================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

            (Mark One)
              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended JUNE 30, 2000
                                                 -------------
                                       OR
              ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                     For the transition period from       to
                                                   ------   -------

                             Commission File Number
                                     1-1861
                             ----------------------

                               THE CIT GROUP, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           DELAWARE                                    13-2994534
--------------------------------------------------------------------------------
(State or other jurisdiction of                      (IRS Employer
incorporation or organization)                     Identification No.)

1211 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK                    10036
--------------------------------------------------------------------------------
(Address of principal executive offices)                         (Zip Code)

                                 (212) 536-1390
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

--------------------------------------------------------------------------------
(Former  name,  former  address and former  fiscal year,  if changed  since last
report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                            Yes     X       No
                               ----------     ----------

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of July 31, 2000: Common Stock including  Exchangeable Shares -
262,430,738.
================================================================================
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
                                   (UNAUDITED)

        TABLE OF CONTENTS                                                   PAGE
                                                                            ----

PART I.   FINANCIAL INFORMATION                                                1

Item 1.    Condensed Financial Statements
           Consolidated Balance Sheets - June 30, 2000 and
             December 31, 1999.                                                2
           Consolidated Income Statements for the three and six months
             ended June 30, 2000 and 1999.                                     3
           Consolidated Statements of Changes in Stockholders' Equity for
             the six months ended June 30, 2000 and 1999.                      4
           Consolidated Statements of Cash Flows for the six months
             ended June 30, 2000 and 1999.                                     5
           Notes to Condensed Consolidated Financial Statements.            6-12

 Item 2.   Management's Discussion and Analysis of Financial
  and        Condition and Results of Operations                           13-30
 Item 3.   Quantitative and Qualitative Disclosures About Market Risk

PART II.  OTHER INFORMATION

 Item 4.   Submission of Matters to a Vote of Security Holders                31
 Item 6.   Exhibits and Reports on Form 8-K                                   31

================================================================================
Statements  contained  in this  Form  10-Q  that are not  historical  facts  are
forward-looking  statements,  as that term is defined in the Private  Securities
Litigation  Reform  Act of 1995.  Because  such  statements  involve  risks  and
uncertainties,  actual  results may differ  materially  from those  expressed or
implied  by  such  forward-looking  statements.  Such  risks  and  uncertainties
include,   but  are  not  limited  to,  potential  changes  in  interest  rates,
competitive  factors,  and  general  economic  conditions  and  the  ability  to
integrate recent acquisitions.
================================================================================

                          PART I. FINANCIAL INFORMATION

     Certain  information  and  footnote  disclosures  normally  included in the
consolidated financial statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted  pursuant to the rules and
regulations  of the Securities and Exchange  Commission.  It is suggested  these
condensed  consolidated  financial  statements be read in  conjunction  with the
consolidated financial statements and notes thereto included in the December 31,
1999 Annual Report on Form 10-K and the March 31, 2000 Quarterly  Report on Form
10-Q for The CIT Group, Inc. ("we", "our", "us", "CIT", or the "Company").


                                       1
<PAGE>



                      THE CIT GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                              (Dollars in Millions)

<TABLE>
<CAPTION>

                                                        June 30,    December 31,
                                                          2000          1999
                                                        --------    ------------
                                                      (unaudited)
<S>                                                     <C>          <C>
Assets
------
Financing and leasing assets
Loans and leases
  Commercial                                            $29,098.2    $27,119.2
  Consumer                                                4,023.4      3,887.9
                                                        ---------    ---------
    Finance receivables                                  33,121.6     31,007.1
Reserve for credit losses                                  (460.3)      (446.9)
                                                        ---------    ---------
    Net finance receivables                              32,661.3     30,560.2
Operating lease equipment, net                            6,427.6      6,125.9
Finance receivables held for sale                         2,874.9      3,123.7
Cash and cash equivalents                                   845.6      1,073.4
Goodwill                                                  2,009.8      1,850.5
Other assets                                              2,270.2      2,347.4
                                                        ---------    ---------
  Total assets                                          $47,089.4    $45,081.1
                                                        =========    =========

Liabilities and Stockholders' Equity
------------------------------------
Debt
Commercial paper                                        $ 9,356.2    $ 8,974.0
Variable rate senior notes                               10,161.7      7,147.2
Fixed rate senior notes                                  17,626.7     19,052.3
Subordinated fixed rate notes                               200.0        200.0
                                                        ---------    ---------
  Total debt                                             37,344.6     35,373.5
Credit balances of factoring clients                      2,129.5      2,200.6
Accrued liabilities and payables                          1,102.8      1,191.8
Deferred federal income taxes                               513.7        510.8
                                                        ---------    ---------
  Total liabilities                                      41,090.6     39,276.7
Company-obligated mandatorily redeemable
  preferred securities of subsidiary trust holding
  solely debentures of the Company                          250.0        250.0
Stockholders' equity
Common stock                                                  2.7          2.7
Paid-in capital                                           3,525.7      3,521.8
Retained earnings                                         2,339.6      2,097.6
Accumulated other comprehensive income                       (0.7)         2.8
Treasury stock at cost                                     (118.5)       (70.5)
                                                        ---------    ---------
  Total stockholders' equity                              5,748.8      5,554.4
                                                        ---------    ---------
  Total liabilities and stockholders' equity            $47,089.4    $45,081.1
                                                        =========    =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       2
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
                         CONSOLIDATED INCOME STATEMENTS
                 (Dollars in Millions, except per share amounts)
<TABLE>
<CAPTION>
                                                            For the Three Months            For the Six Months
                                                               Ended June 30,                 Ended June 30,
                                                           ---------------------          ----------------------
                                                             2000          1999             2000          1999
                                                           --------       ------          --------      --------
                                                                                (unaudited)
<S>                                                        <C>            <C>             <C>           <C>
Finance income                                             $1,301.8       $554.4          $2,530.6      $1,095.9
Interest expense                                              630.9        280.8           1,202.8         554.1
                                                           --------       ------          --------      --------
  Net finance income                                          670.9        273.6           1,327.8         541.8
Depreciation on operating lease equipment                     311.7         59.2             619.5         115.3
                                                           --------       ------          --------      --------
  Net finance margin                                          359.2        214.4             708.3         426.5
Fees and other income                                         232.3         74.8             470.5         139.5
                                                           --------       ------          --------      --------

  Operating revenue                                           591.5        289.2           1,178.8         566.0
                                                           --------       ------          --------      --------

Salaries and general operating expenses                       257.5        108.0             525.7         213.8
Provision for credit losses                                    64.0         23.8             125.6          45.7
Goodwill amortization                                          20.6          5.0              41.1           8.2
Minority interest in subsidiary trust holding
  solely debentures of the Company                              4.8          4.8               9.6           9.6
                                                           --------       ------          --------      --------
  Operating expenses                                          346.9        141.6             702.0         277.3
                                                           --------       ------          --------      --------

  Income before provision for income taxes                    244.6        147.6             476.8         288.7
Provision for income taxes                                     93.2         51.3             181.5         100.5
                                                           --------       ------          --------      --------
  Net income                                               $  151.4       $ 96.3          $  295.3      $  188.2
                                                           ========       ======          ========      ========

Basic net income per share                                 $   0.58       $ 0.60          $   1.13      $   1.17
Diluted net income per share                               $   0.58       $ 0.59          $   1.12      $   1.16
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                              (Dollars in Millions)
<TABLE>
<CAPTION>
                                                                            Six Months Ended June 30,
                                                                          ----------------------------
                                                                            2000                1999
                                                                          --------            --------
                                                                                  (unaudited)
<S>                                                                       <C>                 <C>
Balance, January 1                                                        $5,554.4            $2,701.6
                                                                          --------            --------
  Net income                                                                 295.3               188.2
  Foreign currency translation adjustments                                    (4.0)                 --
  Unrealized gain on equity and securitization investments, net                0.5                  --
                                                                          --------            --------
Total comprehensive income                                                   291.8               188.2
Dividends declared                                                           (53.3)              (32.4)
Treasury stock purchased                                                     (48.0)              (15.6)
Other                                                                          3.9                 4.6
                                                                          --------            --------
Balance, June 30                                                          $5,748.8            $2,846.4
                                                                          ========            ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Dollars in Millions)
<TABLE>
<CAPTION>
                                                                              Six Months Ended June 30,
                                                                         ----------------------------------
                                                                            2000                    1999
                                                                         ----------              ----------
                                                                                     (unaudited)
<S>                                                                      <C>                     <C>
CASH FLOWS FROM OPERATIONS
Net income                                                               $    295.3              $    188.2
Adjustments to reconcile net income to net cash flows
   from operations:
Provision for credit losses                                                   125.6                    45.7
Depreciation and amortization                                                 686.2                   131.6
Provision for deferred federal income taxes                                    69.8                    71.4
Gains on equipment, receivable and investment sales                          (192.8)                  (41.2)
Decrease in accrued liabilities and payables                                  (89.0)                  (27.0)
Increase in other assets                                                      (64.5)                 (131.3)
Other                                                                          14.9                    29.3
                                                                         ----------              ----------
 Net cash flows provided by operations                                        845.5                   266.7
                                                                         ----------              ----------

