreciation on operating lease equipment 0.3
__________________ 63.0
_______________ 960.2
______________________ –
______________________ 1,023.5
_________________
__________________ 21.0
_______________ 168.3
______________________ –
______________________ 222.2
_________________
Net finance revenue after credit provision 18.4 86.1 1,475.9 – 1,580.4
Equity in net income of subsidiaries 1,131.6 – – (1,131.6) –
__________________ _______________– 15.0
______________________ –
______________________ 15.0
_________________
and valuation allowance 1,150.0 86.1 1,460.9 (1,131.6) 1,565.4
Other income 1.5
__________________ 86.9
_______________ 1,160.4
______________________ –
______________________ 1,248.8
_________________
Total net revenue after valuation allowance 1,151.5 173.0 2,621.3 (1,131.6) 2,814.2
Salaries and general operating expenses 232.3 85.7 1,064.6 – 1,382.6
Provision for severance and real estate exit activities –
__________________ _______________– 19.6
______________________ –
______________________ 19.6
_________________
Income (loss) before provision for income taxes 919.2 87.3 1,537.1 (1,131.6) 1,412.0
Benefit (provision) for income taxes 126.8 (32.1) (459.1) – (364.4)
Minority interest, after tax –
__________________ _______________– (1.6)
______________________ –
______________________ (1.6)
_________________
Net income before preferred stock dividends 1,046.0 55.2 1,076.4 (1,131.6) 1,046.0
__________________ _______________– –
______________________ –
______________________ (30.2)
_________________
Net income available to common stockholders $1,015.8
__________________ $ 55.2
_______________ $1,076.4
______________________ $(1,131.6)
______________________ $1,015.8
_________________
__________________ _______________ ______________________ ______________________ _________________
CONSOLIDATING STATEMENTS OF INCOME (dollars in millions) (continued)

CIT
STATEMENTS OF INCOME
_____________________________________________ Group Inc.
__________________ LLC
______________________ Eliminations
______________________ Total
_________________
Finance revenue $ 41.0 $242.5 $4,231.7 $ – $4,515.2
Interest expense (56.1) 99.5 1,868.6 – 1,912.0
Depreciation on operating lease equipment –
__________________ 48.2
_______________ 919.8
______________________ –
______________________ 968.0
_________________
__________________ 13.7
_______________ 185.2
______________________ –
______________________ 217.0
_________________
Net finance revenue, after credit provision 79.0 81.1 1,258.1 – 1,418.2
Equity in net income of subsidiaries 973.3 – – (973.3) –
__________________ _______________– 106.6
______________________ –
______________________ 106.6
_________________
and valuation allowance 1,052.3 81.1 1,151.5 (973.3) 1,311.6
Other income 38.2
__________________ 109.8
_______________ 1,096.0
______________________ –
______________________ 1,244.0
_________________
Total net revenue after valuation allowance 1,090.5 190.9 2,247.5 (973.3) 2,555.6
Salaries and general operating expenses 154.4 81.0 878.4 – 1,113.8
Provision for severance and real estate exit activities –
__________________ _______________– 25.2
______________________ –
______________________ 25.2
_________________
Income (loss) before provision for income taxes 936.1 109.9 1,343.9 (973.3) 1,416.6
Benefit (provision) for income taxes 13.0 (40.4) (436.8) – (464.2)
Minority interest, after tax – _______________– (3.3) – (3.3)
PAGE 113
__________________ ______________________ ______________________ _________________
Net income before preferred stock dividends 949.1 69.5 903.8 (973.3) 949.1
__________________ _______________– –
______________________ –
______________________ (12.7)
_________________
Net income available to common stockholders $ 936.4
__________________ $ 69.5
_______________ $ 903.8
______________________ $ (973.3)
______________________ $ 936.4
_________________
__________________ _______________ ______________________ ______________________ _________________

CONSOLIDATING STATEMENTS OF CASH FLOWS (dollars in millions)

CIT
CIT Holdings Other
Group Inc.
__________________ LLC
______________________ Eliminations
______________________ Total
_________________
Cash Flows From Operating Activities:
Net cash flows provided by (used for) operations $(2,741.4)
__________________ $ 3,124.1
_______________ $ 1,946.3
______________________ $ –
______________________ $_________________
2,329.0
Cash Flows From Investing Activities:
Net increase (decrease) in financing and leasing assets (1,496.5) (1,050.9) (8,206.3) – (10,753.7)
Decrease in inter-company loans and investments 5,609.1
__________________ _______________– –
______________________ (5,609.1)
______________________ –
_________________
Net cash flows (used for) provided by investing activities 4,112.6
__________________ (1,050.9)
_______________ (8,206.3)
______________________ (5,609.1)
______________________ (10,753.7)
_________________
Cash Flows From Financing Activities:
Net increase (decrease) in debt (1,018.6) (439.2) 12,138.1 – 10,680.3
Inter-company financing – (1,831.3) (3,777.8) 5,609.1 –
Cash dividends paid (221.9)
__________________ _______________– –
______________________ –
______________________ (221.9)
_________________
Net cash flows provided by (used for) financing activities (1,240.5)
__________________ (2,270.5)
_______________ 8,360.3
______________________ 5,609.1
______________________ 10,458.4
_________________
Net (decrease) increase in cash and cash equivalents 130.7 (197.3) 2,100.3 – 2,033.7
Unrestricted cash and cash equivalents, beginning of period__________________
3,040.3 227.8
_______________ 1,011.3
______________________ –
______________________ 4,279.4
_________________
Unrestricted cash and cash equivalents, end of period $ 3,171.0
__________________ $ 30.5
_______________ $ 3,111.6
______________________ $ –
______________________ $_________________
6,313.1
__________________ _______________ ______________________ ______________________ _________________
PAGE 114
Net cash flows provided by (used for) operations $ (655.1)

__________________ $(2,345.9)
_______________ $ 4,249.3
______________________ $ –
______________________ $_________________
1,248.3
Net increase (decrease) in financing and leasing assets 73.3 (414.9) (11,171.8) – (11,513.4)
Decrease in inter-company loans and investments (8,447.3)
__________________ _______________– –
______________________ 8,447.3
______________________ –
_________________
Net cash flows (used for) provided by investing activities (8,374.0)
__________________ (414.9)
_______________ (11,171.8)
______________________ 8,447.3
______________________ (11,513.4)
_________________
Net increase (decrease) in debt 9,647.3 479.8 1,263.4 – 11,390.5

