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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

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

                  For the quarterly period ended JUNE 30, 1998
                                       OR
              ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

              For the transition period from ________ to __________

                             Commission File Number
                                     1-1861

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

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

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

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
      
                                    Yes   X    No 
                                         ---      ---
                                                                             
Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common  stock,  as of July 31, 1998:  Class A common stock - 37,166,070  shares;
Class B common stock - 126,000,000 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 - June 30, 1998 and
            December 31, 1997.                                                 2
          Consolidated Income Statements for the three and six month
            periods ended June 30, 1998 and 1997.                              3
          Consolidated Statements of Changes in Stockholders' Equity for
            the six month periods ended June 30, 1998 and 1997.                4
          Consolidated Statements of Cash Flows for the six month
            periods ended June 30, 1998 and 1997.                              5
          Notes to Condensed Consolidated Financial Statements.              6-7

  Item 2. Management's Discussion and Analysis of Financial
            Condition and Results of Operations                             8-24

PART II.  OTHER INFORMATION

  Item 4. Submission of Matters to a Vote of Security Holders                 25

  Item 6. Exhibits and Reports on Form 8-K                                    25

================================================================================
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,
1997 Annual Report on Form 10-K and the March 31, 1998 quarterly  report on Form
10-Q for The CIT Group, Inc. (the "Company").


                                      -1-
<PAGE>

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

                                                        June 30,    December 31,
                                                          1998         1997
                                                       ----------   ------------
                                                       (unaudited)
Assets
Financing and leasing assets
Loans
  Commercial                                           $ 10,327.8    $  9,922.5
  Consumer                                                3,828.5       3,664.8
Commercial lease receivables                              4,249.1       4,132.4
                                                       ----------    ----------
  Finance receivables                                    18,405.4      17,719.7
Reserve for credit losses                                  (245.8)       (235.6)
                                                       ----------    ----------
  Net finance receivables                                18,159.6      17,484.1
Operating lease equipment, net                            2,147.0       1,905.6
Consumer finance receivables held for sale                  846.0         268.2
Cash and cash equivalents                                   169.4         140.4
Other assets                                                726.8         665.8
                                                       ----------    ----------
 Total assets                                          $ 22,048.8    $ 20,464.1
                                                       ==========    ==========
                                                                    
Liabilities and Stockholders' Equity                                
Debt                                                                
Commercial paper                                       $  6,197.0    $  5,559.6
Variable rate senior notes                                3,050.0       2,861.5
Fixed rate senior notes                                   7,253.3       6,593.8
Subordinated fixed rate notes                               200.0         300.0
                                                       ----------    ----------
  Total debt                                             16,700.3      15,314.9
Credit balances of factoring clients                      1,193.9       1,202.6
Accrued liabilities and payables                            677.9         660.1
Deferred federal income taxes                               642.0         603.6
                                                       ----------    ----------
  Total liabilities                                      19,214.1      17,781.2
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, 700,000,000    shares authorized                            
 and 37,166,070 and 37,173,527 issued                               
 and outstanding at June 30, 1998                                   
 and December 31, 1997, respectively                          0.4           0.4
Class B common stock, par value $0.01 per                           
 share, 510,000,000 shares authorized                               
 and 126,000,000 issued and outstanding                       1.3           1.3
Paid-in capital                                             951.0         948.3
Retained earnings                                         1,632.0       1,482.9
                                                       ----------    ----------
  Total stockholders' equity                              2,584.7       2,432.9
                                                       ----------    ----------
  Total liabilities and stockholders' equity           $ 22,048.8    $ 20,464.1
                                                       ==========    ==========
 
See accompanying notes to consolidated financial statements.


                                      -2-
<PAGE>

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

<TABLE>
<CAPTION>
                                                         For the Three Months             For the Six Months
                                                            Ended June 30,                   Ended June 30, 
                                                    ----------------------------       ------------------------
                                                        1998              1997           1998              1997
                                                        ----              ----           ----              ----
<S>                                                  <C>               <C>             <C>               <C>    
Finance income                                       $   498.2         $   451.9       $   970.8         $ 889.0
Interest expense                                         257.8             233.6           502.4           456.7
                                                     ---------         ---------       ---------         -------
  Net finance income                                     240.4             218.3           468.4           432.3