CASH FLOWS FROM INVESTING ACTIVITIES
Loans extended                                                            (24,203.2)              (16,879.7)
Collections on loans                                                       20,395.9                15,535.0
Proceeds from asset and receivable sales                                    3,004.5                 1,663.0
Purchases of assets to be leased                                             (946.3)                 (879.2)
Purchases of finance receivable portfolios                                   (870.7)                 (452.7)
Net increase in short-term factoring receivables                             (217.0)                 (269.1)
Other                                                                         (12.6)                   (0.9)
                                                                         ----------              ----------
 Net cash flows used for investing activities                              (2,849.4)               (1,283.6)
                                                                         ----------              ----------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of variable and fixed rate notes                 6,883.7                 4,348.9
Repayments of variable and fixed rate notes                                (5,294.8)               (2,695.3)
Net increase (decrease) in commercial paper                                   382.2                  (469.8)
Net repayments of non-recourse leveraged lease debt                           (90.5)                  (99.6)
Cash dividends paid                                                           (53.3)                  (32.4)
Purchase of treasury stock                                                    (48.0)                  (15.6)
                                                                         ----------              ----------
 Net cash flows provided by financing activities                            1,779.3                 1,036.2
                                                                         ----------              ----------
Effect of exchange rate on cash                                                (3.2)                     --
                                                                         ----------              ----------
Net (decrease) increase in cash and cash equivalents                         (227.8)                   19.3
Cash and cash equivalents, beginning of period                              1,073.4                    73.6
                                                                         ----------              ----------
Cash and cash equivalents, end of period                                 $    845.6              $     92.9
                                                                         ==========              ==========
Supplemental disclosures
Interest paid                                                            $  1,163.2              $    552.5
Federal, state and local and foreign income taxes paid                   $     27.6              $     45.2
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Basis of Presentation

We  believe  all  adjustments  (all of  which  are  normal  recurring  accruals)
necessary for a fair  statement of financial  position and results of operations
for  these  periods  have  been  made.  Results  for  interim  periods  are  not
necessarily  indicative  of results  for a full year and are subject to year-end
audit adjustments.

Note 2 - Earnings Per Share

The  reconciliation of the numerator and denominator of basic earnings per share
("EPS") and diluted EPS is presented below.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------

                                                      For the Three Months Ended June 30,
                           ---------------------------------------------------------------------------------------
                                                2000                                          1999
                           --------------------------------------------     --------------------------------------
                             Income             Shares        Per Share       Income          Shares     Per Share
                           (Numerator)      (Denominator)      Amount       (Numerator)   (Denominator)   Amount
                           -----------      -------------      ------       -----------   -------------   ------
                                                 (In Millions, except per share amounts)
<S>                          <C>                <C>            <C>            <C>              <C>        <C>
Basic EPS:
Income available to
  common shareholders        $ 151.4            261.6          $ 0.58         $ 96.3           160.9      $ 0.60
                                                               ======                                     ======
Effect of Dilutive
  Securities:
Restricted shares                 --              1.0                             --             1.0
Stock options                     --               --                             --             0.2
                             -------            -----                         ------           -----
Diluted EPS                  $ 151.4            262.6          $ 0.58         $ 96.3           162.1      $ 0.59
                             =======            =====          ======         ======           =====      ======

------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------

                                                       For the Six Months Ended June 30,
                           ---------------------------------------------------------------------------------------
                                              2000                                            1999
                           ------------------------------------------      --------------------------------------
                             Income            Shares         Per Share      Income          Shares     Per Share
                           (Numerator)      (Denominator)      Amount      (Numerator)    (Denominator)   Amount
                           -----------      -------------      ------      -----------    -------------   ------
                                                  (In Millions, except per share amounts)
<S>                          <C>                <C>            <C>           <C>              <C>         <C>
Basic EPS:
Income available to
  common shareholders        $ 295.3            262.3          $ 1.13        $ 188.2          161.0       $ 1.17
                                                               ======                                     ======
Effect of Dilutive
  Securities:
Restricted shares                 --              0.8                             --            1.0
Stock options                     --               --                             --            0.3
                             -------            -----                        -------          -----
Diluted EPS                  $ 295.3            263.1          $ 1.12        $ 188.2          162.3       $ 1.16
                             =======            =====          ======        =======          =====       ======
------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       6
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3 - Stockholders' Equity

The following table summarizes the outstanding  common stock, par value $.01 per
share with 1,210,000,000 shares authorized,  and exchangeable shares at June 30,
2000, and December 31, 1999.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------

                                                 Common Stock
                                     -------------------------------------
                                                     Less                   Exchangeable
                                        Issued     Treasury    Outstanding     Shares
                                     -----------  -----------  -----------  ------------
<S>                                  <C>          <C>          <C>           <C>
Balance at June 30, 2000             255,372,317  (5,554,836)  249,817,481   12,350,677
                                     ===========  ===========  ===========  ===========

Balance at December 31, 1999         242,285,952  (2,745,685)  239,540,267   24,892,310
                                     ===========  ===========  ===========  ===========

----------------------------------------------------------------------------------------
</TABLE>

Exchangeable  shares of CIT Exchangeco  Inc., par value of $.01 per share,  were
issued in connection with the acquisition of Newcourt. The holders of Exchangeco
shares have dividend,  voting and other rights equivalent to those of CIT common
stockholders.  These  shares may be  exchanged  at any time at the option of the
holder on a  one-for-one  basis for CIT common  stock,  and in any event will be
exchanged no later than November 2004.


                                       7
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 4 - Business Segment Information

The  following   table  presents   reportable   segment   information   and  the
reconciliation  to the  consolidated  totals as of and for the six months  ended
June 30, 2000, and 1999.  Prior year balances have been  reclassified to conform
with the  current  year  presentation.  The 2000  balances  reflect  integration
related  portfolio   transfers   effective  December  31,  1999  between  Vendor
Technology Finance, Structured Finance and Equipment Financing and Leasing.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------

                           Equipment    Vendor
                           Financing  Technology   Commercial   Structured                 Total     Corporate   Consolidated
                          and Leasing  Finance       Finance     Finance     Consumer     Segments   and Other      Total
                          -----------  -------       -------     -------     --------     --------   ---------      -----
                                                                (Dollars in Millions)
<S>                            <C>     <C>          <C>          <C>         <C>         <C>           <C>        <C>
June 30, 2000
Operating revenue          $   338.4   $   395.6    $  241.8     $   64.3    $  120.5    $ 1,160.6     $ 18.2     $ 1,178.8
Net income                     133.1        69.2        74.3         31.5        30.8        338.9      (43.6)        295.3
Total managed assets        19,835.9    16,484.4     7,581.8      2,019.4     7,246.0     53,167.5      203.4      53,370.9

June 30, 1999
Operating revenue          $   250.8   $      --    $  191.1     $     --    $  120.3    $   562.2     $  3.8     $   566.0
Net income                     119.0          --        66.0           --        27.8        212.8      (24.6)        188.2
Total managed assets        14,170.4          --     5,984.0           --     8,149.4     28,303.8       91.7      28,395.5

-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

In the  third  quarter  of  2000,  we are  implementing  certain  organizational
refinements,  which are not  reflected  in the  table  above,  to  better  align
marketing  and  risk  management   efforts  and  to  further  improve  operating
efficiencies. Certain North American business lines of Vendor Technology Finance
were transferred to the Equipment  Financing  business unit.  Vendor  Technology
Finance will continue to emphasize growing its key vendor finance  relationships
and to conduct  international  operations.  The communications and media product
lines previously with Equipment  Financing,  have been transferred to Structured
Finance.  In addition,  Equity  Investments  will operate as part of  Structured
Finance.

