================================================================================
                                  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 SEPTEMBER 30, 1999

                                       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 October 29, 1999: Class A Common Stock - 161,127,581 shares.

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

<PAGE>


                      THE CIT GROUP, INC. AND SUBSIDIARIES
                                   (UNAUDITED)


          TABLE OF CONTENTS                                                 PAGE

PART I.  FINANCIAL INFORMATION

  Item 1.   Condensed Financial Statements
            Consolidated Balance Sheets - September 30, 1999 and
              December 31, 1998.                                               2
            Consolidated Income Statements for the three and nine month
              periods ended September 30, 1999 and 1998.                       3
            Consolidated Statements of Changes in Stockholders' Equity for
              the nine month periods ended September 30, 1999 and 1998.        4
            Consolidated Statements of Cash Flows for the nine month
              periods ended September 30, 1999 and 1998.                       5
            Notes to Condensed Consolidated Financial Statements.            6-7

  Item 2.   Management's Discussion and Analysis of Financial
              Condition and Results of Operations
  and
  Item 3.   Quantitative and Qualitative Disclosures about
              Market Risk                                                   8-27

PART II.  OTHER INFORMATION

  Item 4.   Submission of Matters to a Vote of Security Holders               28

  Item 6.   Exhibits and Reports on Form 8-K                                  29


================================================================================
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.
================================================================================


                          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,
1998  Annual  Report  on Form  10-K and the  March  31,  1999 and June 30,  1999
quarterly  reports  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
                              (Amounts in Millions)

<TABLE>
<CAPTION>
                                                                                     September 30,     December 31,
                                                                                         1999              1998
                                                                                       ---------         ---------
                                                                                      (unaudited)
<S>                                                                                    <C>               <C>
Assets
Financing and leasing assets
Loans
  Commercial                                                                           $13,151.5         $11,415.5
  Consumer                                                                               4,068.8           4,266.9
Lease receivables                                                                        4,112.6           4,173.6
                                                                                       ---------         ---------
  Finance receivables                                                                   21,332.9          19,856.0
Reserve for credit losses                                                                 (283.8)           (263.7)
                                                                                       ---------         ---------
  Net finance receivables                                                               21,049.1          19,592.3
Operating lease equipment, net                                                           3,677.2           2,774.1
Consumer finance receivables held for sale                                                 737.8             987.4
Cash and cash equivalents                                                                  143.0              73.6
Other assets                                                                             1,132.3             875.7
                                                                                       ---------         ---------
 Total assets                                                                          $26,739.4         $24,303.1
                                                                                       =========         =========

Liabilities and Stockholders' Equity
Debt
Commercial paper                                                                       $ 5,472.6         $ 6,144.1
Variable rate senior notes                                                               5,758.1           4,275.0
Fixed rate senior notes                                                                  8,611.8           8,032.3
Subordinated fixed rate notes                                                              200.0             200.0
                                                                                       ---------         ---------
  Total debt                                                                            20,042.5          18,651.4
Credit balances of factoring clients                                                     1,971.9           1,302.1
Accrued liabilities and payables                                                           738.4             694.3
Deferred federal income taxes                                                              822.0             703.7
                                                                                       ---------         ---------
  Total liabilities                                                                     23,574.8          21,351.5
Company-obligated mandatorily redeemable
 preferred securities of subsidiary trust holding
 solely debentures of the Company                                                          250.0             250.0
Stockholders' equity
Class A Common Stock, par value $0.01 per share;
 Authorized: 700,000,000 shares.
 Issued: 163,172,966 shares in 1999 and 163,144,879
    shares in 1998.
 Outstanding: 161,147,581 shares in 1999 and
    162,176,949 shares in 1998.                                                              1.7               1.7
Paid-in capital                                                                            958.2             952.5
Retained earnings                                                                        2,009.3           1,772.8
Treasury stock at cost (2,025,385 shares in 1999 and 967,930
   shares in 1998; Class A Common Stock)                                                   (54.6)            (25.4)
                                                                                       ---------         ---------
Total stockholders' equity                                                               2,914.6           2,701.6
                                                                                       ---------         ---------
 Total liabilities and stockholders' equity                                            $26,739.4         $24,303.1
                                                                                       =========         =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       2

<PAGE>
                      THE CIT GROUP, INC. AND SUBSIDIARIES
                         CONSOLIDATED INCOME STATEMENTS
               (Amounts in Millions, except Net Income per Share)


<TABLE>
<CAPTION>
                                                                   For the Quarter               For the Nine Months
                                                                  Ended September 30,            Ended September 30,
                                                            -----------------------------    ------------------------------
                                                                 1999            1998           1999              1998
                                                                 ----            ----           ----              ----
                                                                     (unaudited)                      (unaudited)
<S>                                                          <C>              <C>            <C>              <C>
Finance income                                               $   583.9        $   510.6      $ 1,679.8         $ 1,481.4
Interest expense                                                 304.1            263.8          858.2             766.2
                                                             ---------        ---------      ---------         ---------
  Net finance income                                             279.8            246.8          821.6             715.2

Fees and other income                                             81.9             69.0          221.4             196.1
                                                             ---------        ---------      ---------         ---------
  Operating revenue                                              361.7            315.8        1,043.0             911.3
                                                             ---------        ---------      ---------         ---------

Salaries and general operating expenses                          115.1            105.3          337.1             311.0
Provision for credit losses                                       32.2             30.6           77.9              75.0
Depreciation on operating lease equipment                         61.6             42.7          176.9             121.4
Minority interest in subsidiary trust holding
 solely debentures of the Company                                  4.8              4.8           14.4              14.4
                                                             ---------        ---------      ---------         ---------
  Operating expenses                                             213.7            183.4          606.3             521.8
                                                             ---------        ---------      ---------         ---------

Income before provision for income taxes                         148.0            132.4          436.7             389.5
Provision for income taxes                                        51.1             46.3          151.6             138.0
                                                             ---------        ---------      ---------         ---------
Net income                                                   $    96.9        $    86.1      $   285.1          $  251.5
                                                             =========        =========      =========         =========

Net income per basic share                                       $0.60            $0.53          $1.77             $1.55
Net income per diluted share                                     $0.60            $0.53          $1.76             $1.54

</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       3

<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                              (Amounts in Millions)


                                               Nine Months Ended
                                                 September 30,
                                      ------------------------------------
                                           1999                 1998
                                      --------------       ---------------
                                                  (unaudited)

Balance, January 1                         $2,701.6              $2,432.9
Net income                                    285.1                 251.5
Dividends declared                            (48.6)                (32.6)
Treasury stock purchased                      (29.2)                (16.2)
Other                                           5.7                   4.0
                                           --------              --------
Balance, September 30                      $2,914.6              $2,639.6
                                           ========              ========