Inter-company financing – 2,379.2 6,068.1 (8,447.3) –
__________________ _______________– –
______________________ –
______________________ (193.5)
_________________
Net cash flows provided by (used for) financing activities 9,453.8
__________________ 2,859.0
_______________ 7,331.5
______________________ (8,447.3)
______________________ 11,197.0
_________________
Net (decrease) increase in cash and cash equivalents 424.7 98.2 409.0 – 931.9
2,615.6 129.6
_______________ 602.3
______________________ –
______________________ 3,347.5
_________________
__________________ $ 227.8
_______________ $ 1,011.3
______________________ $ –
______________________ $_________________
4,279.4
__________________ _______________ ______________________ ______________________ _________________
CONSOLIDATING STATEMENTS OF CASH FLOWS (dollars in millions) (continued)

CIT
CIT Holdings Other
Group Inc.
__________________ LLC
______________________ Eliminations
______________________ Total
_________________
Net cash flows provided by (used for) operations $ 3,792.7
__________________ $ 273.7
_______________ $(1,131.4)
______________________ $ –
______________________ $ 2,935.0
_________________
Net increase (decrease) in financing and leasing assets 61.1 (760.8) (5,993.3) – (6,693.0)
Decrease in inter-company loans and investments (7,675.4)
__________________ _______________– –
______________________ 7,675.4
______________________ –
_________________
Net cash flows (used for) provided by investing activities (7,614.3)
__________________ (760.8)
_______________ (5,993.3)
______________________ 7,675.4
______________________ (6,693.0)
_________________
Net increase (decrease) in debt 5,267.2 922.3 (1,152.8) – 5,036.7
Inter-company financing – (433.1) 8,108.5 (7,675.4) –
__________________ _______________– –
______________________ –
______________________ (141.4)
_________________
Net cash flows provided by (used for) financing activities 5,125.8
__________________ 489.2
_______________ 6,955.7
______________________ (7,675.4)
______________________ 4,895.3
_________________
Net (decrease) increase in cash and cash equivalents 1,304.2 2.1 (169.0) – 1,137.3
1,311.4 127.5
_______________ 771.3
______________________ –
______________________ 2,210.2
_________________
__________________ $ 129.6
_______________ $ 602.3
______________________ $ –
______________________ $ 3,347.5
_________________
__________________ _______________ ______________________ ______________________ _________________
PAGE 115

NOTE 26 – SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized consolidated quarterly financial data is presented below.
(dollars in millions, except per share data)
First Second Third Fourth
Year Ended December 31, 2007 Quarter
______________ Quarter
______________ Quarter
______________ Quarter
______________
Net finance revenue $ 479.9 $ 523.2 $529.9 $ 487.3
Provision for credit losses 71.1 73.0 64.2 385.5
Valuation allowance for receivables held for sale – 787.9 465.5 18.0
Other income 328.5 509.1 276.3 466.2
Salaries and general operating expenses 355.8 378.0 367.9 377.0
Provision for severance and real estate exit activities – 34.9 41.9 –
Loss on early extinguishments of debt 139.3 – – –
Goodwill and intangible asset impairment charges – – – 312.7
(Provision) benefit for income taxes (34.1) 114.7 95.6 18.2
Minority interest after tax (0.1) (0.2) (1.1) (1.7)
Preferred stock dividends (7.5) (7.5) (7.5) (7.5)
Net income (loss) $ 200.5 $ (134.5) $ (46.3) $(130.7)
Net income (loss) per diluted share $ 1.01 $ (0.70) $ (0.24) $ (0.69)
PAGE 116
Valuation allowance for receivables held for sale – – 15.0 –

Other income 260.1 303.5 339.7 345.5
Provision for severance and real estate exit activities 11.1 – 8.5 –
Provision for income taxes (101.3) (111.9) (39.7) (111.5)
Preferred stock dividends (7.7) (7.5) (7.5) (7.5)