Note 5 - Newcourt Acquisition

On  November  15,  1999,  CIT  acquired  Newcourt,  a publicly  traded  non-bank
financial services  enterprise,  which originated,  invested in and securitized,
syndicated  and  sold  asset-based  loans  and  leases.


                                       8
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The  acquisition of Newcourt has been  accounted for using the purchase  method.
The  difference  between  the  purchase  price and the fair  value of net assets
acquired was allocated to goodwill in the Consolidated Balance Sheets.

The original  purchase price  allocations were refined during the second quarter
2000, increasing goodwill by $200.1 million, and are summarized, on an after tax
basis, in the table that follows.  Goodwill related to the Newcourt acquisition,
which  was  $1,548.6  million  at  June  30,  2000,  is  being  amortized  on  a
straight-line basis over twenty-five years from the acquisition date.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
<S>                                                                              <C>
    (Dollars in Millions)
    Retained interests in securitization transactions                            $117.6
    Pre-acquisition contingencies                                                  32.2
    Business restructuring, including adjustments to reflect dispositions          26.4
    Other                                                                          23.9
                                                                                 ------
         Total second quarter increase                                           $200.1
                                                                                 ======

---------------------------------------------------------------------------------------
</TABLE>

The majority of the  retained  interest  adjustment  is related to two of the 18
retained  securitization  interests  acquired in the Newcourt  transaction.  The
receivables  underlying  these  interests  were  originated in 1999 and included
substantial trucking industry receivables.


                                       9
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The  following  table  summarizes  the activity in the  restructuring  liability
related to the Newcourt acquisition.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------

                                                  Severance and
                                                      Other         Leasehold        Transaction
                                                   Termination     Termination        and Other
                                                      Costs           Costs             Costs           Total
                                                  -------------    -----------       -----------       -------
                                                                      (Dollars in Millions)
<S>                                                  <C>              <C>              <C>             <C>
Balance at November 15, 1999                         $102.1           $24.5            $ 72.6          $199.2
   Cash payments                                      (48.1)             --             (38.0)          (86.1)
   Transaction fees settled in CIT stock                 --              --             (14.3)          (14.3)
   Non-cash reductions                                   --              --              (2.5)           (2.5)
                                                     ------           -----            ------          ------
Balance at December 31, 1999                           54.0            24.5              17.8            96.3
   Cash payments                                      (21.3)             --              (5.3)          (26.6)
                                                     ------           -----            ------          ------
Balance at March 31, 2000                              32.7            24.5              12.5            69.7
   Cash payments                                      (23.7)           (6.5)             (2.4)          (32.6)
   Additions                                            6.7              --                --             6.7
   Non-cash reductions                                   --            (2.4)             (7.4)           (9.8)
                                                     ------           -----            ------          ------
Balance at June 30, 2000                             $ 15.7           $15.6            $  2.7          $ 34.0
                                                     ======           =====            ======          ======

------------------------------------------------------------------------------------------------------------------
</TABLE>

Note 6 - Selected Pro Forma Information

The unaudited condensed consolidated  statements of income for the three and six
months ended June 30, 2000 and the  unaudited pro forma  condensed  consolidated
statement of income for the three and six months ended June 30, 1999 follow. The
1999  pro  forma  statement  has  been  prepared   assuming  that  the  Newcourt
acquisition had occurred at the beginning of the period.


                                       10
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------

                                     For the Three Months              For the Six Months
                                        Ended June 30,                   Ended June 30,
                                    -----------------------        --------------------------
                                     2000            1999*           2000              1999*
                                    ------          -------        --------         ---------
                                         (Dollars in Millions, except per share amounts)
<S>                                <C>              <C>           <C>               <C>
Operating revenue                   $591.5           $632.8        $1,178.8          $1,179.0
Net income                           151.4            149.6           295.3             269.7
Basic earnings per share              0.58             0.57            1.13              1.02
Diluted earnings per share            0.58             0.56            1.12              1.01

---------------------------------------------------------------------------------------------
</TABLE>

*     1999 pro forma results include the following: a second quarter disposal of
      two automotive  leasing units  resulting in a $34.3 million  pre-tax gain,
      $15.5  million  after-tax  and $0.06  pro  forma  EPS and a first  quarter
      non-recurring   gain  from  the   extinguishment  of  certain   derivative
      instruments by Newcourt of $56.6 million  pretax,  $31.1 million after tax
      and $0.12 pro forma EPS.

The pro forma results have been prepared for comparative  purposes only, and are
based on the historical  operating results of Newcourt prior to the acquisition.
The pro forma  results  include  certain  adjustments,  primarily  to  recognize
accretion and amortization  based on the allocated  purchase price of assets and
liabilities.  Further,  the 1999  results do not include cost  savings,  reduced
securitization activity and other initiatives  contemplated by CIT in connection
with the  acquisitions.  Accordingly,  management does not believe that the 1999
pro forma results are  indicative of the actual results that would have occurred
had the acquisition closed at the beginning of the year.

Note 7 - Recent Accounting Pronouncements

During 1999, the Financial  Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards ("SFAS") No. 137, "Accounting for Derivative
Instruments  and  Hedging  Activities--Deferral  of the  Effective  Date of FASB
Statement No. 133, an amendment of FASB Statement No. 133". SFAS 137 delayed the
implementation  of SFAS 133,  which is now effective for all fiscal  quarters of
all fiscal  years  beginning  after June 15,  2000.  During June 2000,  the FASB
issued SFAS 138,  "Accounting  for Certain  Derivative  Instruments  and Certain
Hedging  Activities,  an amendment of FASB Statement No. 133",  which amends the
accounting  and  reporting  of  certain   derivative   instruments  and  hedging
activities.  We have not yet finalized the  evaluation of the impact of SFAS 133
and 138.


                                       11
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8 - Summarized Financial Information of Subsidiaries

The following table shows summarized  consolidated financial information for CIT
Holdings LLC and its wholly owned subsidiary,  AT&T Capital.  CIT has guaranteed
on a full and  unconditional  basis the existing  registered debt securities and
certain  other  indebtedness  of  these  subsidiaries.  Therefore,  CIT  has not
presented   related   financial   statements  or  other  information  for  these
subsidiaries  on a  stand-alone  basis.  The following  summarized  consolidated
financial  information  reflects results as of and for the six months ended June
30,  2000 and also the  transfer  of  various  subsidiaries  amongst  other  CIT
entities during January 2000.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------

                                                               Six Months Ended June 30, 2000
                                                   --------------------------------------------------
                                                   CIT Holdings LLC                      AT&T Capital
                                                   ----------------                      ------------
                                                                   (Dollars in Millions)
<S>                                                       <C>                               <C>
Operating revenue                                         $341.3                            $192.5
Operating expenses                                         179.8                             127.3
Operating income before taxes                              161.5                              65.2
Net income                                                 100.1                              37.9
</TABLE>

<TABLE>
<CAPTION>
                                                                      At June 30, 2000
                                                   --------------------------------------------------
                                                   CIT Holdings LLC                      AT&T Capital
                                                   ----------------                      ------------
                                                                   (Dollars in Millions)
<S>                                                     <C>                               <C>
Assets
Cash and cash equivalents                               $  175.1                          $  172.6
Financing and leasing portfolio assets                   6,907.5                           5,052.3
Receivables from affiliates and other assets             1,220.2                             765.8
                                                        --------                          --------
Total assets                                            $8,302.8                          $5,990.7
                                                        ========                          ========
Liabilities and Stockholders' Equity
Liabilities:
Debt                                                    $5,039.6                          $4,641.4
Other                                                      187.0                             104.2
                                                        --------                          --------
Total liabilities                                        5,226.6                           4,745.6
Total stockholders' equity                               3,076.2                           1,245.1
                                                        --------                          --------
Total liabilities and stockholders' equity              $8,302.8                          $5,990.7
                                                        ========                          ========

-----------------------------------------------------------------------------------------------------
</TABLE>


                                       12
<PAGE>

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
and             CONDITION AND RESULTS OF OPERATIONS
ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                MARKET RISK

OVERVIEW

Quarterly and  six-month  net income,  EPS and selected  ratio  comparisons  are
presented in the following table.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------

                                                      Three Months Ended                     Six Months Ended
                                             ---------------------------------------      ----------------------
                                                     June 30,              March 31,             June 30,
                                             -------------------------                    ----------------------
                                               2000            1999          2000           2000          1999
                                             --------        ---------     --------       --------      --------
                                                       (Dollars in Millions, except per share amounts)
<S>                                           <C>              <C>          <C>            <C>           <C>
Net income                                    $151.4           $96.3        $143.9         $295.3        $188.2
Net income per diluted share                  $ 0.58           $0.59        $ 0.55         $ 1.12        $ 1.16
Return on average stockholders' equity         10.7%           13.7%         10.3%          10.5%         13.6%
Return on average tangible
    stockholders' equity                       15.9%           15.5%         15.3%          15.6%         15.1%
Return on average earning assets (AEA)         1.49%           1.66%         1.48%          1.48%         1.64%

----------------------------------------------------------------------------------------------------------------
</TABLE>

The  earnings  per share  reflect  higher 2000  earnings  offset by the dilutive
effect of stock issued in connection  with the November 15, 1999  acquisition of
Newcourt.  Before the amortization of goodwill, second quarter 2000 earnings per
diluted  share  improved to $0.66 from $0.62 in both the second  quarter of 1999
and the first quarter of 2000.  The second  quarter and six-month  2000 earnings
reflect growth from our 1999 acquisition activities,  solid fee and other income
generation,  as well as considerable  expense savings related to our operational
integrations.  The declines in return on AEA reflect higher  leverage due to the
1999 acquisitions and a narrower net finance margin.