See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>
                      THE CIT GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Amounts in Millions)

<TABLE>
<CAPTION>
                                                                                           Nine Months Ended
                                                                                             September 30,
                                                                                    --------------------------------
                                                                                          1999            1998
                                                                                          ----            ----
                                                                                              (unaudited)
CASH FLOWS FROM OPERATIONS
<S>                                                                                       <C>            <C>
Net income                                                                            $     285.1    $     251.5
Adjustments to reconcile net income to net cash flows from operations:
 Provision for credit losses                                                                 77.9           75.0
 Depreciation and amortization                                                              202.1          140.5
 Provision for deferred federal income taxes                                                118.3           74.0
 Gains on asset and receivable sales                                                        (74.0)         (60.3)
 Increase in other assets                                                                   (67.0)         (37.3)
 Increase in accrued liabilities and payables                                                37.8           47.0
 Other                                                                                       28.6            9.3
                                                                                      -----------    -----------
  Net cash flows provided by operations                                                     608.8          499.7
                                                                                      -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
Loans extended                                                                          (25,908.5)     (25,877.1)
Collections on loans                                                                     24,404.6       23,627.9
Proceeds from asset and receivable sales                                                  2,078.1          984.4
Purchases of assets to be leased                                                         (1,221.6)        (645.5)
Net increase in short-term factoring receivables                                           (552.6)        (427.4)
Purchase of loan portfolios                                                                (516.6)        (477.9)
Purchases of investment securities                                                          (33.0)         (28.9)
Proceeds from sales of assets received in satisfaction of loans                              32.4           35.7
Other                                                                                       (13.2)         (24.8)
                                                                                      -----------    -----------
  Net cash flows used for investing activities                                           (1,730.4)      (2,833.6)
                                                                                      -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of variable and fixed rate notes                               6,199.5        4,384.2
Repayments of variable and fixed rate notes                                              (4,136.9)      (3,411.5)
Net (decrease) increase in commercial paper                                                (671.5)       1,519.5
Repayments of nonrecourse leveraged lease debt                                             (123.9)        (116.5)
Proceeds from nonrecourse leveraged lease debt                                                1.6           42.0
Cash dividends paid                                                                         (48.6)         (32.6)
Purchase of treasury stock                                                                  (29.2)         (16.2)
                                                                                      -----------    -----------
  Net cash flows provided by financing activities                                         1,191.0        2,368.9
                                                                                      -----------    -----------
Net increase in cash and cash equivalents                                                    69.4           35.0
Cash and cash equivalents, beginning of period                                               73.6          140.4
                                                                                      -----------    -----------
Cash and cash equivalents, end of period                                              $     143.0    $     175.4
                                                                                      ===========    ===========

Supplemental disclosures
Interest paid                                                                         $     790.9    $     726.1
Federal and state and local income taxes paid                                         $      47.1    $      57.9

</TABLE>


See accompanying notes to condensed consolidated financial statements.


                                       5

<PAGE>
                      THE CIT GROUP, INC. AND SUBSIDIARIES
              NOTES TO 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") with that of diluted EPS is presented below.


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                      For the Three Months Ended September 30,
                           ---------------------------------------------------------------------------------------------

                                                1999                                           1998
                           ---------------------------------------------    --------------------------------------------
                              Income           Shares       Per Share         Income           Shares        Per Share
                            (Numerator)     (Denominator)     Amount        (Numerator)     (Denominator)      Amount
                           -------------   ---------------  ----------     -------------   ---------------  -----------
                                                             Dollar Amounts in Millions
                                                             (except per share amounts)
<S>                                <C>       <C>                  <C>              <C>       <C>                  <C>
Basic EPS:
 Income available to
  common shareholders              $96.9     160,512,433          $0.60            $86.1     162,143,304          $0.53
                                                           =============                                    ============
Effect of Dilutive Securities:
 Restricted shares                   -           951,992                             -           934,401
 Stock options                       -               -                               -           226,620
                           --------------  --------------                   -------------  --------------
Diluted EPS                        $96.9     161,464,425          $0.60            $86.1     163,304,325          $0.53
                           ==============  ==============  =============    =============  ==============   ============

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

<CAPTION>

------------------------------------------------------------------------------------------------------------------------
                                                         For the Nine Months Ended September 30,
                           ---------------------------------------------------------------------------------------------
                                               1999                                             1998
                           ---------------------------------------------    --------------------------------------------
                              Income           Shares        Per Share        Income           Shares        Per Share
                            (Numerator)     (Denominator)     Amount        (Numerator)     (Denominator)      Amount
                           -------------   ---------------  ----------     -------------   ---------------  -----------
                                                               Dollar Amounts in Millions
                                                               (except per share amounts)
<S>                                <C>       <C>                  <C>              <C>       <C>                  <C>
Basic EPS:
 Income available to
  common shareholders             $285.1     160,850,093          $1.77           $251.5     162,197,469          $1.55
                                                           =============                                    ============
Effect of Dilutive Securities:
 Restricted shares                   -           958,748                             -           941,161
 Stock options                       -           189,000                             -           350,059
                           --------------  --------------                   -------------  --------------
Diluted EPS                       $285.1     161,997,841          $1.76           $251.5     163,488,689          $1.54
                           ==============  ==============  =============    =============  ==============   ============

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


                                       6
<PAGE>

Note 3 - Business Segment Information

The  following   table  presents   reportable   segment   information   and  the
reconciliation to the consolidated totals as of September 30, 1999 and 1998.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                            Equipment
                            Financing      Commercial                      Total        Corporate       Consolidated
                           and Leasing      Finance       Consumer        Segments      and Other          Total
                           -------------  ------------   -----------   --------------  ------------   ---------------
                                                           (Dollars in Millions)
<S>                             <C>           <C>           <C>            <C>               <C>           <C>
September 30, 1999
Operating revenue               $ 555.3       $ 301.9       $ 184.6        $ 1,041.8         $ 1.2         $ 1,043.0
Net income                        177.1         101.1          47.1            325.3         (40.2)            285.1
Total managed assets           14,326.0       6,615.3       7,556.6         28,497.9         115.8          28,613.7

September 30, 1998
Operating revenue                 452.9         255.2         168.1            876.2          35.1             911.3
Net income                        145.1          86.7          36.5            268.3         (16.8)            251.5
Total managed assets           12,587.1       5,357.5       7,392.0         25,336.6          87.3          25,423.9

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

Note 4 - Pending Acquisitions

We obtained the  authorizations  from the Federal Reserve Board and the Canadian
regulatory  authorities  for our  acquisition of all of the  outstanding  voting
shares of Newcourt Credit Group Inc. ("Newcourt").  Additionally, on October 26,
1999,  our  stockholders,   as  well  as  Newcourt's,  voted  in  favor  of  the
acquisition.  As a result,  the  acquisition is anticipated to close on or about
November 15, 1999.