Net income $ 229.7 $ 236.0 $290.8 $ 259.3
Net income per diluted share $ 1.12 $ 1.16 $ 1.44 $ 1.28
Valuation allowance for receivables held for sale – – 106.6 –
Other income 276.5 332.6 346.1 288.8
Provision for severance and real estate exit activities – 25.2 – –
Provision for income taxes (137.6) (132.9) (86.8) (106.9)
Preferred stock dividends – – (5.2) (7.5)
Net income $ 227.6 $ 249.1 $211.4 $ 248.3
Net income per diluted share $ 1.06 $ 1.16 $ 1.02 $ 1.21
Summarized quarterly financial data by segment for the year ended December 31, 2007 is presented below:
Corporate
Finance _________________________
___________________ Finance Finance
_________________ Finance
___________________ Segments
_____________________ Consumer
___________________ Lending
_________________ Segments
___________________ Other
_______________________
For the Quarter Ended
December 31, 2007
depreciation $ 181.4 $ 244.4 $ 46.3 $ 300.9 $ 773.0 $ 29.3 $ 26.4 $ 828.7 $(29.7) $ 799.0
Other income 92.0 16.5 74.4 318.0 500.9 4.7 (38.4) 467.2 (1.0) 466.2
lease equipment 9.8 144.8 – 157.4 312.0 – – 312.0 (0.3) 311.7
operating expenses 124.0 50.5 36.3 122.5 333.3 22.4 19.1 374.8 2.2 377.0
________________ –
_____________________ –
______________ – __________________
________________ – 312.7
________________ 18.0
_______________ 330.7
________________ –
_______________ 330.7
___________________
(Loss) income before
provision for income taxes 115.6 72.4 77.1 310.6 575.7 (327.5) (305.2) (57.0) (82.7) (139.7)
and other after tax items (45.3) _____________________
________________ (10.8) (29.3)
______________ (105.1) __________________
________________ (190.5) 16.7
________________ 116.5
_______________ (57.3)
________________ 66.3 ___________________
_______________ 9.0
Net (loss) income $ 70.3 $ 61.6
________________ _____________________ $______________
47.8 $________________
205.5 __________________
$ 385.2 $________________
(310.8) $ (188.7)
_______________ $________________
(114.3) $(16.4)
_______________ $ (130.7)
___________________
________________ _____________________ ______________ ________________ __________________ ________________ _______________ ________________ _______________ ___________________
assets 22,599.3 13,582.9 7,330.4 11,953.4 55,466.0 12,331.4 9,121.4 76,918.8 – 76,918.8
September 30, 2007
depreciation $ 170.1 $ 229.8 $ 45.1 $ 306.4 $ 751.4 $ 36.6 $ 68.1 $ 856.1 $(21.5) $ 834.6
Other income 99.2 20.4 72.3 76.8 268.7 7.3 (0.7) 275.3 1.0 276.3
PAGE 117
lease equipment 7.5 136.7 – 160.8 305.0 – – 305.0 (0.3) 304.7
________________ –
_____________________ –
______________ – __________________
________________ – –
________________ 505.1
_______________ 505.1
________________ 2.3
_______________ 507.4
___________________
for income taxes 131.9 81.0 70.2 90.6 373.7 12.1 (469.2) (83.4) (49.9) (133.3)
________________ (10.7) (26.7)
______________ (32.4) __________________
________________ (118.4) (2.7)
________________ 178.6
_______________ 57.5
________________ 29.5 ___________________
_______________ 87.0
Net income (loss) $ 83.3 _____________________
________________ $ 70.3 $______________
43.5 $ 58.2 __________________
________________ $ 255.3 $ 9.4
________________ $ (290.6)
_______________ $________________
(25.9) $(20.4) ___________________
_______________ $ (46.3)
________________ _____________________ ______________ ________________ __________________ ________________ _______________ ________________ _______________ ___________________
assets 21,509.0 13,102.9 7,945.9 12,686.7 55,244.5 12,420.1 10,058.3 77,722.9 – 77,722.9
June 30, 2007
depreciation $ 185.8 $ 226.9 $ 42.0 $ 291.9 $ 746.6 $ 35.5 $ 58.0 $ 840.1 $(24.6) $ 815.5
Other income 328.5 19.4 66.5 79.7 494.1 17.4 8.3 519.8 (10.7) 509.1
lease equipment 10.6 137.0 – 144.8 292.4 – – 292.4 (0.1) 292.3
Provision for credit losses 11.4 0.3 10.3 5.8 27.8 7.8 60.3 95.9 (22.9) 73.0
Other pre-tax items(1) 22.5
________________ –
_____________________ –
______________ – __________________
________________ 22.5 –
________________ 765.4
_______________ 787.9
________________ 34.9
_______________ 822.8
___________________
for income taxes 352.3 73.6 57.8 100.8 584.5 18.0 (792.3) (189.8) (51.7) (241.5)
________________ (10.7) (21.7)
______________ (30.7) __________________
________________ (196.1) (2.9)
________________ 281.9
_______________ 82.9
________________ 24.1 ___________________
_______________ 107.0
Net income (loss) $ 219.3 _____________________
________________ $ 62.9 $______________
36.1 $ 70.1 __________________
________________ $ 388.4 $________________
15.1 $ (510.4)
_______________ $ (106.9)
________________ $(27.6) ___________________
_______________ $ (134.5)
________________ _____________________ ______________ ________________ __________________ ________________ _______________ ________________ _______________ ___________________
assets 20,256.4 12,681.9 6,900.5 12,516.8 52,355.6 11,127.0 10,549.6 74,032.2 – 74,032.2

Corporate
Finance _________________________
___________________ Finance Finance
_________________ Finance
___________________ Segments
_____________________ Consumer
___________________ Lending
_________________ Segments
___________________ Other
_______________________
March 31, 2007
depreciation $ 167.5 $ 210.8 $ 41.4 $ 251.5 $ 671.2 $ 31.9 $ 54.0 $ 757.1 $ (13.6) $ 743.5
Other income 102.4 17.7 67.8 111.0 298.9 17.8 11.5 328.2 0.3 328.5
lease equipment 9.8 133.5 – 120.4 263.7 – – 263.7 (0.1) 263.6
operating expenses 114.1 33.3 41.3 115.3 304.0 25.5 31.2 360.7 (4.9) 355.8
________________ –
_____________________ –
______________ – __________________
________________ – –
________________ –
_______________ –
________________ 139.3
_______________ 139.3
___________________
for income taxes 125.5 84.2 59.9 116.4 386.0 16.3 (1.0) 401.3 (159.1) 242.2
________________ (7.9) (23.3)
______________ (40.1) __________________
________________ (116.7) (4.9)
________________ 1.5
_______________ (120.1)
________________ 78.4 ___________________
_______________ (41.7)
Net income (loss) $ 80.1 _____________________
________________ $ 76.3 $ 36.6
______________ $ 76.3 __________________
________________ $ 269.3 $________________
11.4 $ 0.5
_______________ $________________
281.2 $ (80.7) ___________________
_______________ $ 200.5
________________ _____________________ ______________ ________________ __________________ ________________ _______________ ________________ _______________ ___________________
assets 21,860.9 12,432.5 6,889.2 10,524.7 51,707.3 10,524.8 11,164.9 73,397.0 – 73,397.0
(1) Includes valuation allowances, goodwill and intangible impairment charges, debt termination charges and severance and real estate exit provisions.
NOTE 27 – SUBSEQUENT EVENTS (including making further tuition payments and accessing pre-
The Company ceased originating private (unguaranteed) stu- vious education records) and satisfy any remaining licensing
dent loans in late 2007 based on an evaluation of the return requirements.
PAGE 118
and risk characteristics of this student lending product, but Management is currently evaluating the collectibility and pro-
has continued to fund pre-existing loan commitments. In jected cash flows related to these loans. Given that the loans
February 2008, a private pilot training school filed bankruptcy. are unsecured and that uncertainties exist regarding collec-
Our student lending business had originated private (unguar- tion, management currently expects that additional reserves
anteed) loans to students of the school, which totaled may be required in 2008 in connection with these loans.
approximately $196 million in total principal and accrued
interest as of December 31, 2007. We ceased originating new On January 23, 2008, CIT Group Inc. entered into a Sales
loans to students of this school in mid-2007. Approximately Agency Agreement with Morgan Stanley & Co. Incorporated
$17 million of the total loans represents loans to students who and Citigroup Global Markets Inc., pursuant to which CIT
have completed their education (loans in “repayment”); the has the option to sell shares of its common stock for an
remainder is to students who have not yet completed their aggregate purchase price of up to $31.5 million. As a result,
training. Loans in repayment to students of this school that the Company sold 1,281,519 shares on January 30, 2008 and
were past due loans 60 days or more were approximately satisfied the conditions necessary to permit the declaration
$2.0 million at December 31, 2007. Collectibility of the out- and payment of preferred stock dividends payable
standing principal and interest balance of loans that have both February 29, 2008.
reached, and have not yet reached repayment status, will On January 17, 2008 the Company announced that it expects
depend on a number of factors, including the student’s cur- to record a pre-tax charge of approximately $50 million in the
rent ability to repay the loan, whether a student has completed first quarter of 2008 for severance and related costs.
the licensing requirements, whether a student can complete
any remaining education requirements at another institution
ITEM 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None
ITEM 9A. Controls and Procedures