Fees and other income                                     60.7              49.4           127.1           107.1
Gain on sale of equity interest acquired in
 loan workout                                              --               58.0             --             58.0
                                                     ---------         ---------       ---------         -------
  Operating revenue                                      301.1             325.7           595.5           597.4
                                                     ---------         ---------       ---------         -------
Salaries and general operating expenses                  104.0             110.6           205.7           210.5
Provision for credit losses                               21.9              29.0            44.4            56.0
Depreciation on operating lease equipment                 40.4              33.9            78.7            66.0
Minority interest in subsidiary trust holding
 solely debentures of the Company                          4.8               4.8             9.6             6.7
                                                     ---------         ---------       ---------         -------
  Operating expenses                                     171.1             178.3           338.4           339.2
                                                     ---------         ---------       ---------         -------
Income before provision for income taxes                 130.0             147.4           257.1           258.2
Provision for income taxes                                46.3              53.7            91.7            94.4
                                                     ---------         ---------       ---------         -------
Net income                                           $    83.7         $    93.7       $   165.4         $ 163.8
                                                     =========         =========       =========         =======
Basic net income per share                             $  0.52             $0.59           $1.02           $1.04
Diluted net income per share                           $  0.51             $0.59           $1.01           $1.03
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -3-
<PAGE>

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

                                                          Six Months Ended
                                                               June 30,
                                                         -------------------
                                                         1998           1997
                                                         ----           ----
                                                             (unaudited)
Balance, January 1                                     $2,432.9      $2,075.4
Net income                                                165.4         163.8
Dividends declared                                        (16.3)        (48.6)
Other                                                       2.7           --
                                                       --------      --------
Balance, June 30                                       $2,584.7      $2,190.6
                                                       ========      ========

See accompanying notes to consolidated financial statements.


                                      -4-
<PAGE>

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

                                                          Six Months Ended
                                                              June 30,
                                                         -------------------
                                                         1998           1997
                                                         ----           ----
CASH FLOWS FROM OPERATIONS                                   (unaudited)
Net income                                         $     165.4      $     163.8 
Adjustments to reconcile net income to                              
 net cash flows from operations:                                    
 Provision for credit losses                              44.4             56.0
 Depreciation and amortization                            91.4             76.8
 Provision (benefit) for deferred federal                           
  income taxes                                            38.4             (2.5)
 Gains on asset and receivable sales                     (37.5)           (86.5)
 Increase in accrued liabilities and payables             17.8              9.3
 Increase in other assets                                (46.3)           (50.5)
 Other                                                     7.8              4.7
                                                     ---------        --------- 
  Net cash flows provided by operations                  281.4            171.1
                                                     ---------        --------- 
CASH FLOWS FROM INVESTING ACTIVITIES                                
Loans extended                                       (17,485.8)       (15,977.6)
Collections on loans                                  15,986.1         15,165.4
Purchases of assets to be leased                        (362.5)          (275.6)
Net increase in short-term factoring receivables        (190.0)          (137.8)
Proceeds from asset and receivable sales                 518.2            377.5
Proceeds from sales of assets received in                           
 satisfaction of loans                                    23.6             13.6
Purchases of investment securities                       (16.1)           (11.6)
Other                                                    (18.9)           (11.7)
                                                     ---------        --------- 
  Net cash flows used for investing activities        (1,545.4)          (857.8)
                                                     ---------        --------- 
CASH FLOWS FROM FINANCING ACTIVITIES                                
Proceeds from the issuance of variable and                          
 fixed rate notes                                      2,858.4          1,949.3
Repayments of variable and fixed rate notes           (2,110.4)        (1,806.0)
Net increase in commercial paper                         637.4            550.8
Proceeds from nonrecourse leveraged lease debt             6.4             33.0
Repayments of nonrecourse leveraged lease debt           (82.5)           (92.9)
Proceeds from the issuance of company-obligated                     
 mandatorily redeemable preferred securities                        
 of subsidiary trust holding solely debentures                      
 of the Company                                         --                250.0
Cash dividends paid                                      (16.3)           (48.6)
                                                     ---------        --------- 
  Net cash flows provided by financing activities      1,293.0            835.6
                                                     ---------        --------- 
Net increase in cash and cash equivalents                 29.0            148.9
Cash and cash equivalents, beginning of period           140.4            103.1
                                                     ---------        --------- 
Cash and cash equivalents, end of period           $     169.4      $     252.0
                                                     =========        ========= 
Supplemental disclosures                                            
Interest paid                                      $     501.7      $     458.3
Federal and state and local income taxes paid      $      38.8      $      60.3
Noncash transfers of finance receivables to                         
 assets received in satisfaction of loans          $      11.9      $      12.5
Noncash transfers of assets received in                             
 satisfaction of loans to finance receivables      $    --          $       4.6
                                                                  
See accompanying notes to consolidated financial statements.    