On October 4, 1999,  we also  announced  our  intention to purchase the domestic
factoring  operations  of Heller  Finance Inc. The  transaction,  which has been
approved by the Federal Reserve Board, is scheduled to close prior to year end.


                                       7

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

OVERVIEW

Net income for the quarters  ended  September  30, 1999 and 1998  totaled  $96.9
million and $86.1  million,  respectively.  Nine month net income totaled $285.1
million and $251.5 million for 1999 and 1998, respectively. Earnings per diluted
share for the third quarter of 1999 increased 13.2% to $0.60 from $0.53 in 1998.
Nine month earnings per diluted share increased  14.3% to $1.76 from $1.54.  The
strong 1999  earnings were driven by double digit  revenue  growth,  solid asset
growth from the commercial  finance and equipment  segments,  consistent  credit
quality, and continued improvements in operating efficiency.

Return on equity for the third  quarter of 1999 was 13.5%,  improved  from 13.2%
for the same  period in 1998,  and was 13.6% for the first nine  months of 1999,
improved  from  13.2% for the same  period in 1998.  Return on  average  earning
assets ("AEA") for the third quarter of 1999 was 1.63% compared to 1.67% for the
third  quarter of 1998.  Return on AEA for the nine months ended  September  30,
1999 was 1.64% compared to 1.68% for the same period in 1998.

Managed assets,  comprised of financing and leasing assets and consumer  finance
receivables  previously securitized that we continue to manage, totaled a record
$28.6  billion at September 30, 1999, an increase of 12.5% from $25.4 billion at
September  30,  1998 and up 9.1%  from  $26.2  billion  at  December  31,  1998.
Financing and leasing assets  increased  13.6% to $25.9 billion at September 30,
1999 from $22.8  billion at September 30, 1998,  and  increased  9.1% from $23.7
billion at December 31, 1998.


                                       8
<PAGE>
NET FINANCE INCOME

A comparison of 1999 and 1998 net finance income is set forth below.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                        Three Months Ended
                                           -------------------------------------------------------------------------
                                                       September 30,                            Increase
                                           -------------------------------------     -------------------------------
                                                 1999                1998               Amount            Percent
                                           -----------------   -----------------     --------------    -------------
                                                                   (Dollar Amounts in Millions)
<S>                                                 <C>                 <C>                 <C>               <C>
Finance income                                    $   583.9           $   510.6           $   73.3            14.4%
Interest expense                                      304.1               263.8               40.3            15.3%
                                           -----------------   -----------------     --------------    -------------
Net finance income                                $   279.8           $   246.8           $   33.0            13.4%
                                           =================   =================     ==============    -------------

AEA                                               $23,818.5           $20,669.9           $3,148.6            15.2%
                                           =================   =================     ==============    =============

Net finance income as a % of AEA                   4.70%               4.78%
                                           =================   =================

--------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                         Nine Months Ended
                                           -------------------------------------------------------------------------
                                                       September 30,                            Increase
                                           -------------------------------------     -------------------------------
                                                 1999                1998               Amount            Percent
                                           -----------------   -----------------     --------------    -------------
                                                                   (Dollar Amounts in Millions)
<S>                                               <C>                 <C>                  <C>                <C>
Finance income                                    $ 1,679.8           $ 1,481.4           $  198.4            13.4%
Interest expense                                      858.2               766.2               92.0            12.0%
                                           -----------------   -----------------     --------------    -------------
Net finance income                                $   821.6           $   715.2           $  106.4            14.9%
                                           =================   =================     ==============    -------------

AEA                                               $23,213.9           $19,946.7           $3,267.2            16.4%
                                           =================   =================     ==============    =============

Net finance income as a % of AEA                   4.72%               4.78%
                                           =================   =================

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


Finance  income for the three months ended  September 30, 1999  increased  $73.3
million or 14.4% from the  comparable  1998 period.  Finance income for the nine
month period ended September 30, 1999 increased $198.4 million or 13.4% from the
same period in 1998. As a percentage of AEA, finance income (excluding  interest
income relating to short-term interest-bearing deposits) was 9.60% and 9.50% for
the quarter and nine months ended September 30, 1999, respectively,  as compared
to 9.74% and 9.76% for the respective corresponding periods in 1998. The decline
in yield was primarily due to lower prevailing  market interest rates on average
during 1999.


                                       9
<PAGE>

Interest  expense for the three months ended  September 30, 1999 increased $40.3
million or 15.3% from the comparable 1998 period,  and for the nine month period
ended  September 30, 1999 increased  $92.0 million or 12.0% from the same period
in 1998. 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 third quarter of 1999 decreased
to 4.90%  from  4.97% in the  comparable  1998  period,  and for the nine  month
periods  ended  September  30,  1999 and 1998,  decreased  to 4.78% from  4.98%,
respectively.  The decline from the  comparable  period of 1998  reflects  lower
market rates.

We seek to mitigate interest rate risk by matching the repricing characteristics
of our assets with our liabilities.  This portfolio risk management is, in part,
accomplished  through the use of interest rate swaps. A comparative  analysis of
the weighted average  principal  outstanding and interest rates paid on our debt
for the three and nine month periods ended  September 30, 1999 and 1998,  before
and after  giving  effect to  interest  rate  swaps,  is shown in the  following
tables.

--------------------------------------------------------------------------------
                                         Three Months Ended September 30, 1999
                                     -------------------------------------------
                                        Before Swaps            After Swaps
                                     ------------------    ---------------------
                                              (Dollar Amounts in Millions)
Commercial paper and
  variable rate senior notes         $  11,413.2   5.33%   $   8,747.6     5.33%
Fixed rate senior and
  subordinated notes                     8,930.5   6.20%      11,596.1     6.25%
                                     -----------           -----------
Composite interest rate paid         $  20,343.7   5.71%   $  20,343.7     5.86%
                                     ===========           ===========


                                         Three Months Ended September 30, 1998
                                     -------------------------------------------
                                        Before Swaps            After Swaps
                                     ------------------    ---------------------
                                              (Dollar Amounts in Millions)
Commercial paper and
  variable rate senior notes         $   9,952.1   5.61%   $   7,322.7     5.55%
Fixed rate senior and
  subordinated notes                     7,074.4   6.29%       9,703.8     6.38%
                                     -----------           -----------
Composite interest rate paid         $  17,026.5   5.89%   $  17,026.5     6.02%
                                     ===========           ===========