CONCLUSION REGARDING THE EFFECTIVENESS OF use, or disposition of the company’s assets that could have a
DISCLOSURE CONTROLS AND PROCEDURES material effect on the financial statements.
Under the supervision and with the participation of our man- Because of its inherent limitations, internal control over finan-
agement, including our principal executive officer and cial reporting may not prevent or detect misstatements. Also,
principal financial officer, we conducted an evaluation of our projections of any evaluation of effectiveness to future periods
disclosure controls and procedures, as such term is defined are subject to the risk that controls may become inadequate
under Rule 13a-15(e) promulgated under the Securities because of changes in conditions, or that the degree of com-
Exchange Act of 1934, as amended (the Exchange Act). Based pliance with the policies or procedures may deteriorate.
on this evaluation, our principal executive officer and our prin-
cipal financial officer concluded that our disclosure controls Management of CIT, including our principal executive officer
PAGE 119
and procedures were effective as of the end of the period cov- and principal financial officer, conducted an evaluation of the
ered by this annual report. effectiveness of the Company’s internal control over financial
reporting as of December 31, 2007 using the criteria set forth
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER by the Committee of Sponsoring Organizations of the
FINANCIAL REPORTING Treadway Commission in Internal Control – Integrated
Framework. We believe that this evaluation provides a reason-
Management of CIT is responsible for establishing and main-
able basis for our opinion.
taining adequate internal control over financial reporting, as
such term is identified in Exchange Act Rules 13a-15(f). Based on the assessment performed, management concluded
Internal control over financial reporting is a process designed that as of December 31, 2007 the Company’s internal control
to provide reasonable assurance regarding the reliability of over financial reporting was effective.
financial reporting and the preparation of financial statements
The effectiveness of the Company’s internal control over
for external purposes in accordance with generally accepted
financial reporting as of December 31, 2007 has been audited
accounting principles. A company’s internal control over
by PricewaterhouseCoopers LLP, an independent registered
financial reporting includes those policies and procedures that
public accounting firm, as stated in their report which appears
(i) pertain to the maintenance of records that, in reasonable
on page 61.
detail, accurately and fairly reflect the transactions and dispo-
sitions of the assets of the company; (ii) provide reasonable
CHANGES IN INTERNAL CONTROL OVER FINANCIAL
assurance that transactions are recorded as necessary to per-
REPORTING
mit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts There have been no changes to the Company’s internal control
and expenditures of the company are being made only in over financial reporting that occurred during the Company’s
accordance with authorizations of management and directors fourth quarter of 2007 that have materially affected, or are
of the company; and (iii) provide reasonable assurance regard- reasonably likely to materially affect, the Company’s internal
ing prevention or timely detection of unauthorized acquisition, control over financial reporting.
ITEM 9B. Other Information

None
PART THREE
ITEM 10. Directors and Executive Officers of the Registrant

The information called for by Item 10 is incorporated by reference from the information under the caption “Election of Directors”
and “Election of Directors – Executive Officers” in our Proxy Statement for our 2008 annual meeting of stockholders.
ITEM 11. Executive Compensation

The information called for by Item 11 is incorporated by reference from the information under the caption “Compensation of
Directors and Executive Officers” in our Proxy Statement for our 2008 annual meeting of stockholders.
ITEM 12. Security Ownership of Certain Beneficial Owners and

Management and Related Stockholder Matters
The information called for by Item 12 is incorporated by reference from the information under the caption “Principal Shareholders”
in our Proxy Statement for our 2008 annual meeting of stockholders.
PAGE 120
ITEM 13. Certain Relationships and Related Transactions

The information called for by Item 13 is incorporated by reference from the information under the caption “Certain Relationships and
Related Transactions” in our Proxy Statement for our 2008 annual meeting of stockholders.
ITEM 14. Principal Accountant Fees and Services