New business  origination  volume,  excluding  factoring volume,  for the second
quarter of 2000 was $6.1 billion  compared to $6.8 billion for the first quarter
of 2000 and $2.9 billion in the second  quarter of 1999.  The increase over last
year was due primarily to the Newcourt  acquisition  while the decrease from the
prior quarter was due to lower  consumer and  commercial  portfolio  acquisition
activity in the second quarter.

Total managed  assets  increased to $53.4 billion at June 30, 2000, up 3.8% from
$51.4 billion at year-end,  and $28.4 billion at June 30, 1999. The net increase
in managed  assets of $0.2 billion  over March 31, 2000 was  achieved  after the
sales of non-strategic portfolios amounting to approximately $0.5 billion during
the  quarter.  Commercial  managed  assets were $45.9  billion at June 30, 2000,
compared to $44.0


                                       13
<PAGE>

billion at December 31, 1999.  Consumer managed assets were $7.2 billion at June
30, 2000, compared to $7.3 billion at December 31, 1999, and were down from $8.1
billion a year ago, reflecting our decision to exit certain lower return product
lines.  Total portfolio  assets increased to $42.6 billion from $40.4 billion at
year-end 1999 and $25.3 billion at June 30, 1999.

NET FINANCE MARGIN

A comparison of net finance margin is set forth below.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------

                                                                   Three Months Ended
                                                   ---------------------------------------------------
                                                               June 30,                      March 31,
                                                   ------------------------------
                                                      2000                 1999                 2000
                                                   ---------            ---------            ---------
                                                                  (Dollars in Millions)
<S>                                                <C>                  <C>                  <C>
Finance income                                     $ 1,301.8            $   554.4            $ 1,228.8
Interest expense                                       630.9                280.8                571.9
                                                   ---------            ---------            ---------
  Net finance income                                   670.9                273.6                656.9
Depreciation on operating lease equipment              311.7                 59.2                307.8
                                                   ---------            ---------            ---------
  Net finance margin                               $   359.2            $   214.4            $   349.1
                                                   =========            =========            =========

AEA                                                $40,690.9            $23,166.2            $38,968.1

Net finance margin as a % of AEA                       3.53%                3.70%                3.58%

------------------------------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------

                                              Six Months Ended
                                        ---------------------------
                                                   June 30,                          Increase
                                        ---------------------------         --------------------------
                                           2000              1999            Amount            Percent
                                        ---------         ---------         ---------          -------
                                                             (Dollars in Millions)
<S>                                     <C>               <C>               <C>                 <C>
Finance income                          $ 2,530.6         $ 1,095.9         $ 1,434.7           130.9%
Interest expense                          1,202.8             554.1             648.7           117.1
                                        ---------         ---------         ---------           ------
  Net finance income                      1,327.8             541.8             786.0           145.1
Depreciation on operating lease
    equipment                               619.5             115.3             504.2           437.3
                                        ---------         ---------         ---------           ------
  Net finance margin                    $   708.3         $   426.5         $   281.8            66.1%
                                        =========         =========         =========           ======

AEA                                     $39,778.6         $22,905.3         $16,873.5            73.7%

Net finance margin as a % of AEA            3.56%             3.72%

------------------------------------------------------------------------------------------------------
</TABLE>


                                       14
<PAGE>

Net finance margin  increased 67.5% to $359.2 million for the three months ended
June 30, 2000 from the same period in 1999,  and was up $10.1  million  over the
first quarter of 2000. The year over year increase  primarily reflects growth in
our  financing  assets due to our 1999  acquisitions  and  internally  generated
portfolio  growth.  Net finance  margin for the six-month  period ended June 30,
2000  increased  $281.8  million  or 66.1%  from the same  period in 1999.  As a
percentage  of AEA,  net finance  margin  declined to 3.53% for the three months
ended June 30, 2000 from 3.70% in the second  quarter of 1999, and 3.58% for the
first  quarter of 2000.  For the six months  ended June 30,  2000,  net  finance
margin as a  percentage  of AEA declined to 3.56% from 3.72% for the same period
in 1999. The year over year comparisons reflect several factors including rising
market interest rates,  wider debt pricing spreads,  competitive market pricing,
and the growing operating lease portfolio. Our operating leases, which generally
have lower net margins than finance  receivables  at  inception,  also  generate
equipment gains, renewal fees and tax depreciation benefits.

Finance income for the three months ended June 30, 2000 increased $747.4 million
and $73.0 million to $1,301.8  million,  from the comparable 1999 period and the
first quarter of 2000,  respectively.  Finance  income for the six-month  period
ended June 30, 2000 increased $1,434.7 million or 130.9% from the same period in
1999. As a percentage of AEA, finance income (excluding interest income relating
to short-term interest-bearing deposits) was 12.53% for the second quarter ended
June 30, 2000, compared to 9.45% for the same quarter of 1999 and 12.46% for the
first quarter of 2000. For the six months ended June 30, 2000 and 1999,  finance
income  (excluding  interest  income  relating  to  short-term  interest-bearing
deposits) as a percentage  of AEA was 12.51% and 9.45%,  respectively.  The year
over year  increase  in yield was due to changes in product mix  primarily  as a
result of the fourth quarter 1999 Newcourt acquisition.

Interest  expense  for the three  months  ended June 30, 2000  increased  $350.1
million or 124.7% from the second  quarter 1999 and $59.0 million from March 31,
2000, and for the six-month period ended June 30, 2000, increased $648.7 million
or 117.1% from the same period in 1999. As a percentage of AEA, interest expense
(excluding interest expense relating to short-term interest-bearing deposits and
dividends related to the Company's  preferred capital securities) for the second
quarter of 2000  increased  to 5.93% from 4.73% for the June 30, 1999 period and
5.72% for the March 31, 2000 period,  and  increased to 5.83% from 4.72% for the
six-month periods ended June 30, 2000 and 1999, respectively. The increases from
the first to second  quarters  of 2000 and from the  comparable  periods of 1999
reflect  the  rising  interest  rate  environment  in the  latter  half of 1999,
which continued into 2000.


                                       15
<PAGE>

The operating equipment lease portfolio was $6.4 billion at June 30, 2000 versus
$6.1 billion at December  31, 1999 and $3.4 billion at June 30, 1999.  Operating
lease margin (rental income less depreciation expense as a percentage of average
operating leases) for the second quarter of 2000 was 8.2%,  relatively unchanged
from the  first  quarter  of 2000 and up from  6.9% for the  prior  year  second
quarter  while  the  six-month  periods  were  8.2% and 6.8% for 2000 and  1999,
respectively.  Depreciation  on operating  lease equipment for the quarter ended
June 30, 2000 was $311.7  million,  up from $59.2 million for the same period in
1999 and $307.8  million for the first  quarter of 2000,  and for the six months
ended June 30, 2000,  depreciation  was $619.5 million up from $115.3 million in
the  same  period  in  1999.  As  a  percentage  of  average  operating  leases,
depreciation  expense,  on an annualized  basis,  was 19.5% and 7.4% at June 30,
2000 and June 30, 1999, respectively.  The year over year increases in operating
lease margin and depreciation  reflects the acquired Newcourt portfolios,  which
include  shorter-term  assets  with higher  margins  and more rapid  depreciable
lives.