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


                                       10
<PAGE>

--------------------------------------------------------------------------------
                                         Nine Months Ended September 30, 1999
                                     -------------------------------------------
                                        Before Swaps           After Swaps
                                     ------------------    ---------------------
                                              (Dollar Amounts in Millions)
Commercial paper and
  variable rate senior notes         $  10,984.8   5.09%   $   8,521.4     5.08%
Fixed rate senior and
  subordinated notes                     8,758.0   6.19%      11,221.4     6.26%
                                     -----------           -----------
Composite interest rate paid         $  19,742.8   5.58%   $  19,742.8     5.75%
                                     ===========           ===========


                                         Nine Months Ended September 30, 1998
                                     -------------------------------------------
                                        Before Swaps           After Swaps
                                     ------------------    ---------------------
                                              (Dollar Amounts in Millions)
Commercial paper and
  variable rate senior notes         $   9,343.8   5.62%   $   6,756.0     5.57%
Fixed rate senior and
  subordinated notes                     7,062.7   6.35%       9,650.5     6.43%
                                     -----------           -----------
Composite interest rate paid         $  16,406.5   5.93%   $  16,406.5     6.08%
                                     ===========           ===========

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

Our interest rate swaps principally convert floating rate debt to fixed interest
rates.  We do not enter into  derivative  financial  instruments  for trading or
speculative  purposes.  The weighted average composite interest rate after swaps
increased from the weighted average composite interest rate before swaps in each
period,  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
For the three months ended  September  30, 1999,  fees and other income  totaled
$81.9 million,  compared to $69.0 million for the third quarter of 1998. For the
nine months ended  September  30, 1999 and 1998,  fees and other income  totaled
$221.4 million and $196.1 million,  respectively.  Increased lending fees in our
commercial finance and equipment financing  businesses,  strong commissions from
the factoring business bolstered by an acquisition, and


                                       11
<PAGE>

gains on sales of leasing  equipment and certain  consumer  finance  receivables
were  partially  offset  by  lower  gains on  venture  capital  investments  and
securitizations. The following table sets forth the components of fees and other
income.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                          Three Months Ended                Nine Months Ended
                                                             September 30,                    September 30,
                                                      ----------------------------     ----------------------------
                                                         1999            1998              1999            1998
                                                      ------------    ------------     ------------    ------------
                                                                     (Dollar Amounts in Millions)

<S>                                                        <C>             <C>              <C>             <C>
Factoring commissions                                      $ 31.1          $ 24.8          $  84.1         $  70.4
Fees and other income                                        36.2            24.8             87.5            69.0
Gains on sales of leasing equipment                          14.6            11.5             44.5            35.2
Gains on securitizations                                        -             7.3              5.3            12.5
Gains on sales of venture capital investments                   -             0.6                -             9.0
                                                      ------------    ------------     ------------    ------------
                                                           $ 81.9          $ 69.0          $ 221.4         $ 196.1
                                                      ============    ============     ============    ============

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

SALARIES AND GENERAL OPERATING EXPENSES

Salaries  and general  operating  expenses  increased by $9.8 million or 9.3% to
$115.1  million  in the  third  quarter  of  1999  from  $105.3  million  in the
comparable  1998 period.  For the nine month period  ended  September  30, 1999,
salaries  and general  operating  expenses  increased  $26.1  million or 8.4% to
$337.1  million from $311.0 million for the same period in 1998. The increase in
expenses  reflects a factoring  acquisition,  product expansion in the equipment
financing and leasing  businesses,  certain  incremental  costs  relating to the
restructuring  of our sales  finance  business,  and normal  expense  increases,
partially offset by productivity gains in the consumer segment.


                                       12
<PAGE>

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                 Nine Months Ended
                                                         September 30,                     September 30,
                                                  ----------------------------      -----------------------------
                                                     1999            1998               1999            1998
                                                  ------------    ------------      -------------   -------------

<S>                                                     <C>             <C>                <C>             <C>
Efficiency ratio                                        39.0%           39.2%              39.6%           40.1%

Salaries and general operating
   expenses as a percentage of AMA                      1.72%           1.82%              1.73%           1.86%

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

The  improvement in the ratios  reflects the success of continuing  productivity
initiatives  and our  ability to  leverage  our  existing  operating  structure,
particularly in our consumer and factoring businesses.

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 nonperforming assets. The
reserve  increased  by  $20.1  million  to  $283.8  million  (1.33%  of  finance
receivables)  at September 30, 1999 from $263.7 million  (1.33%) at December 31,
1998 principally as a result of portfolio  growth. A measure of reserve adequacy
and strength  used by us and in our  industry is the ratio of the balance  sheet
reserve  for credit  losses to trailing  twelve-month  net credit  losses.  This
ratio,  3.21 times at September 30, 1999,  was  relatively  unchanged  from 3.35
times at December 31, 1998. The relationship of the reserve for credit losses to
nonaccrual  finance  receivables  was 123.1% at September  30, 1999  compared to
124.7% at December 31, 1998.


                                       13
<PAGE>

The provision for credit losses for the third quarter of 1999 was $32.2 million,
up from $30.6  million in the third  quarter of 1998 and the nine month total of
$77.9 million was up from $75.0 million for the nine months ended  September 30,
1998.

For the quarter ended  September 30, 1999,  net credit losses were $25.3 million
(0.48% of average finance  receivables) as compared to $21.6 million (0.46%) for
the same period last year. Net credit losses for the nine months ended September
30, 1999 were $67.5 million  (0.44%)  compared to $58.0 million  (0.42%) for the
same period of 1998.

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

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                       Three Months Ended                   Nine Months Ended
                                                         September 30,                        September 30,
                                                  -----------------------------        ----------------------------
                                                      1999            1998                 1999            1998
                                                  -------------   -------------        ------------    ------------

<S>                                                     <C>             <C>                 <C>             <C>
Equipment Financing and Leasing                         0.23 %          0.21 %              0.16 %          0.25 %
Commercial Finance                                      0.44 %          0.47 %              0.42 %          0.21 %
                                                  -------------   -------------        ------------    ------------
    Total Commercial Segments                           0.31 %          0.30 %              0.25 %          0.24 %
Consumer Segment                                        1.17 %          1.08 %              1.16 %          1.12 %
                                                  -------------   -------------        ------------    ------------
    Total                                               0.48 %          0.46 %              0.44 %          0.42 %
                                                  =============   =============        ============    ============

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

For the nine months ended  September 30, 1999,  Equipment  Financing and Leasing
net credit losses  declined on continued good credit  quality.  The year to date
increase in  Commercial  Finance net credit  losses was  primarily  due to large
recoveries in 1998.