The information called for by Item 14 is incorporated by reference from the information under the caption “Appointment of
Independent Accountants” in our Proxy Statement for our 2008 annual meeting of stockholders.
PART FOUR
ITEM 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed with the Securities and Exchange Commission as part of this report (see Item 8):
1. The following financial statements of CIT and Subsidiaries:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets at December 31, 2006 and December 31, 2005.
Consolidated Statements of Income for the years ended December 31, 2006, 2005 and 2004.
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2006, 2005 and 2004.
Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004.
Notes to Consolidated Financial Statements
2. All schedules are omitted because they are not applicable or because the required information appears in the Consolidated
Financial Statements or the notes thereto.
(b) Exhibits
3.1 Second Restated Certificate of Incorporation of the Company (incorporated by reference to Form 10-Q filed by CIT on
August 12, 2003).
3.2 Amended and Restated By-laws of the Company (incorporated by reference to Form 8-K filed by CIT on January 17, 2008).
3.3 Certificate of Designations relating to the Company’s 6.350% Non-Cumulative Preferred Stock, Series A (incorporated by
reference to Exhibit 3 to Form 8-A filed by CIT on July 29, 2005).
3.4 Certificate of Designations relating to the Company’s Non-Cumulative Preferred Stock, Series B (incorporated by refer-
ence to Exhibit 3 to Form 8-A filed by CIT on July 29, 2005).
4.1 Form of Certificate of Common Stock of CIT (incorporated by reference to Exhibit 4.1 to Amendment No. 3 to the
Registration Statement on Form S-3 filed June 26, 2002).
4.2 Indenture dated as of August 26, 2002 by and among CIT Group Inc., J.P. Morgan Trust Company, National Association (as
PAGE 121
successor to Bank One Trust Company, N.A.), as Trustee and Bank One NA, London Branch, as London Paying Agent and
London Calculation Agent, for the issuance of unsecured and unsubordinated debt securities (Incorporated by reference
to Exhibit 4.18 to Form 10-K filed by CIT on February 26, 2003).
4.3 Form of Indenture dated as of October 29, 2004 between CIT Group Inc. and J.P. Morgan Trust Company, National
Association for the issuance of senior debt securities (Incorporated by reference to Exhibit 4.4 to Form S-3/A filed by CIT
on October 28, 2004).
4.4 Form of Indenture dated as of October 29, 2004 between CIT Group Inc. and J.P. Morgan Trust Company, National
Association for the issuance of subordinated debt securities (Incorporated by reference to Exhibit 4.5 to Form S-3/A filed
by CIT on October 28, 2004).
4.5 Certain instruments defining the rights of holders of CIT’s long-term debt, none of which authorize a total amount of
indebtedness in excess of 10% of the total amounts outstanding of CIT and its subsidiaries on a consolidated basis have
not been filed as exhibits. CIT agrees to furnish a copy of these agreements to the Commission upon request.
4.6 5-Year Credit Agreement, dated as of October 10, 2003 among J.P. Morgan Securities Inc., a joint lead arranger and
bookrunner, Citigroup Global Markets Inc., as joint lead arranger and bookrunner, JP Morgan Chase Bank as administra-
tive agent, Bank of America, N.A. as syndication agent, and Barclays Bank PLC, as documentation agent (Incorporated by
reference to Exhibit 4.2 to Form 10-Q filed by CIT on November 7, 2003).
4.7 5-Year Credit Agreement, dated as of April 14, 2004, among CIT Group Inc., the several banks and financial institutions
named therein, J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., as joint lead arrangers and bookrunners,
JP Morgan Chase Bank, as administrative agent, Bank of America, N.A., as syndication agents and Barclays Bank PLC,
as documentation agent (Incorporated by reference to Exhibit 4.3 to Form 10-Q filed by CIT on May 7, 2004).
4.8 5-Year Credit Agreement, dated as of April 13, 2005, among CIT Group Inc., the several banks and financial institutions
named therein, Citigroup Global Markets Inc. and Banc of America Securities LLC, as joint lead arrangers and bookrun-
ners, Citibank, N.A., as administrative agent, Bank of America, N.A. and JPMorgan Chase Bank, N.A., as syndication
agents, and Barclays Bank PLC, as documentation agent.
4.9 5-Year Credit Agreement, dated as of December 6, 2006, among CIT Group Inc., the several banks and financial institu-
tions named therein, Citigroup Global Markets Inc. and Barclays Capital, as joint lead arrangers and bookrunners,
Citibank, N.A., as administrative agent, Barclays Bank PLC, as syndication agent, and Bank of America, N.A. and
JPMorgan Chase Bank, N.A., as co-documentation agents.
4.10 Indenture dated as of January 20, 2006 between CIT Group Inc. and JPMorgan Chase Bank, N.A. for the issuance of sen-
ior debt securities (incorporated by reference to Exhibit 4.3 to Form 10-Q filed by CIT on August 7, 2006).
Item 15: Exhibits and Financial Statement Schedules