We seek to mitigate interest rate risk by matching the repricing characteristics
of our assets  with our  liabilities,  which is done in part  through the use of
derivative  financial  instruments,   principally  interest  rate  swaps,  whose
notional amounts were $11,959.9 million at June 30, 2000 and $8,779.4 million at
December 31,  1999.  The  increase in interest  rate swaps  reflects our current
strategy to reduce  funding costs by issuing  floating rate debt and swapping it
into fixed rate. See  "Liquidity  Risk  Management"  for further  discussion.  A
comparative analysis of the weighted average principal  outstanding and interest
rates paid on our debt  before and after the  effect of  interest  rate swaps is
shown in the following table.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------

                                                             Three Months Ended June 30, 2000
                                                ---------------------------------------------------------
                                                      Before Swaps                        After Swaps
                                                ----------------------             ----------------------
                                                                   (Dollars in Millions)
<S>                                             <C>              <C>               <C>              <C>
Commercial paper and variable rate
   senior notes                                 $20,025.2        6.47%             $14,952.9        6.73%
Fixed rate senior and subordinated notes         17,935.4        6.70%              23,007.7        6.62%
                                                ---------                          ---------
Composite interest rate paid                    $37,960.6        6.58%             $37,960.6        6.67%
                                                =========                          =========
</TABLE>


<TABLE>
<CAPTION>
                                                             Three Months Ended June 30, 1999
                                                ---------------------------------------------------------
                                                      Before Swaps                        After Swaps
                                                ----------------------             ----------------------
                                                                   (Dollars in Millions)
<S>                                             <C>              <C>               <C>              <C>
Commercial paper and variable rate
   senior notes                                 $10,860.1        4.93%             $ 8,475.0        4.92%
Fixed rate senior and subordinated notes          8,844.0        6.18%              11,229.1        6.25%
                                                ---------                          ---------
Composite interest rate paid                    $19,704.1        5.49%             $19,704.1        5.68%
                                                =========                          =========

---------------------------------------------------------------------------------------------------------
</TABLE>


                                       16
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------

                                                             Six Months Ended June 30, 2000
                                               ---------------------------------------------------------
                                                      Before Swaps                        After Swaps
                                               ----------------------             ----------------------
                                                                  (Dollars in Millions)
<S>                                            <C>              <C>               <C>              <C>
Commercial paper and variable rate
   senior notes                                $19,290.8        6.26%             $15,097.8        6.49%
Fixed rate senior and subordinated notes        17,849.7        6.68%              22,042.7        6.58%
                                               ---------                          ---------
Composite interest rate paid                   $37,140.5        6.46%             $37,140.5        6.54%
                                               =========                          =========
</TABLE>

<TABLE>
<CAPTION>
                                                             Six Months Ended June 30, 1999
                                               ---------------------------------------------------------
                                                    Before Swaps                        After Swaps
                                               ----------------------             ----------------------
                                                                  (Dollars in Millions)
<S>                                            <C>              <C>              <C>               <C>
Commercial paper and variable rate
   senior notes                                $10,767.0        4.97%             $ 8,406.4        4.94%
Fixed rate senior and subordinated notes         8,670.4        6.19%              11,031.0        6.26%
                                               ---------                          ---------
Composite interest rate paid                   $19,437.4        5.51%             $19,437.4        5.69%
                                               =========                          =========

--------------------------------------------------------------------------------------------------------
</TABLE>

The weighted average composite  interest rate after swaps in each of the periods
presented  increased  from the composite  interest  rate before swaps  primarily
because a larger  proportion  of our debt,  after giving effect to interest rate
swaps,  was subject to a fixed  interest  rate.  However,  the weighted  average
interest rates before swaps do not necessarily reflect the interest expense that
would have been incurred had we chosen to manage  interest rate risk without the
use of such swaps.

FEES AND OTHER INCOME

Non-spread  revenues for the three  months  ended June 30, 2000  totaled  $232.3
million,  compared to $74.8  million  for the second  quarter of 1999 and $238.2
million for the March 31, 2000  quarter.  For the six months ended June 30, 2000
and 1999,  non-spread revenues totaled $470.5 million and $139.5 million.  These
year over year increases reflect the higher proportion of fee-based  business in
the acquired  Newcourt  business units, as the combination of Vendor  Technology
Finance and Structured Finance  contributed $109.9 million and $208.7 million to
the three and six-month increases, respectively.


                                       17
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------

                                                      Three Months Ended                 Six Months Ended
                                            -------------------------------------      --------------------
                                                  June 30,              March 31,             June 30,
                                            --------------------                       --------------------
                                              2000         1999           2000           2000         1999
                                            -------       ------        ---------      -------      -------
                                                                 (Dollars in Millions)
<S>                                          <C>           <C>           <C>            <C>          <C>
Fees and other income                        $121.1        $20.4         $121.4         $242.5       $ 51.3
Gains on sales of leasing equipment            39.4         20.7           21.8           61.2         29.9
Factoring commissions                          38.2         29.0           38.5           76.7         53.0
Gains on securitizations                       23.0          4.7           19.0           42.0          5.3
Gains on venture capital investments           10.6           --           37.5           48.1           --
                                             ------        -----         ------         ------       ------
                                             $232.3        $74.8         $238.2         $470.5       $139.5
                                             ======        =====         ======         ======       ======

-----------------------------------------------------------------------------------------------------------
</TABLE>

The growth in fees and other income  reflects fees  associated with the acquired
Newcourt  businesses,  including strong joint venture revenues,  syndication and
structuring related fees, as well as gains from consumer whole loan sales. Gains
on equipment  sales  increased due to the higher volume of equipment  coming off
lease. Factoring  commissions,  for both the three and six months ended June 30,
2000, increased  reflecting higher internally  generated  origination volume and
the 1999 acquisitions. Securitization gains were $23.0 million or 9.4% of pretax
income  versus $19.0  million or 8.2% of pretax  income for the first quarter of
2000, and $4.7 million or 3.2% of pretax income for the same period in 1999. The
higher year over year gains represents the additional securitization volume from
the former  Newcourt  operations.  Gains of $10.6 million for the second quarter
and $48.1  million  for the six months  ended June 30,  2000 were  realized on a
number of venture capital investment transactions,  one of which accounted for a
substantial portion of the gains in the first quarter of 2000.

SALARIES AND GENERAL OPERATING EXPENSES

Salaries and general  operating  expenses  totaled $257.5 million for the second
quarter of 2000, up from $108.0 million in the comparable 1999 period,  but down
$10.7  million from the first  quarter of 2000 due to continued  realization  of
integration benefits. For the six-month period ended June 30, 2000, salaries and
general operating  expenses increased $311.9 million or 145.9% to $525.7 million
from $213.8 for the same period in 1999.  The year over year  increases  reflect
increased  personnel  and  facilities  due to the 1999  acquisitions  and normal
expense  increases.  Although  up from the prior year  quarter  and six  months,
second  quarter  2000  expense  levels  reflect  annualized  run rate savings of
approximately $150 million from pro-forma combined  pre-acquisition  levels, our
original  target for expense  reduction.  Expense  savings to date are primarily
from the  elimination  of  duplicate  corporate  overhead and  consolidation  of
non-revenue department activities. Operational savings from the consolidation of
certain servicing


                                       18
<PAGE>

centers, as well as real estate cost reductions,  are expected to be realized in
the  second  half of 2000.  Headcount  was 7,400 at quarter  end,  down 855 from
December 31, 1999 and 250 from March 31, 2000.

Management  monitors  productivity  via the  efficiency  ratio  and the ratio of
salaries and general operating expenses to average managed assets ("AMA"). These
ratios are set forth in the following table.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------

                                                             Three Months Ended                 Six Months Ended
                                                     ---------------------------------          ----------------
                                                         June 30,             March 31,             June 30,
                                                     ----------------                           ----------------
                                                     2000        1999           2000            2000        1999
                                                     ----        ----           ----            ----        ----
<S>                                                  <C>         <C>            <C>             <C>         <C>
Efficiency ratio                                     43.9%       38.0%          46.0%           45.0%       38.4%
Salaries and general operating expenses as
    a percentage of AMA                              2.03%       1.66%          2.15%           2.09%       1.67%

-----------------------------------------------------------------------------------------------------------------
</TABLE>

The  decrease in  expenses as noted above  reduced the two ratios from the March
31, 2000 quarter levels. The higher 2000 ratios,  when compared to 1999, reflect
the acquired Vendor Technology  Finance  operations,  which carry  significantly
higher expense ratios.  Management is continuing expense savings  initiatives to
further improve the ratios.