As a percentage of average  consumer managed finance  receivables,  consumer net
credit  losses were 1.01% during the third quarter of 1999 compared to 0.87% for
the same period in 1998,


                                       14
<PAGE>

and for the nine months ended September 30, 1999 and 1998, were 1.01% and 0.89%,
respectively.

PAST DUE AND NONPERFORMING ASSETS

The following table sets forth certain information concerning past due and total
nonperforming  assets (and the related  percentages of finance  receivables)  at
September 30, 1999 and December 31, 1998.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                         At September 30, 1999             At December 31, 1998
                                                      -----------------------------     ---------------------------
                                                                       (Dollar Amounts in Millions)
<S>                                                        <C>               <C>             <C>             <C>
Finance receivables, past due 60 days or more:

Equipment Financing and Leasing                            $ 163.8           1.54%         $  149.9          1.41%
Commercial Finance                                            51.0           0.77%             32.1          0.64%
                                                      -------------   -------------     ------------   ------------
    Total Commercial Segments                                214.8           1.24%            182.0          1.17%
Consumer Segment                                             170.5           4.19%            166.0          3.89%
                                                      -------------   -------------     ------------   ------------
    Total                                                  $ 385.3           1.81%         $  348.0          1.75%
                                                      =============   =============     ============   ============


Total nonperforming assets:

Equipment Financing and Leasing                            $ 120.1           1.13%         $  135.2          1.27%
Commercial Finance                                            23.9           0.36%             14.5          0.29%
                                                      -------------   -------------     ------------   ------------
    Total Commercial Segments                                144.0           0.83%            149.7          0.96%
Consumer Segment                                             144.1           3.54%            129.0          3.02%
                                                      -------------   -------------     ------------   ------------
    Total                                                  $ 288.1           1.35%         $  278.7          1.40%
                                                      =============   =============     ============   ============

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

Nonperforming  assets reflect both finance  receivables on nonaccrual status and
assets received in satisfaction of loans.

From time to time,  financial or operational  difficulties  may adversely affect
future payments  relating to certain  operating lease equipment.  Such operating
lease  equipment  is not  included in the totals for past due and  nonperforming
assets.  At September  30, 1999,  operations  at an oil

                                       15
<PAGE>


refinery were subject to such difficulties. The aggregate carrying value of this
asset was approximately $20.3 million. We do not believe these difficulties will
have a material adverse effect on our consolidated financial position or results
of operations.

OPERATING LEASE EQUIPMENT

The operating lease equipment  portfolio was $3.7 billion at September 30, 1999,
up 32.6% from  December 31, 1998 and up 53.4% from  September  30, 1998,  driven
primarily  by growth  in rail  transport,  commercial  aircraft  equipment,  and
construction  equipment.  Depreciation  for the quarter ended September 30, 1999
was $61.6  million,  up from $42.7 million for the same period in 1998,  and for
the nine months ended September 30, 1999,  depreciation  was $176.9 million,  up
from $121.4 million in the same period in 1998 due to growth in the portfolio.

INCOME TAXES

The  effective  income  tax rates for the third  quarters  of 1999 and 1998 were
34.5% and 35.0%,  and for the nine month  periods  ended  September 30, 1999 and
1998, were 34.7% and 35.4%, respectively. The decrease in the 1999 effective tax
rate was primarily the result of lower state and local income taxes.


                                       16
<PAGE>

FINANCING AND LEASING ASSETS

Managed  assets grew $2.4 billion  (9.1%) to $28.6 billion during the first nine
months of 1999, and financing and leasing  assets  increased $2.2 billion (9.1%)
to $25.9 billion, as presented in the following table.


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                     At September 30,  At December 31,            Change
                                                         1999               1998           Amount        Percent
                                                    --------------     -------------    -------------   ----------
                                                                      (Dollar Amounts in Millions)
<S>                                                     <C>               <C>                <C>             <C>
Equipment Financing:
  Finance receivables                                   $ 8,745.9         $ 8,497.6          $ 248.3          2.9%
  Operating lease equipment, net                            849.9             765.1             84.8         11.1
                                                    --------------     -------------    -------------   ----------
    Total                                                 9,595.8           9,262.7            333.1          3.6
                                                    --------------     -------------    -------------   ----------
Capital Finance:
  Finance receivables                                     1,598.3           1,655.4            (57.1)        (3.4)
  Operating lease equipment, net (1)                      2,807.0           1,982.0            825.0         41.6
                                                    --------------     -------------    -------------   ----------
                                                          4,405.3           3,637.4            767.9         21.1
  Liquidating portfolio(1) (2)                              324.9             466.9           (142.0)       (30.4)
                                                    --------------     -------------    -------------   ----------
    Total                                                 4,730.2           4,104.3            625.9         15.2
                                                    --------------     -------------    -------------   ----------

  Total Equipment Financing and Leasing                  14,326.0          13,367.0            959.0          7.2
                                                    --------------     -------------    -------------   ----------

Commercial Services                                       3,714.8           2,481.8          1,233.0         49.7
Business Credit                                           1,726.9           1,477.9            249.0         16.8
Credit Finance                                            1,173.6           1,036.5            137.1         13.2
                                                    --------------     -------------    -------------   ----------
  Total Commercial Finance                                6,615.3           4,996.2          1,619.1         32.4
                                                    --------------     -------------    -------------   ----------

  Total Commercial Segments                              20,941.3          18,363.2          2,578.1         14.0
                                                    --------------     -------------    -------------   ----------

Other - Equity Investments                                  115.8              81.9             33.9         41.4
                                                    --------------     -------------    -------------   ----------

Consumer Finance                                          2,229.3           2,244.4            (15.1)        (0.7)
Sales Financing                                           2,577.3           3,009.9           (432.6)       (14.4)
                                                    --------------     -------------    -------------   ----------
  Total Consumer Segment                                  4,806.6           5,254.3           (447.7)        (8.5)
                                                    --------------     -------------    -------------   ----------

  Total Financing and Leasing Assets                     25,863.7          23,699.4          2,164.3          9.1
                                                    --------------     -------------    -------------   ----------
Finance receivables previously securitized:
  Consumer Finance                                          464.0             607.6           (143.6)       (23.6)
  Sales Financing                                         2,286.0           1,909.3            376.7         19.7
                                                    --------------     -------------    -------------   ----------
      Total                                               2,750.0           2,516.9            233.1          9.3
                                                    --------------     -------------    -------------   ----------

     Total Managed Assets - Consumer Segment              7,556.6           7,771.2           (214.6)        (2.8)
                                                    --------------     -------------    -------------   ----------

    Total Managed Assets                               $ 28,613.7        $ 26,216.3        $ 2,397.4          9.1%
                                                    ==============     =============    =============   ==========

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

(1)  Operating  lease  equipment,  net, of $20.3  million and $27.0  million are
     included in the  liquidating  portfolios at September 30, 1999 and December
     31, 1998, respectively.