4.11 Indenture dated as of January 20, 2006 between CIT Group Inc. and JPMorgan Chase Bank, N.A. for the issuance of sub-
ordinated debt securities (incorporated by reference to Exhibit 4.4 to Form 10-Q filed by CIT on August 7, 2006).
4.12 Indenture dated as of June 2, 2006 between CIT Group Inc., JPMorgan Chase Bank, N.A. and JPMorgan Chase Bank,
N.A., London branch for the issuance of senior notes (incorporated by reference to Exhibit 4.5 to Form 10-Q filed by CIT
on August 7, 2006).
4.13 Indenture dated as of June 2, 2006 between CIT Group Inc., JPMorgan Chase Bank, N.A. and JPMorgan Chase Bank,
N.A., London branch for the issuance of subordinated notes (incorporated by reference to Exhibit 4.6 to Form 10-Q filed
by CIT on August 7, 2006).
4.14 Indenture dated as of November 1, 2006, among CIT Group Funding Company of Canada, CIT Group Inc., and The Bank of
New York, for the issuance of senior debt securities of CIT Group Funding Company of Canada and the related guaran-
tees of CIT (incorporated by reference to Exhibit 4.8 to Form 10-Q filed by CIT on November 6, 2006).
10.1 Agreement dated as of June 1, 2001 between CIT Holdings (NV) Inc., a wholly-owned subsidiary of Tyco International Ltd.,
and CIT (formerly known as Tyco Capital Corporation and Tyco Acquisition Corp. XX (NV) and successor to The CIT Group,
Inc.), a Nevada corporation, regarding transactions between CIT Holdings and CIT (incorporated by reference to Exhibit
10.1 to Amendment No. 3 to the Registration Statement on Form S-3 filed June 7, 2002).
10.2 Form of Separation Agreement by and between Tyco International Ltd. and CIT (incorporated by reference to Exhibit 10.2
to Amendment No. 3 to the Registration Statement on Form S-3 filed June 26, 2002).
10.3 Form of Financial Services Cooperation Agreement by and between Tyco International Ltd. and CIT (incorporated by ref-
erence to Exhibit [10.3] to Amendment No. 3 to the Registration Statement on Form S-3 filed June 12, 2002).
10.4* Employment Agreement for Joseph M. Leone dated as of August 1, 2004 (incorporated by reference to Exhibit 10.3 to
Form 10-Q filed by CIT on November 9, 2004).
10.5* Amendment to Employment Agreement for Joseph M. Leone dated November 12, 2007.
PAGE 122
10.6* Employment Agreement for Thomas B. Hallman dated as of August 1, 2004 (incorporated by reference to Exhibit 10.2 to
Form 10-Q filed by CIT on November 9, 2004).
10.7* Employment Agreement for Lawrence A. Marsiello dated as of August 1, 2004 (incorporated by reference to Exhibit 10.4
to Form 10-Q filed by CIT on November 9, 2004).
10.8* Revised Amendment to Employment Agreement for Lawrence A. Marsiello dated as of December 6, 2007.
10.9 2004 Extension and Funding Agreement dated September 8, 2004, by and among Dell Financial Services L.P., Dell Credit
Company L.L.C., DFS-SPV L.P., DFS-GP, Inc., Dell Inc., Dell Gen. P. Corp., Dell DFS Corporation, CIT Group Inc., CIT
Financial USA, Inc., CIT DCC Inc., CIT DFS Inc., CIT Communications Finance Corporation, and CIT Credit Group USA Inc.
(Incorporated by reference to Form 8-K filed by CIT on September 9, 2004).
10.10 Letter Agreement dated December 19, 2008 by and among Dell Inc., CIT Group Inc., Dell Credit Company LLC, Dell DFS
Corporation, and CIT DFS, Inc. amending the Amended and Restated Agreement of Limited Partnership of Dell Financial
Services L.P. dated September 8, 2004.
10.11 Letter Agreement dated December 19, 2008 by and among Dell Inc., Dell Financial Services L.P., Dell Credit Company
LLC, DFS-SPV L.P., DFS-GP, Inc., Dell Gen. P. Corp., Dell DFS Corporation, CIT Group lnc., CIT Financial USA, Inc., CIT
DCC Inc., CIT DFS, Inc., CIT Communications Finance Corporation, and CIT Credit Group USA, Inc. amending the 2004
Extension and Funding Agreement dated September 8, 2004.
10.12 Purchase and Sale Agreement dated as of December 19,2007 by and among Dell Inc., Dell International Incorporated,
CIT Group Inc., Dell Credit Company LLC, Dell DFS Corporation, CIT DFS, Inc., CIT Financial USA, Inc., Dell Financial
Services L.P., DFS-SPV L.P., DFS-GP, Inc., Dell Gen. P. Corp., CIT DCC Inc., CIT Communications Finance Corporation,
and CIT Credit Group USA, Inc.
10.13* Executive Severance Plan (incorporated by reference to Exhibit 10.24 to Amendment No. 3 to the Registration Statement
on Form S-3 filed June 26, 2002).
10.14* Long-Term Equity Compensation Plan (incorporated by reference to Form DEF-14A filed April 23, 2003).
10.15 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.26 to Amendment No. 3 to the Registration
Statement on Form S-3 filed June 26, 2002).
10.16 Form of Tax Agreement by and between Tyco International Ltd. and CIT (incorporated by reference to Exhibit 10.27 to
Amendment No. 3 to the Registration Statement on Form S-3 filed June 26, 2002).
10.17 Master Confirmation Agreement and the related Supplemental Confirmation dated as of July 19, 2005 between Goldman,
Sachs and Co. and CIT Group Inc. relating to CIT’s accelerated stock repurchase program (incorporated by reference to
Exhibit 10.1 to Form 10-Q filed by CIT on August 5, 2005).
10.18 Agreement and Plan of Merger, dated as of January 4, 2005, among Education Lending Group, Inc. CIT Group Inc. and CIT
ELG Corporation (incorporated by reference to Exhibit 99.2 to the Form 8-K filed by CIT on January 6, 2005).
10.19**Master Confirmation and the related Supplemental Confirmation, each dated as of January 24, 2007, between CIT Group
Inc. and BNP Paribas relating to CIT’s accelerated stock repurchase program.
10.20* CIT Group Inc. Long -Term Incentive Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed by CIT on May 15,
2006).
10.21* CIT Group Inc. Executive Incentive Plan (incorporated by reference to Exhibit 10.2 to Form 8-K filed by CIT on May 15,
2006).
10.22* Employment Agreement, dated August 29, 2006, between CIT Group Inc. and Jeffrey M. Peek (incorporated by reference
to Exhibit 99.1 to Form 8-K filed by CIT on September 5, 2006).
10.23* Amendment to Employment Agreement for Jeffrey M. Peek dated December 10, 2007.
10.24* Forms of CIT Group Inc. Long-Term Incentive Plan Stock Option Award Agreements.
10.25* Forms of CIT Group Inc. Long-Term Incentive Plan Performance Share Award Agreements.
10.26* Forms of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Award Agreements.
10.27* Forms of CIT Group Inc. Long-Term Incentive Plan Restricted Cash Unit Award Agreements.
10.28* Form of CIT Group Inc. Long-Term Incentive Plan Restricted Stock Unit Award Agreement.
10.29 Forward Equity Commitment dated October 16, 2007 from Morgan Stanley & Co. Incorporated and Citigroup Global
PAGE 123
Markets Inc. to CIT Group Inc. relating to the issuance of common stock in connection with the payment of dividends on
certain preferred stock and interest on certain junior subordinated notes.
12.1 CIT Group Inc. and Subsidiaries Computation of Earnings to Fixed Charges.
21.1 Subsidiaries of CIT.
23.1 Consent of PricewaterhouseCoopers LLP.
24.1 Powers of Attorney.
31.1 Certification of Jeffrey M. Peek pursuant to Rules 13a-15(e) and 15d-15(f) of the Securities Exchange Commission, as
promulgated pursuant to Section 13(a) of the Securities Exchange Act and Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Joseph M. Leone pursuant to Rules 13a-15(e) and 15d-15(f) of the Securities Exchange Commission, as
promulgated pursuant to Section 13(a) of the Securities Exchange Act and Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Jeffrey M. Peek pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
32.2 Certification of Joseph M. Leone pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
* Indicates a management contract or compensatory plan or arrangement.
** Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission as part of an application for con-
fidential treatment pursuant to the Securities Exchange Act of 1934, as amended.
Item 15: Exhibits and Financial Statement Schedules

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
CIT GROUP INC.