GOODWILL AMORTIZATION

Goodwill  amortization was $20.6 million and $41.1 million for the three and six
months  ended June 30,  2000,  versus $5.0 million and $8.2 million for the same
periods in 1999. These increases  reflect the impact of the 1999 acquisitions of
Newcourt,  Heller  and  Congress,  each of which  were  accounted  for under the
purchase method.

Goodwill related to the Newcourt acquisition was increased by approximately $200
million at June 30, 2000, as described in Note 5. As a result,  goodwill, net of
amortization,  as of June 30, 2000,  increased  $159.3  million,  or 8.6%,  from
December 31, 1999.

Additional  restructuring  activities,  which were contemplated in CIT's overall
integration plan, are expected to occur  prospectively.  Associated  incremental
exit costs or sales of  portfolio  assets  will also be  reflected  as  goodwill
adjustments in 2000, or  alternatively  in earnings,  to the extent  applicable.
Based upon  currently  available  information  and final  determination  of fair
values,  management  anticipates that as a result of the above factors,  further
adjustments to goodwill will take place in 2000.


                                       19
<PAGE>

RESERVE AND PROVISION FOR CREDIT LOSSES/CREDIT QUALITY

The reserve for credit losses is periodically  reviewed for adequacy considering
economic conditions,  collateral values and credit quality indicators, including
charge-off  experience,  and levels of past due loans and non-performing assets.
The reserve  increased to $460.3 million (1.39% of finance  receivables) at June
30, 2000 from $446.9 million (1.44% of finance receivables) at December 31, 1999
and $276.8 million (1.32% of finance  receivables)  at June 30, 1999, due to the
portfolio  growth for the first six months and the 1999  acquisitions.  However,
the reserve ratio has declined in 2000 due to mix changes in the portfolio.  The
relationship of the reserve for credit losses to non-accrual finance receivables
was 73.6% at June 30, 2000 compared to 87.6% at December 31, 1999.

The  provision  for  credit  losses  for the  second  quarter  of 2000 was $64.0
million,  up from $23.8 million in the second  quarter of 1999 and $61.6 million
for the first  quarter of 2000,  reflecting  higher 2000 net credit  losses over
1999 levels and provisions for portfolio growth.

For the quarter ended June 30, 2000, net credit losses were $60.7 million (0.73%
of average  finance  receivables) as compared to $21.4 million (0.41% of average
finance  receivables) for the second quarter last year and $53.0 million for the
first quarter of 2000 (0.67% of average finance receivables). For the six months
ended June 30, 2000 and 1999, net credit losses were $113.7 million  (0.70%) and
$42.2  million  (0.41%),  respectively.  The increase in net credit  losses as a
percentage of average finance  receivables  reflects  product mix changes due to
the 1999 acquisitions.


                                       20
<PAGE>

The  following  table sets forth net credit  losses as a  percentage  of average
finance receivables (annualized), excluding finance receivables held for sale.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------

                                                 Three Months Ended               Six Months Ended
                                        -----------------------------------      ------------------
                                              June 30,            March 31,           June 30,
                                        ---------------------                    ------------------
                                        2000          1999          2000         2000          1999
                                        ----          ----        ---------      ----          ----
                                                            (Dollars in Millions)
<S>                                     <C>           <C>           <C>          <C>           <C>
Equipment Financing and Leasing         0.34%         0.15%         0.45%        0.40%         0.13%
Vendor Technology Finance               1.06            --          0.76         0.93            --
Commercial Finance                      0.79          0.38          0.59         0.70          0.40
Structured Finance                      0.11            --            --         0.05            --
                                        ----          ----          ----         ----          ----
  Total Commercial                      0.64          0.23          0.55         0.60          0.22
Consumer                                1.34          1.14          1.48         1.41          1.16
                                        ----          ----          ----         ----          ----
  Total                                 0.73%         0.41%         0.67%        0.70%         0.41%
                                        ====          ====          ====         ====          ====

----------------------------------------------------------------------------------------------------
</TABLE>

Year over year,  commercial net credit losses for the quarter were up from 0.23%
in 1999 to 0.64% due mainly to higher  charge-offs  in Equipment  Financing  and
Leasing and Commercial  Finance and to the addition of Vendor Technology Finance
and Structured Finance.  Consumer net credit losses were 1.34% compared to 1.14%
for the three months ended June 30, 2000 and 1999,  respectively,  primarily due
to higher losses in the manufactured housing portfolio.  Equipment Financing and
Leasing net credit losses increased primarily due to the transfer of assets from
the acquired Newcourt portfolios.  The increase in Commercial Finance net credit
losses was primarily due to write-offs associated with a food wholesaler.


                                       21
<PAGE>

PAST DUE AND NON-PERFORMING ASSETS

The following table sets forth certain information concerning past due and total
non-performing   assets  and  related  percentages  of  receivables,   excluding
receivables  held for sale,  at June 30,  2000,  March 31, 2000 and December 31,
1999.  Non-performing  assets  reflect both finance  receivables  on non-accrual
status and assets received in satisfaction of loans.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------

                                                 At June 30,               At March 31,            At December 31,
                                                    2000                       2000                      1999
                                              ----------------        --------------------      ---------------------
                                                                      (Dollars in Millions)
<S>                                           <C>        <C>            <C>        <C>          <C>           <C>
Finance receivables, past due 60
     days or more
  Equipment Financing and Leasing             $239.7     1.84%          $305.1     2.35%        $209.6        1.93%
  Vendor Technology Finance                    344.8     4.72            322.8     4.26          376.4(1)     4.15(1)
  Commercial Finance                            74.4     0.98             59.2     0.78           64.0        0.91
  Structured Finance                            94.9     8.06             86.9     7.83             --(1)       --(1)
                                              ------     -----          ------     -----        ---------     -------
    Total Commercial Segments                  753.8     2.59            774.0     2.65          650.0        2.42
  Consumer                                     174.2     4.33            178.2     4.32          189.1(2)     4.62(2)
                                              ------     -----          ------     -----        ---------     -------
    Total                                     $928.0     2.80%          $952.2     2.85%        $839.1        2.71%
                                              ======     =====          ======     =====        =========     =======

Total non-performing assets
  Equipment Financing and Leasing             $267.4     2.05%          $303.6     2.34%        $139.9        1.29%
  Vendor Technology Finance                    197.0     2.70            247.2     3.27          309.4(1)     3.41(1)
  Commercial Finance                            39.6     0.52             22.6     0.30           27.6        0.39
  Structured Finance                           107.8     9.16             85.9     7.74             --(1)       --(1)
                                              ------     -----          ------     -----        ---------     -------
    Total Commercial Segments                  611.8     2.10            659.3     2.26          476.9        1.77
  Consumer                                     168.9     4.20            162.3     3.93          158.5(2)     3.87(2)
                                              ------     -----          ------     -----        ---------     -------
    Total                                     $780.7     2.36%          $821.6     2.46%        $635.4        2.05%
                                              ======     =====          ======     =====        =========     =======

---------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   All Newcourt  Segment data, at December 31, 1999, as presented  above,  is
      included in Vendor Technology Finance.  Additionally, the 1999 amounts and
      ratios do not reflect  integration  related  portfolio  transfers  between
      Vendor Technology Finance,  Structured Finance and Equipment Financing and
      Leasing.

(2)   For these calculations,  certain finance receivables held for sale and the
      associated past due and non-performing balances are included.

For the second quarter,  the decrease in commercial past due and  non-performing
accounts  reflected the collection of a large account,  as well as stabilization
in delinquency levels following the consolidation of the servicing centers.


                                       22
<PAGE>

INCOME TAXES

The  effective  income tax rates for the second  quarters  of 2000 and 1999 were
38.1% and 34.7%, respectively. For the six-month periods ended June 30, 2000 and
1999,  the effective  income tax rates were 38.1% and 34.8%,  respectively.  The
increase  in the 2000  effective  tax rate was  primarily  due to  nondeductible
goodwill amortization.

FINANCING AND LEASING ASSETS

Our managed assets grew $1.9 billion  (3.8%),  to $53.4 billion at June 30, 2000
from $51.4 billion at December 31, 1999.  Financing and leasing assets grew $2.2
billion  (5.5%) to $42.6 billion at June 30, 2000 from $40.4 billion at December
31, 1999.  Owned asset growth was tempered in the second  quarter by the planned
sales of  non-strategic  portfolios  amounting to  approximately  $0.5  billion.
Managed assets include finance receivables,  operating lease equipment,  finance
receivables  held  for  sale,  certain  investments,   and  finance  receivables
previously securitized and still managed by us.