(2)  Consists primarily of oceangoing maritime and project finance.


                                       17
<PAGE>

Strong  originations  in rail  transport,  commercial  aircraft  equipment,  and
construction  equipment  resulted in 1999 growth in the Equipment  Financing and
Leasing operating lease portfolios. The growth in the Commercial Finance segment
resulted from solid 1999 new business  generation,  reduced  liquidations  and a
factoring acquisition.

Consumer  managed  assets  decreased to $7.6 billion at September  30, 1999 from
$7.8  billion at December  31,  1998,  due to sales of certain  lower  returning
receivables  during the third  quarter  as a result of  ongoing  risk and return
management strategies.

Financing and Leasing Assets Composition

Our ten largest  financing and leasing  asset  accounts at September 30, 1999 in
the aggregate  accounted for 4.9% of the 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 September 30, 1999              At December 31, 1998
                                                 -------------------------------    -------------------------------
                                                      Amount           Percent            Amount          Percent
                                                 ----------------    -----------    -----------------   -----------
                                                                   (Dollar Amounts in Millions)
<S>                                                    <C>                <C>              <C>               <C>
United States
    West                                               $ 5,846.9           22.6%           $ 5,583.2         23.6%
    Northeast                                            5,630.5           21.8              5,143.9         21.7
    Midwest                                              5,465.6           21.1              4,895.3         20.7
    Southeast                                            3,735.9           14.4              3,492.3         14.7
    Southwest                                            3,308.0           12.8              2,993.3         12.6
Foreign (principally commercial aircraft)                1,876.8            7.3              1,591.4          6.7
                                                 ----------------    -----------    -----------------   -----------
    Total                                              $25,863.7          100.0%           $23,699.4        100.0%
                                                 ================    ===========    =================   ===========

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

                                       18
<PAGE>

Our managed asset geographic  diversity does not differ  significantly  from our
owned asset geographic diversity.  Additionally, our financing and leasing asset
portfolio is diversified by state. At September 30, 1999,  state  concentrations
in excess of 5.0% of financing  and leasing  assets were  limited to  California
(12.1%), Texas (8.9%), and New York (8.1%).

Industry Composition

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

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                               At September 30, 1999                    At December 31, 1998
                                         ----------------------------------       ----------------------------------
                                                Amount           Percent              Amount              Percent
                                         -----------------    -------------       ----------------      ------------
                                                                 (Dollar Amounts in Millions)
<S>                                             <C>                  <C>                <C>                   <C>
Manufacturing(1)                                $ 5,752.8            22.2%              $ 5,117.0             21.6%
Retail                                            2,822.9            10.9                 1,882.1              7.9
Commercial airlines(2)                            2,596.7            10.0                 2,325.4              9.8
Construction equipment                            2,348.5             9.1                 1,947.4              8.2
Home mortgage(3)                                  2,229.3             8.6                 2,244.4              9.5
Transportation(4)                                 2,089.9             8.1                 1,777.6              7.5
Manufactured housing(5)                           1,664.8             6.4                 1,417.5              6.0
Other(6)(7)                                       6,358.8            24.7                 6,988.0             29.5
                                         -----------------    -------------       ----------------      ------------
     Total                                      $25,863.7           100.0%              $23,699.4            100.0%
                                         =================    =============       ================      ============

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

(1) Includes  various  categories of  manufacturers,  including  steel and metal
    products,  textiles  and  apparel,  printing  and paper  products  and other
    industries.  No individual  category is greater than 4.1% of total financing
    and leasing assets.

(2) Commercial  airlines were 9.1% of managed  assets at September 30, 1999. See
    "--Concentrations"   below  for  a  discussion  of  the  commercial  airline
    portfolio.

(3) On a managed asset basis,  home mortgage  outstandings  were $2.7 billion or
    9.4% of managed  assets at September  30, 1999 as compared with $2.9 billion
    or 10.9% at December 31, 1998.

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

(5) On a  managed  asset  basis,  manufactured  housing  outstandings  were $1.9
    billion or 6.6% of managed  assets at September 30, 1999 as compared to $1.7
    billion or 6.5% at December 31, 1998.

(6) Includes  various  categories,  none of which is greater  than 4.1% of total
    financing and leasing assets.

(7) On a managed asset basis,  recreation vehicle outstandings were $1.9 billion
    or 6.6% of managed  assets at September 30, 1999 as compared to $1.9 billion
    or 7.2% at December 31, 1998.  On a managed asset basis,  recreational  boat
    outstandings  were $0.8 billion or 3.0% of managed  assets at September  30,
    1999 as compared to $1.0  billion or 4.0% of managed  assets at December 31,
    1998.


                                       19
<PAGE>

Concentrations

Commercial Airline Industry

Commercial  airline  financing and leasing assets totaled $2.6 billion (10.0% of
total  financing and leasing assets) at September 30, 1999, up from $2.3 billion
(9.8%) at December  31,  1998.  These  financing  and leasing  assets  relate to
commercial  aircraft and ancillary  equipment.  Over the past few years, we have
been growing this portfolio,  and more recently we decided to expand our product
offerings to include newly  manufactured  commercial  aircraft.  During 1999, we
entered into  agreements  with both Airbus  Industries and the Boeing Company to
purchase a total of 40  aircraft,  with  options to  acquire  additional  units.
Deliveries  of these new aircraft  are  scheduled to take place over a five year
period starting in the fourth quarter of 2000.

The following table presents information about the commercial airline portfolio.
See also "Operating Lease Equipment".

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                     At September 30, 1999               At December 31, 1998
                                                  -----------------------------      ------------------------------
                                                                    (Dollar Amounts in Millions)
<S>                                                            <C>                                <C>
Finance Receivables
      Amount outstanding(1)                                    $1,209.3                           $1,230.7
      Number of obligors                                           54                                 54
Operating Lease Equipment, net
      Net carrying value                                       $1,387.4                           $1,094.7
      Number of obligors                                           36                                 33

Total                                                          $2,596.7                           $2,325.4
Number of obligors(2)                                              73                                 65
Number of aircraft(3)                                             193                                206

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

(1)   Includes  accrued rents on operating leases that are classified as finance
      receivables in the Consolidated Balance Sheets.

(2)   Certain obligors are obligors under both finance  receivable and operating
      lease transactions.