By: /s/ Robert J. Ingato
February 29, 2008 Robert J. Ingato
Executive Vice President, General Counsel and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
February 29, 2008 in the capacities indicated below.
NAME NAME
/s/ Jeffrey M. Peek John R. Ryan*

Jeffrey M. Peek John R. Ryan
Chairman and Chief Executive Officer and Director Director
Seymour Sternberg*
Gary C. Butler Seymour Sternberg
PAGE 124
Director Director
William Freeman* Peter J. Tobin*
William Freeman Peter J. Tobin
Director Director
Susan Lyne*
Susan Lyne Lois M. Van Deusen

Director Director
James S. McDonald* /s/ Joseph M. Leone
James S. McDonald Joseph M. Leone Vice Chairman and Chief Financial Officer
Director
/s/ William J. Taylor
William J. Taylor
Marianne Miller Parrs Executive Vice President, Controller and
Director Principal Accounting Officer
Timothy M. Ring *By: /s/ Robert J. Ingato
Timothy M. Ring* Robert J. Ingato
Director Executive Vice President, General Counsel
and Secretary
* Original powers of attorney authorizing Jeffrey M. Peek, Robert J. Ingato, and James P. Shanahan and each of them to sign on behalf of the
above-mentioned directors are held by the Corporation and available for examination by the Securities and Exchange Commission pursuant to
Item 302(b) of Regulation S-T.
Where You Can Find More Information The Annual Report on Form 10-K, including the exhibits and
A copy of the Annual Report on Form 10-K, including the schedules thereto, and other SEC filings, are available free of
exhibits and schedules thereto, may be read and copied at the charge on the Company’s Internet site at http://www.cit.com
SEC’s Public Reference Room at 450 Fifth Street, N.W., as soon as reasonably practicable after such material is elec-
Washington D.C. 20549. Information on the Public Reference tronically filed with the SEC. Copies of our Corporate
Room may be obtained by calling the SEC at 1-800-SEC-0330. Governance Guidelines, the Charters of the Audit Committee,
In addition, the SEC maintains an Internet site at the Compensation Committee, and the Nominating and
http://www.sec.gov, from which interested parties can elec- Governance Committee, and our Code of Business Conduct
tronically access the Annual Report on Form 10-K, including are available, free of charge, on our internet site at
the exhibits and schedules thereto. http://www.cit.com, and printed copies are available by con-
tacting Investor Relations, 1 CIT Drive, Livingston, NJ 07039 or
by telephone at (973) 740-5000.
PAGE 125
EXHIBIT 12.1
CIT Group Inc. and Subsidiaries Computation of Ratio of Earnings to Fixed Charges (dollars in millions)
Years Ended December 31,
______________________________________________________________________________________________________
2007
______________ 2006
_______________ 2005
_______________ 2004
_______________ 2003
_______________
Net income available to common shareholders(1) $ (111.0) $1,015.8 $ 936.4 $ 753.6 $ 566.9
Provision for income taxes (194.4)
______________ 364.4
_______________ 464.2
_______________ 483.3
_______________ 361.6
_______________
Earnings before provision for income taxes (305.4)
______________ 1,380.2
_______________ 1,400.6
_______________ 1,236.9
_______________ 928.5
_______________
Fixed charges:
Interest and debt expenses on indebtedness 3,827.2 2,850.4 1,894.3 1,242.6 1,348.7
Minority interest in subsidiary trust holding solely
debentures of the company, before tax(2) 5.1 17.4 17.7 17.5 8.8
Interest factor: one-third of rentals on real and
personal properties 22.1
______________ 18.5
_______________ 14.3
_______________ 13.4
_______________ 14.4
_______________
Total fixed charges 3,854.4
______________ 2,886.3
_______________ 1,926.3
_______________ 1,273.5
_______________ 1,371.9
_______________
Total earnings before provision for income taxes
and fixed charges $3,549.0
______________ $4,266.5
_______________ $3,326.9
_______________ $2,510.4
_______________ $2,300.4
_______________
______________ _______________ _______________ _______________ _______________
Ratios of earnings to fixed charges (3) 1.48x 1.73x 1.97x 1.68x
(1) The 2007 net income includes an after-tax valuation allowance of $785.9 million for home lending receivables held for sale.
(2) The related debt was extinguished during second quarter 2007.
(3) Earnings were insufficient to cover fixed charges by $305.4 million in the year ended December 31, 2007. Earnings for this year included valua-
tion allowances for receivables held for sale of $1,271.4 million.
PAGE 126
EXHIBIT 31.1
CERTIFICATIONS
I, Jeffrey M. Peek, certify that:
1. I have reviewed this annual report on Form 10-K of CIT Group Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and proce-
dures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principals;
(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
PAGE 127
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the regis-
trant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant’s internal control over financial reporting.
Date: February 29, 2008
/s/ Jeffrey M. Peek
Jeffrey M. Peek
Chairman and Chief Executive Officer
EXHIBIT 31.2
CERTIFICATIONS
I, Joseph M. Leone, certify that:
1. I have reviewed this annual report on Form 10-K of CIT Group Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and proce-
dures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principals;
(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
PAGE 128
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the regis-
trant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant’s internal control over financial reporting.
Date: February 29, 2008
/s/ Joseph M. Leone
Joseph M. Leone
Vice Chairman and Chief Financial Officer
EXHIBIT 32.1
Certification Pursuant to Section 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of CIT Group Inc. (“CIT”) on Form 10-K for the year ended December 31, 2007, as filed
with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey M. Peek, the Chief Executive Officer of
CIT, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;
(i) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
Act of 1934; and
(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of CIT.
/s/ Jeffrey M. Peek
Dated: February 29, 2008 Jeffrey M. Peek
Chairman and
Chief Executive Officer
CIT Group Inc.
PAGE 129
EXHIBIT 32.2
Certification Pursuant to Section 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of CIT Group Inc. (“CIT”) on Form 10-K for the year ended December 31, 2007, as filed
with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph M. Leone, the Chief Financial Officer of
CIT, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;
(i) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
Act of 1934; and
(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of CIT.
/s/ Joseph M. Leone
Dated: February 29, 2008 Joseph M. Leone
CIT Group Inc.
PAGE 130
22112D_CVR singles 3/18/08 4:51 PM Page 3
GLOBAL HEADQUARTERS BOARD OF DIRECTORS INVESTOR INFORMATION