The managed  assets of our  business  segments and the  corresponding  strategic
business units are presented in the following table.


                                       23
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                               June 30,     December 31,              Change
                                                                 2000           1999            Amount      Percent
                                                              ---------      ---------        --------      -------
                                                               (Dollars in Millions)
<S>                                                           <C>            <C>                <C>           <C>
Equipment Financing
 Finance receivables                                          $11,478.5      $10,899.3          $579.2        5.0%
 Operating lease equipment, net                                 1,030.5        1,066.2           (35.7)      (3.3)
                                                              ---------      ---------        ---------      -----
  Total                                                        12,509.0       11,965.5           543.5        4.5
                                                              ---------      ---------        ---------      -----
Capital Finance
 Finance receivables                                            1,561.0        1,838.0          (277.0)     (15.1)
 Operating lease equipment, net                                 3,235.8        2,931.8           304.0       10.4
 Liquidating portfolio (1) (2)                                    202.9          281.4           (78.5)     (27.9)
                                                              ---------      ---------        ---------      -----
  Total                                                         4,999.7        5,051.2           (51.5)      (1.0)
                                                              ---------      ---------        ---------      -----
  Total Equipment Financing and Leasing Segment                17,508.7       17,016.7           492.0        2.9
                                                              ---------      ---------        ---------      -----

Vendor Technology Finance
 Finance receivables                                            8,227.7        7,488.9           738.8        9.9
 Operating lease equipment, net                                 2,105.8        2,108.8            (3.0)      (0.1)
                                                              ---------      ---------        ---------      -----
  Total Vendor Technology Finance Segment                      10,333.5        9,597.7           735.8        7.7
                                                              ---------      ---------        ---------      -----

Structured Finance
 Finance receivables                                            1,980.6        1,933.9            46.7        2.4
 Operating lease equipment, net                                    38.8             --            38.8      100.0
                                                              ---------      ---------        ---------      -----
  Total Structured Finance Segment                              2,019.4        1,933.9            85.5        4.4
                                                              ---------      ---------        ---------      -----

Commercial Services                                             4,287.1        4,165.1           122.0        2.9
Business Credit                                                 3,294.7        2,837.0           457.7       16.1
                                                              ---------      ---------        ---------      -----
  Total Commercial Finance Segment                              7,581.8        7,002.1           579.7        8.3
                                                              ---------      ---------        ---------      -----

  Total Commercial Segments                                    37,443.4       35,550.4         1,893.0        5.3
                                                              ---------      ---------        ---------      -----

Home equity                                                     2,459.7        2,215.4           244.3       11.0
Manufactured housing                                            1,684.2        1,666.9            17.3        1.0
Recreational vehicles                                             506.8          361.2           145.6       40.3
Liquidating portfolio (3)                                         330.0          462.8          (132.8)     (28.7)
                                                              ---------      ---------        ---------      -----
  Total Consumer Segment                                        4,980.7        4,706.3           274.4        5.8
                                                              ---------      ---------        ---------      -----

Other - Equity Investments                                        203.4          137.3            66.1       48.1
                                                              ---------      ---------        ---------      -----

  Total Financing and Leasing Portfolio Assets                 42,627.5       40,394.0         2,233.5        5.5
                                                              ---------      ---------        ---------      -----

Finance receivables previously securitized
 Commercial                                                     8,478.1        8,471.5             6.6       (0.1)
 Consumer                                                       1,755.3        1,987.0          (231.7)     (11.7)
 Consumer liquidating portfolio (3)                               510.0          580.8           (70.8)     (12.2)
                                                              ---------      ---------        ---------      -----
  Total                                                        10,743.4       11,039.3          (295.9)      (2.7)
                                                              ---------      ---------        ---------      -----

  Total Managed Assets                                        $53,370.9      $51,433.3        $1,937.6        3.8%
                                                              =========      =========        =========      =====
----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   Consists  primarily of ocean going maritime and project  finance.  Capital
      Finance discontinued marketing to these sectors in 1997.
(2)   Operating  lease  equipment,  net, of $16.7  million and $19.1 million are
      included in the  liquidating  portfolios at June 30, 2000 and December 31,
      1999, respectively.
(3)   In 1999,  we  decided to exit the  recreational  boat and  wholesale  loan
      product lines.

                                       24
<PAGE>

CONCENTRATIONS

Financing and Leasing Assets Composition

Our ten largest  financing  and leasing  asset  accounts at June 30, 2000 in the
aggregate accounted for 4.1% of total financing and leasing assets, all of which
are  commercial   accounts   secured  by  equipment,   accounts   receivable  or
inventories.

Geographic Composition

The following table presents financing and leasing assets by customer location.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------

                                       At June 30, 2000                 At December 31, 1999*
                                  -------------------------           ------------------------
                                    Amount          Percent             Amount         Percent
                                  ---------         -------           ---------        -------
                                                       (Dollars in Millions)
<S>                               <C>                <C>              <C>               <C>
United States
    Northeast                     $ 8,593.5          20.2%            $ 8,257.2         20.5%
    West                            8,493.0          19.9               7,594.0         18.8
    Midwest                         7,652.2          17.9               7,042.7         17.4
    Southeast                       6,221.8          14.6               5,380.5         13.3
    Southwest                       4,838.7          11.4               4,426.1         11.0
                                  ---------          -----            ---------         -----
  Total United States              35,799.2          84.0              32,700.5         81.0
                                  ---------          -----            ---------         -----

Foreign
    Canada                          2,135.6           5.0               2,797.5          6.9
    All other                       4,692.7          11.0               4,896.0         12.1
                                  ---------         ------            ---------        ------
  Total                           $42,627.5         100.0%            $40,394.0        100.0%
                                  =========         ======            =========        ======

---------------------------------------------------------------------------------------------
</TABLE>

*     Certain  December  31, 1999  balances  have been  conformed to the current
      period presentation.

Our managed asset geographic  diversity does not differ  significantly  from our
owned asset geographic diversity.


                                       25
<PAGE>

Our financing and leasing asset portfolio in the United States is diversified by
state. At June 30, 2000, with the exception of California (11.0%), Texas (8.0%),
and New York  (6.3%),  no state  represented  more  than 4.3% of  financing  and
leasing assets.  Our managed asset geographic  composition did not significantly
differ from our December 31, 1999 managed asset geographic composition.

Financing and leasing  assets to foreign  obligors  totaled $6.8 billion at June
30, 2000. Following Canada, $2.1 billion (5.0% of financing and leasing assets),
the largest foreign exposures were England,  $1.1 billion (2.5%), and Australia,
$414.0  million  (1.0%).  Our  remaining  foreign  exposure  was  geographically
dispersed,  with no other  individual  country  exposure  greater  than  0.8% of
financing and leasing assets.

Financing  and  leasing  assets to  foreign  obligors  totaled  $7.7  billion at
December 31, 1999.  After  Canada,  $2.8 billion  (6.9% of financing and leasing
assets),  the largest foreign exposures were England,  $1.6 billion (4.0%),  and
Australia,   $397.6  million  (1.0%).   Our  remaining   foreign   exposure  was
geographically dispersed, with no other individual country exposure greater than
0.8% of financing and leasing assets.


                                       26
<PAGE>

Industry Composition

The following  table  presents  financing and leasing  assets by major  industry
class.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------

                                        At June 30, 2000                At December 31, 1999(4)
                                   -------------------------           ------------------------
                                     Amount          Percent            Amount          Percent
                                   ---------         -------           ---------        -------
                                                        (Dollars in Millions)
<S>                                <C>                <C>              <C>               <C>
Manufacturing (1)
    (none greater than 4.2%)       $ 8,335.0          19.6%            $ 8,566.5         21.2%
Retail (2)                           4,022.7           9.4               4,032.0         10.0
Transportation (3)                   3,560.5           8.3               3,348.2          8.3
Commercial airlines                  3,049.8           7.2               3,091.2          7.7
Construction equipment               2,890.7           6.8               2,697.0          6.7
Home mortgage                        2,459.7           5.8               2,215.4          5.5
Service industries                   1,855.8           4.4               1,768.1          4.4
Manufactured housing                 1,684.2           3.9               1,666.9          4.1
Financial institutions               1,312.5           3.1               1,205.3          3.0
Wholesaling                          1,227.2           2.9               1,303.6          3.2
Other (none greater than 2.7%)      12,229.4          28.6              10,499.8         25.9
                                   ---------         -----             ---------        -----
  Total                            $42,627.5         100.0%            $40,394.0        100.0%
                                   =========         ======            =========        ======

-----------------------------------------------------------------------------------------------
</TABLE>


(1)   Includes manufacturers of steel and metal products,  textiles and apparel,
      printing and paper products, and other industries.