(3)   Regulations established by the Federal Aviation Administration (the "FAA")
      limit the  maximum  permitted  noise an  aircraft  may  make.  A Stage III
      aircraft meets a more restrictive  noise level requirement than a Stage II
      aircraft.  The FAA has  issued  rules  that  phase out the use of Stage II
      aircraft in the United States by the year 2000.  Similar  restrictions  in
      Europe  phase  out the use of  Stage II  aircraft  by the  year  2001.  At
      September  30,  1999,  the  portfolio  consisted  of Stage III aircraft of
      $2,544.7  million  (98.0%) and Stage II aircraft of $34.1 million  (1.3%),
      versus  Stage  III  aircraft  of  $2,246.0  million  (96.6%)  and Stage II
      aircraft of $55.9 million (2.4%) at year-end 1998.


                                       20
<PAGE>

We continue to reduce our Stage II commercial aircraft exposure and increase our
Stage III  aircraft  exposure  because  FAA rules  phase out the use of Stage II
aircraft by the year 2000 in the United States.  At September 30, 1999, Stage II
aircraft  declined to 1.3% of our commercial  aircraft  portfolio,  about 75% of
which represents  collateral for full pay out debt obligations and the remaining
represents aircraft on operating leases.

Foreign Outstandings

Our foreign  exposures are limited  mainly to the commercial  airline  industry.
Financing and leasing assets to foreign obligors are U.S. dollar denominated and
totaled  $1.9  billion at  September  30, 1999 and $1.6  billion at December 31,
1998.  The largest  exposures at September 30, 1999 were to obligors in England,
$150.5 million (0.58% of financing and leasing assets),  Canada,  $145.7 million
(0.56%),  Belgium,  $138.7 million (0.54%),  France, $134.0 million (0.52%), and
Spain, $110.0 million (0.42%). The remaining foreign exposure was geographically
dispersed, with no other individual country exposure greater than $110 million.

Highly Leveraged Transactions ("HLTs")

We use the following criteria to classify a buyout financing or recapitalization
which  equals or  exceeds  $20  million as an HLT:

     o The  transaction at least doubles the borrower's  liabilities and results
       in a leverage ratio (as defined) higher than 50%, or

     o The transaction results in a leverage ratio higher than 75%, or

     o The transaction is designated as an HLT by a syndication agent.

HLTs that we originated  and in which we  participated  totaled  $678.6  million
(2.6% of  financing  and leasing  assets) at  September  30, 1999 as compared to
$561.1  million  (2.4%) at December


                                       21
<PAGE>

31, 1998. The increase in HLT outstandings  during the first nine months of 1999
was due to new  originations.  Our HLT  outstandings  are  generally  secured by
collateral,  as  distinguished  from HLTs that rely primarily on cash flows from
operations.  Unfunded  commitments to lend in secured HLT situations were $394.0
million at September 30, 1999, compared with $287.6 million at year-end 1998.

LIQUIDITY

We manage  liquidity  risk by monitoring  the relative  maturities of assets and
liabilities  and by borrowing  funds,  primarily  in the U.S.  money and capital
markets.  We use such cash to fund asset growth  (including the bulk purchase of
finance receivables and the acquisition of other finance-related businesses) and
to meet debt  obligations and other  commitments on a timely and  cost-effective
basis.  The  primary  sources  of  funding  are  commercial  paper   borrowings,
medium-term notes, and other term debt securities,  supplemented by asset-backed
securitizations.

During the first nine months of 1999,  commercial paper outstanding decreased to
$5.5  billion at  September  30, 1999 from $6.1  billion at December  31,  1998.
During this period,  we issued $4.4 billion of variable  rate term debt and $1.8
billion  of  fixed  rate  term  debt.  The  decrease  in  commercial  paper  and
corresponding  increase in term debt reflects,  in part, our strategy to prefund
asset growth in light of Year 2000.  Repayments of debt totaled $4.1 billion for
the first  nine  months  of 1999.  At  September  30,  1999,  $18.6  billion  of
registered,  but  unissued,  debt  securities  remained  available  under  shelf
registration statements, including $2.0 billion of European Medium-Term Notes.


                                       22
<PAGE>

At September  30,  1999,  commercial  paper  borrowings  were  supported by $5.5
billion of committed  revolving  credit-line  facilities,  representing 99.8% of
operating  commercial  paper  outstanding  (commercial  paper  outstanding  less
short-term interest-bearing deposits).

As  part  of  our  continuing  program  of  accessing  the  public  and  private
asset-backed  securitization  markets as an additional  liquidity  source,  $1.0
billion of recreation  vehicle and  recreational  boat finance  receivables were
securitized  during the first nine months of 1999. At September  30, 1999,  $2.1
billion of  registered,  but unissued,  securities  were  available  under shelf
registration statements relating to our asset-backed securitization program.

CAPITALIZATION

The following table presents information regarding our capital structure.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                                                           At September 30,          At December 31,
                                                                                 1999                      1998
                                                                           ----------------         -----------------
                                                                                 (Dollar Amounts in Millions)
<S>                                                                              <C>                       <C>
Commercial paper                                                                 $ 5,472.6                 $ 6,144.1
Term debt                                                                         14,569.9                  12,507.3
                                                                           ----------------         -----------------
   Total debt                                                                     20,042.5                  18,651.4
Company-obligated mandatorily redeemable preferred
 securities of subsidiary trust holding solely debentures
 of the Company                                                                      250.0                     250.0
Stockholders' equity                                                               2,914.6                   2,701.6
                                                                           ----------------         -----------------
   Total capitalization                                                          $23,207.1                 $21,603.0
                                                                           ================         =================
Total debt to stockholders' equity and Company-
 obligated mandatorily redeemable preferred securities of
 subsidiary trust holding solely debentures of the Company                           6.33x                     6.32x
Total debt and Company-obligated mandatorily
 redeemable preferred securities of subsidiary trust holding
 solely debentures of the Company to stockholders' equity                            6.95x                     7.00x

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


                                       23
<PAGE>

We believe we are well capitalized and that our capital structure is adequate to
support current operations and anticipated growth.

YEAR 2000 COMPLIANCE

Institutions around the world are reviewing and modifying their computer systems
to ensure they are Year 2000  compliant.  The issue,  in general terms,  is that
many  existing  computer  systems,  both  information   technology  systems  and
non-information  technology systems, contain date-based functions which use only
two digits to  identify a year in the date  field with the  assumption  that the
first two digits of the year are always "19". Consequently,  on January 1, 2000,
systems that are not Year 2000 compliant may read the year as 1900. Systems that
calculate, compare or sort using the incorrect date may malfunction.