CIT Group Inc. Jeffrey M. Peek Stock Exchange Information
505 Fifth Avenue Chairman and Chief Executive Officer In the United States, CIT common stock
New York, NY 10017 CIT Group Inc. is listed on the New York Stock Exchange
Telephone: (212) 771-0505 under the ticker symbol “CIT.”
Gary C. Butler 3
Number of employees: President and Chief Executive Officer Shareowner Services
Approximately 6,700 at 12/31/2007 Automatic Data Processing, Inc. For shareowner services, including
address changes, security transfers and
Number of beneficial shareholders: William M. Freeman 2
general shareowner inquiries, please
77,727 as of 2/15/2008 President and Chief Executive Officer
contact BNY Mellon Shareowner Services.
Arbinet-thexchange, Inc.
By writing:
EXECUTIVE OFFICERS Susan M. Lyne 2
BNY Mellon Shareowner Services
Jeffrey M. Peek President and Chief Executive Officer
P.O. Box 358015
Chairman and Chief Executive Officer Martha Stewart Living Omnimedia, Inc.
Pittsburgh, PA 15252-8015
John F. Daly James S. McDonald 1*
By calling:
President, Trade Finance President and Chief Executive Officer
866-214-7004 U.S. & Canada
Rockefeller & Co.
Robert J. Ingato 201-680-6685 Other countries
Executive Vice President, Marianne Miller Parrs 1 800-231-5469 Telecommunication device
General Counsel and Secretary Retired Executive Vice President for the hearing impaired.
and Chief Financial Officer,
Terry Kelleher For general shareowner information
International Paper Company
Co-President, Vendor Finance and internet access to your shareowner
Timothy M. Ring 2 account, visit BNY Mellon’s Web site:
C. Jeffrey Knittel
Chairman and Chief Executive Officer www.bnymellon.com/shareowner/isd.
President, Transportation Finance
C.R. Bard, Inc.
Form 10-K and other reports
Joseph M. Leone
Vice Admiral John R. Ryan, USN 3 A copy of Form 10-K and all quarterly filings
President and Chief Executive Officer on Form 10-Q, Board Committee Charters,
Walter J. Owens Center for Creative Leadership Corporate Governance Guidelines and the
President, Corporate Finance Code of Business Conduct are available
Seymour Sternberg 1
without charge on our Web site, www.cit.com
Kristine Snow Chairman of the Board and
or upon written request to:
Co-President, Vendor Finance Chief Executive Officer
Investor Relations Department
New York Life Insurance Company
William J. Taylor CIT Group Inc.
Executive Vice President, Controller and Peter J. Tobin 1 505 Fifth Avenue
Principal Accounting Officer Retired Special Assistant to the President of New York, NY 10017
St. John’s University
For additional information, please call
The NYSE requires that the Chief Executive Lois M. Van Deusen 3 (866) 54CITIR [(866) 542-4847] or send an
Officer of a listed company certify annually Managing Member of LVD Consulting, LLC e-mail to [email protected].
that he or she was not aware of any and Of Counsel to McCarter & English, LLP
violation by the company of the NYSE’s 1
Audit Committee
corporate governance listing standards. 2
Compensation Committee
Such certification was made by Mr. Peek 3
Nominating and Governance Committee
on May 21, 2007. *
Elected to the Board in October 2007
Certifications by the Chief Executive Officer
and the Chief Financial Officer of CIT
pursuant to section 302 of the Sarbanes- MEDIA INQUIRIES INVESTOR INQUIRIES
Oxley Act of 2002 have been filed as exhibits Kelley J. Gipson Kenneth A. Brause
Design by Addison www.addison.com
to CIT’s Annual Report on Form 10-K. Executive Vice President, Brand Executive Vice President, Investor Relations
Marketing and Communications CIT Group Inc.
CIT Group Inc. 505 Fifth Avenue, New York, NY 10017
505 Fifth Avenue, New York, NY 10017 Telephone: (212) 771-9650
Telephone: (212) 771-9401 E-mail address: [email protected]
E-mail address: [email protected]
For more information about CIT,
visit our Web site at www.cit.com.
22112D_CVR singles 3/18/08 4:51 PM Page 4
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C IT – annual report 2007

THE GENERATIONS TLC VISION

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Even in our longest-standing businesses, CIT continues to develop new

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Supporting our communities is important to everyone at CIT. Globally, we

To commemorate our Centennial, CIT has empowered employees worldwide

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Spotting a company’s unique potential leads to relationships that grow and

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1908–1924 1925–1945 1946–1965 1966–1985 1986–2008

CIT 100 years

Sta nding Fir m 1925–1945

Pos tWa r Pr os per it y 1946–1965

Ad a pting to Cha ng e 1966–1985

1908–1924 1925–1945 1946–1965 1966–1985 1986–2008

CIT 100 years

Sta nding Fir m 1925–1945

Pos tWa r Pr os per it y 1946–1965

Ad a pting to Cha ng e 1966–1985

1908–1924 1925–1945 1946–1965 1966–1985 1986–2008

CIT 100 years

Sta nding Fir m 1925–1945

Pos tWa r Pr os per it y 1946–1965

Ad a pting to Cha ng e 1966–1985

1908–1924 1925–1945 1946–1965 1966–1985 1986–2008

CIT 100 years

Sta nding Fir m 1925–1945

Pos tWa r Pr os per it y 1946–1965

Ad a pting to Cha ng e 1966–1985

1908–1924 1925–1945 1946–1965 1966–1985 1986–2008

CIT 100 years

Sta nding Fir m 1925–1945

Pos tWa r Pr os per it y 1946–1965

Ad a pting to Cha ng e 1966–1985

1908–1924 1925–1945 1946–1965 1966–1985 1986–2008

CIT 100 years

Sta nding Fir m 1925–1945

Pos tWa r Pr os per it y 1946–1965

Ad a pting to Cha ng e 1966–1985

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Commission File Number: 001-31369

CIT GROUP INC.

505 Fifth Avenue, New York, New York 10017

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Item 7A. Quantitative and Qualitative Disclosure about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119