                                      -5-
<PAGE>

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

Note 1--Basis of Presentation

The Company  considers that 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;  however,  results  for  interim
periods are  subject to year-end  audit  adjustments.  Results for such  interim
periods  are  not  necessarily  indicative  of  results  for a full  year. 

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 June 30,
                         -------------------------------------------------------------------------------------------
                                            1998                                           1997
                         -------------------------------------------   ---------------------------------------------
                            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          $83.7       162,225,000        $0.52         $93.7      157,500,000         $0.59
                                                             =====                                        =====
Effect of Dilutive
 Securities:
  Restricted shares             --            942,375                        --           948,527
  Stock options                 --            487,835                        --               -- 
                              -----    --------------                      -----      -----------
Diluted EPS                   $83.7       163,655,210        $0.51         $93.7      158,448,527         $0.59
                              =====       ===========        =====         =====      ===========         =====
--------------------------------------------------------------------------------------------------------------------

<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                     For the Six Months Ended June 30,
                         -------------------------------------------------------------------------------------------
                                            1998                                           1997
                         -------------------------------------------   ---------------------------------------------
                            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          $165.4      162,225,000        $1.02         $163.8     157,500,000         $1.04
                                                             =====                                        =====
Effect of Dilutive
 Securities:
  Restricted shares             --            945,012                        --           948,527
  Stock options                 --            409,684                        --               --
                              ------      -----------                      ------     -----------
Diluted EPS                   $165.4      163,579,696        $1.01         $163.8     158,448,527         $1.03
                              ======      ===========        =====         ======     ===========         =====
--------------------------------------------------------------------------------------------------------------------
</TABLE>


                                      -6-
<PAGE>

Note 3--Recent Accounting Pronouncements

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  ("SFAS") No. 133,  "Accounting  for Derivative
Instruments and Hedging Activities".  This statement standardizes the accounting
for derivative instruments and hedging activities,  including certain derivative
instruments  embedded  in other  contracts.  Under the  standard,  entities  are
required to carry all  derivative  instruments  in the  statement  of  financial
position  at fair value.  The  accounting  for changes in the fair value  (i.e.,
gains or  losses)  of a  derivative  instrument  depends  on whether it has been
designated  and qualifies as part of a hedging  relationship  and, if so, on the
reason for holding it.

If certain  conditions  are met,  entities  may elect to  designate a derivative
instrument  as a hedge of exposures to changes in fair  values,  cash flows,  or
foreign currencies. If the hedged exposure is a fair value exposure, the gain or
loss on the  derivative  instrument  is  recognized in earnings in the period of
change together with the offsetting gain or loss on the hedged item attributable
to the risk being hedged.  If the hedged  exposure is a cash flow exposure,  the
effective  portion of the gain or loss on the derivative  instrument is reported
initially  as  a  component  of  other  comprehensive  income  and  subsequently
reclassified  into earnings when the forecasted  transaction  affects  earnings.
SFAS No. 133 is  effective  for all fiscal  quarters of fiscal  years  beginning
after June 15, 1999.  The Company has not yet determined the impact of SFAS 133,
however,  it anticipates that adoption of the statement will not have a material
impact on its financial position or results of operations.


                                      -7-
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS 

OVERVIEW

Net income for the second  quarter and the six month  period ended June 30, 1998
totaled $83.7 million and $165.4 million,  respectively. For the comparable 1997
periods,  net  income  was  $93.7  million  and  $163.8  million,   including  a
nonrecurring $58 million pretax gain on the sale of an equity interest  acquired
in a loan workout and certain nonrecurring expenses. Excluding these items, 1997
net income was $65.0 million for the second  quarter and $135.1  million for the
first six months.

On a per share  basis,  excluding  the 1997  nonrecurring  items,  earnings  per
diluted share for the second quarter of 1998  increased  24.4% to $.51 from $.41
with six month earnings per diluted share increasing 18.8% to $1.01 from $.85.