We  continue  to address  the Year 2000 issue as it relates to our  systems  and
business.  We have developed a comprehensive  Year 2000 project to remediate our
information  technology  ("IT")  systems and to address  Year 2000 issues in our
non-IT  systems.  The process of remediation  includes the following  phases:

     o Planning
     o Assessing
     o Designing (as necessary)
     o Programming (as necessary)
     o Testing and validation

We have categorized our IT systems as high,  medium or low priority with respect
to our ability to conduct  business.  As of September 30, 1999, we completed the
entire Year 2000 process for


                                       24
<PAGE>

all of our  high  and  medium  priority  IT  systems  and  for 99% of all our IT
systems. We will complete the Year 2000 process for all of our IT systems during
the fourth quarter of 1999.

A  majority  of the  software  used in our IT  systems  is  provided  by outside
vendors.  As of September  30, 1999,  all  vendor-provided  software or software
upgrades for our high and medium  priority  systems has been  designated  by the
software vendors as Year 2000 compliant.

We formulated a contingency plan for business  continuation in the event of Year
2000 systems failures. This contingency plan is based upon our existing disaster
recovery and business  continuity plans with  modifications for Year 2000 risks.
We  completed  our Year 2000  contingency  plan by  August  31,  1999,  and have
substantially tested these contingency plans as of September 30, 1999.

Our non-IT systems used to conduct business at our facilities  consist primarily
of office equipment (other than computer and communications equipment) and other
equipment  at our  leased  office  facilities.  We have  inventoried  our non-IT
systems and have sent Year 2000  questionnaires  to our office equipment vendors
and landlords to determine the status of their Year 2000 readiness.

Since 1997, we have been actively  communicating  with third parties  concerning
the status of their Year 2000 readiness by, among other things,  sending written
Year 2000 inquiries. These third parties include our borrowers, obligors, banks,
investment banks, investors, vendors, manufacturers,  landlords and suppliers of
telecommunication  services  and  other  utilities.  As part of the  process  of
evaluating our options and attempting to mitigate third party risks, we continue


                                       25
<PAGE>

to collect  and analyze  information  from third  parties.  It is  difficult  to
predict the effect of any such third party non-readiness on our business.

Significant Year 2000 failures in our systems or in the systems of third parties
(or third parties upon whom they depend) could have a material adverse effect on
our  financial  condition  and  results  of  operations.  We  believe  that  our
reasonably  likely worst case Year 2000  scenario is (i) a material  increase in
our credit  losses due to Year 2000  problems for our borrowers and obligors and
(ii) disruption in financial  markets causing liquidity stress to us. The amount
of  these  potential  credit  losses  or the  degree  of  disruption  cannot  be
determined at this time.

The total  cost of our Year 2000  project is  expected  to be  approximately  $7
million, of which approximately $6.4 million has been incurred through September
30, 1999.  This amount includes the costs of additional  hardware,  software and
technology  consultants,  as  well  as the  cost  of our  systems  professionals
dedicated to achieving Year 2000 compliance for IT systems. We have included the
cost of the Year 2000 project in our annual budgets for information  technology.
We have postponed some non-Year 2000 IT expenditures and initiatives until after
2000 in order to concentrate  resources on the Year 2000 issue. We do not expect
that this will have a material  adverse  effect on our  financial  condition and
results of operations.

All Year 2000 information provided herein is a "Year 2000 Readiness  Disclosure"
as defined in the Year 2000  Information  and  Readiness  Disclosure  Act and is
subject to the terms thereof. This Year 2000 information is provided pursuant to
securities  law  requirements  and it may not be  taken  as a form of  covenant,
warranty, representation or guarantee of any kind.


                                       26
<PAGE>

STATISTICAL DATA

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

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                                       Nine Months Ending
                                                                                          September 30,
                                                                            --------------------------------------
                                                                                1999                    1998
                                                                            --------------          --------------
<S>                                                                                <C>                     <C>
Finance income(1)                                                                    9.50%                   9.76%
Interest expense(1)                                                                  4.78                    4.98
                                                                            --------------          --------------
  Net finance income                                                                 4.72                    4.78
Fees and other income                                                                1.27                    1.31
                                                                            --------------          --------------

  Operating revenue                                                                  5.99                    6.09
                                                                            --------------          --------------

Salaries and general operating expenses                                              1.94                    2.08
Provision for credit losses                                                          0.44                    0.50
Depreciation on operating lease equipment                                            1.02                    0.81
Minority interest in subsidiary trust holding solely
 debentures of the Company                                                           0.08                    0.10
                                                                            --------------          --------------

  Operating expenses                                                                 3.48                    3.49
                                                                            --------------          --------------

Income before provision for income taxes                                             2.51                    2.60
Provision for income taxes                                                           0.87                    0.92
                                                                            --------------          --------------

  Net income                                                                         1.64%                   1.68%
                                                                            ==============          ==============
Average earning assets (in millions)                                            $23,213.9               $19,946.7
                                                                            ==============          ==============

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

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


                                       27
<PAGE>

                           PART II. OTHER INFORMATION

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

The Annual Meeting of Stockholders  was held on September 8, 1999. 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
---------                          ---            -------

Hisao Kobayashi               148,183,447        1,382,248

Albert R. Gamper, Jr.         148,184,866        1,380,829

Daniel P. Amos                149,216,410          349,285

Anthea Disney                 147,549,048        2,016,647

Takasuke Kaneko               132,019,477       17,546,218

William M. O'Grady            148,184,539        1,381,156

Joseph A. Pollicino           148,184,606        1,381,089

Paul N. Roth                  148,185,340        1,380,355

Peter J. Tobin                149,217,347          348,348

Tohru Tonoike                 148,181,268        1,384,427

Keiji Torii                   146,532,760        3,032,935

Alan R. White                 149,218,214          347,481

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, 1999,
with  149,502,414  votes for, 25,776 votes against,  and 37,505 votes abstaining
and approved  CIT's Employee  Stock  Purchase Plan with  141,578,856  votes for,
7,273,004 votes against, 50,017 votes abstaining and 663,818 broker non-votes.


                                       28
<PAGE>

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 July 30, 1999 was filed with the SEC reporting CIT's
    declaration of a dividend for the quarter ended June 30, 1999.

    A Form 8-K  report  dated  August 5, 1999 was filed  with the SEC  reporting
    CIT's  announcement of an amended and restated agreement to acquire Newcourt
    Credit Group Inc. and additionally  announcing the financial results for the
    Quarter ended June 30, 1999.

    A Form 8-K report  dated  August 18, 1999 was filed with the SEC  containing
    the pro forma financial statements prepared by CIT and Newcourt Credit Group
    Inc.

    A Form 8-K report dated September 22, 1999 was filed with the SEC containing
    the unaudited  consolidated  financial  statements of Newcourt  Credit Group
    Inc.  for the six months  ended June 30, 1999 and the  audited  consolidated
    financial  statements  of Newcourt  for each of the two year  periods  ended
    December 31, 1998 and 1997.


                                       29
<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: November 9, 1999


                                       30