(2)   Includes retailers of apparel (3.9%) and general merchandise (2.4%).

(3)   Includes rail, bus, and over-the-road  trucking  industries,  and business
      aircraft.

(4)   Certain  December  31, 1999  balances  have been  conformed to the current
      period presentation.

LIQUIDITY RISK MANAGEMENT

Liquidity  risk refers to the risk of CIT being  unable to meet  potential  cash
outflows promptly and cost effectively.  Factors that could cause such a risk to
arise might be a disruption of a securities  market or other source of funds. We
actively manage and mitigate liquidity risk by maintaining  diversified  sources
of funding.  The primary funding sources are commercial paper (U.S.,  Canada and
Australia),  medium-term  notes  (U.S.,  Canada  and  Europe)  and  asset-backed
securities  (U.S.  and Canada).  During the  quarter,  we issued $3.8 billion of
variable rate term debt. To reduce our financing  costs, we issued floating rate
rather than fixed rate debt,  which we swapped into fixed rate. We also maintain
committed  bank lines of credit  aggregating  $8.4  billion to provide  backstop
support of commercial paper borrowings and  approximately  $250 million of local
bank  lines to  support  our  international  operations.  Additional  sources of
liquidity are loan and lease  payments  from  customers  and  whole-loan  sales,
syndications  and  asset-backed  receivable  conduits.  At June 30, 2000,  $14.3
billion of registered,  but unissued,  debt securities  remained available under
shelf registration  statements,  including $2.0 billion of European  Medium-Term
Notes.


                                       27
<PAGE>

To ensure  uninterrupted  access to capital, we maintain strong investment grade
ratings as outlined below:

--------------------------------------------------------------------------------

                                      Short Term            Long Term
                                      ----------            ---------
Moody's                                   P-1                  A1
Standard & Poor's                         A-1                  A+
Duff & Phelps                            D-1+                  AA-
Dominion Bond Rating Service           R-1 (mid)             A (mid)

--------------------------------------------------------------------------------

As  part  of  our  continuing  program  of  accessing  the  public  and  private
asset-backed  securitization  markets as an additional liquidity source, general
equipment  finance  receivables  of $1,593.7  million were  securitized  ($913.7
million in the second  quarter) during the first half of 2000. At June 30, 2000,
we had $3.5 billion of  registered,  but unissued,  securities  available  under
public shelf registration statements relating to our asset-backed securitization
program.

We also target and monitor certain  liquidity  metrics to ensure both a balanced
liability  profile and  adequate  alternate  liquidity  availability.  Among the
target ratios are  commercial  paper as a percentage of total debt and committed
bank line coverage of outstanding commercial paper.


                                       28
<PAGE>

CAPITALIZATION

The following table presents information regarding our capital structure.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------

                                                                         At June 30,            At December 31,
                                                                            2000                     1999
                                                                         -----------            ---------------
                                                                                (Dollars in Millions)
<S>                                                                       <C>                     <C>
Commercial paper                                                          $ 9,356.2               $  8,974.0
Term debt                                                                  27,988.4                 26,399.5
Company-obligated mandatorily redeemable preferred
  securities of subsidiary trust holding solely debentures
  of the Company                                                              250.0                    250.0
Stockholders' equity                                                        5,748.8                  5,554.4
                                                                          ---------                ---------
 Total capitalization                                                     $43,343.4                $41,177.9
                                                                          =========                =========
Total  debt  (excluding   overnight   deposits)  to  stockholders'
  equity  and  Company-obligated  mandatorily
  redeemable preferred securities of subsidiary trust
  holding solely debentures of the Company                                    6.16x                    5.96x
Total debt (excluding overnight deposits) to tangible
  stockholders' equity and Company-obligated
  mandatorily redeemable preferred securities of
  subsidiary trust holding solely debentures of the
  Company                                                                     9.27x                    8.75x
Tangible stockholders' equity and Company-obligated
  mandatorily redeemable preferred securities of
  subsidiary trust holding solely debentures of the
  Company to managed assets                                                    7.5%                     7.8%

---------------------------------------------------------------------------------------------------------------
</TABLE>


                                       29
<PAGE>

STATISTICAL DATA

The following  table  presents  components of net income as a percentage of AEA,
along with other selected financial data.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------

                                                             For the Six Months Ended
                                                                      June 30,
                                                            -------------------------
                                                               2000            1999
                                                            --------        ---------
<S>                                                           <C>               <C>
Finance income (1)                                            12.51%            9.45%
Interest expense (1)                                           5.83             4.72
                                                            --------        ---------
  Net finance income                                           6.68             4.73
Depreciation on operating lease equipment                      3.11             1.01
                                                            --------        ---------
  Net finance margin                                           3.56             3.72
Fees and other income                                          2.37             1.22
                                                            --------        ---------
  Operating revenue                                            5.93             4.94
                                                            --------        ---------
Salaries and general operating expenses                        2.64             1.87
Provision for credit losses                                    0.63             0.40
Goodwill amortization                                          0.21             0.07
Minority interest in subsidiary trust holding solely
  debentures of the Company                                    0.05             0.08
                                                            --------        ---------
  Operating expenses                                           3.53             2.42
                                                            --------        ---------
  Income before provision for income taxes                     2.40             2.52
Provision for income taxes                                     0.91             0.88
                                                            --------        ---------
  Net income                                                   1.48%            1.64%
                                                           =========        =========

Average earning assets (dollars in millions)               $39,778.6        $22,905.3
                                                           =========        =========

-------------------------------------------------------------------------------------
</TABLE>

(1)   Excludes  interest  income and  interest  expense  relating to  short-term
      interest-bearing deposits.


                                       30
<PAGE>

                           PART II. OTHER INFORMATION
                           --------------------------

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Annual  Meeting of  Stockholders  was held on May 24,  2000.  The  following
individuals,  comprising  all of the directors of CIT, were elected to the Board
of  Directors,  each with the  number of votes  shown,  to serve  until the next
annual meeting of  stockholders,  or until he is succeeded by another  qualified
director who has been elected:

            Directors                          For               Against
            ---------                          ---               -------

        Albert R. Gamper, Jr.              225,698,757            940,266
        Daniel P. Amos                     225,703,141            935,882
        Anthea Disney                      211,007,475         15,631,548
        William A. Farlinger               225,688,297            950,726
        Guy Hands                          225,689,351            949,672
        Hon. Thomas H. Kean                225,696,425            942,598
        Paul Morton                        225,681,655            957,368
        Takatsugu Murai                    225,692,745            946,278
        William M. O'Grady                 225,699,026            939,997
        Joseph A. Pollicino                225,699,991            939,032
        Paul N. Roth                       224,134,030          2,504,993
        Peter J. Tobin                     225,704,864            934,159
        Keiji Torii                        225,671,802            967,221
        Theodore V. Wells                  224,927,537          1,711,486
        Alan F. White                      225,701,721            937,302

In addition to electing the Board of Directors,  the stockholders  also ratified
the appointment of KPMG LLP as independent  accountants to examine the financial
statements of CIT and its  subsidiaries  for the year ending  December 31, 2000,
with 226,547,242 votes for, 53,884 votes against, and 37,897 votes abstaining.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibit 12 - Computation of Ratios of Earnings to Fixed Charges.
     (b) Exhibit 27 - Financial Data Schedule.
     (c) A Form 8-K  report  dated  May 3, 2000 was  filed  with the  Commission
         reporting  the  Company's  announcement  of  financial  results for the
         quarter  ended  March 31,  2000,  and the  declaration  of a  quarterly
         dividend for the quarter ended March 31, 2000.

         A Form 8-K was filed on June 14, 2000 to report the  retirement  of the
         Vice Chairman of the Company.


                                       31
<PAGE>

                                   SIGNATURES
                                   ----------

   Pursuant to the  requirements  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.

                                                     The CIT Group, Inc.
                                          --------------------------------------
                                                        (Registrant)

                                        BY             /s/ J.M. Leone
                                          --------------------------------------
                                                         J.M. Leone
                                                Executive Vice President and
                                                   Chief Financial Officer
                                               (duly authorized and principal
                                                     Accounting officer)

DATE: August 14, 2000


                                       32