Excluding the 1997 nonrecurring  items, return on average earning assets ("AEA")
for the second quarter of 1998 was 1.67% compared with a return of 1.43% for the
second quarter of 1997. Return on AEA for the six months ended June 30, 1998 was
1.69% compared with 1.51% for the same period of 1997.  Return on equity for the
second  quarter of 1998 was 13.16%  compared  with 12.09% for the same period of
1997 and 13.19% for the first six months of 1998,  improved  from 12.69% for the
same period of 1997.  The  improvements  resulted from growth in revenues from a
higher level of  financing  and leasing  assets,  lower net credit  losses,  and
improvements in operating efficiency.


                                      -8-
<PAGE>

Managed assets,  comprised of financing and leasing assets and consumer  finance
receivables  previously  securitized  and  currently  managed  by  the  Company,
increased 7.0% to a record $23.9 billion at June 30, 1998, from $22.3 billion at
December 31, 1997.  Financing and leasing  assets totaled a record $21.5 billion
at June 30, 1998, an increase of 7.6% from $20.0 billion at December 31, 1997.

NET FINANCE INCOME

A comparison of 1998 and 1997 net finance income is set forth below.

--------------------------------------------------------------------------------
                                              Three Months Ended
                            ----------------------------------------------------
                                     June 30,                     Increase
                            ------------------------       ---------------------
                               1998          1997            Amount     Percent
                               ----          ----            ------     -------
                                          (Dollar Amounts in Millions)
Finance income              $   498.2     $   451.9        $   46.3       10.2%
Interest expense                257.8         233.6            24.2       10.4%
                            ---------     ---------        --------       ----
Net finance income          $   240.4     $   218.3        $   22.1       10.1%
                            =========     =========        ========       ----

AEA                         $20,086.0     $18,132.7        $1,953.3       10.8%
                            =========     =========        ========       ====

Net finance income 
  as a % of AEA                  4.79%         4.82%
                                 ====          ====
--------------------------------------------------------------------------------

                                               Six Months Ended
                            ----------------------------------------------------
                                    June 30,                   Increase
                            -----------------------     ------------------------
                               1998          1997          Amount      Percent
                               ----          ----          ------      -------
                                        (Dollar Amounts in Millions)

Finance income              $   970.8     $   889.0      $   81.8        9.2%
Interest expense                502.4         456.7          45.7       10.0%
                            ---------     ---------      --------       ----
Net finance income          $   468.4     $   432.3      $   36.1        8.4%
                            =========     =========      ========       ----
AEA                         $19,578.9     $17,870.0      $1,708.9        9.6%
                            =========     =========      ========       ====
Net finance income as 
   a % of AEA                    4.79%         4.84%
                                 ====          ====
--------------------------------------------------------------------------------

Finance income for the three months ended June 30, 1998 increased  $46.3 million
or 10.2%  from the  comparable  1997  period.  Finance  income for the six month
period ended June 30, 1998  increased  $81.8 million or 9.2% from the comparable
1997 period. As a percentage of AEA, 


                                      -9-
<PAGE>

finance   income    (excluding    interest   income   relating   to   short-term
interest-bearing  deposits) was 9.78% for both the second  quarter and six month
period  ended June 30,  1998 and 9.89% and 9.87% for the  respective  periods in
1997.

The following  table sets forth the commercial and consumer  segments of finance
income as a percentage of AEA.

--------------------------------------------------------------------------------
                           Three Months Ended              Six Months Ended
                                June 30,                       June 30,
                       -----------------------------   -------------------------
                         1998             1997            1998           1997
                         ----             ----            ----           ----
  Commercial             9.91%            9.97%           9.88%          9.98%
  Consumer               9.34%            9.55%           9.37%          9.54%
--------------------------------------------------------------------------------

The decline in the consumer  segment  finance income as a percentage of consumer
AEA for the three and six months ended June 30, 1998 reflects  lower 1998 market
interest rates and the sale of certain higher yielding high loan-to-value  loans
(with higher credit risk characteristics) during the second quarter of 1997.

Interest  expense  for the three  months  ended June 30,  1998  increased  $24.2
million or 10.4% from the comparable  1997 period,  and for the six month period
ended June 30, 1998,  increased  $45.7  million or 10.0% from the same period in
1997. As a percentage  of AEA,  interest  expense  (excluding  interest  expense
relating to short-term interest-bearing deposits) for the second quarter of 1998
decreased to 4.99% from 5.07% from the  comparable  period of 1997 and decreased
to 4.99%  from  5.03% for the six month  period  ended  June 30,  1998 and 1997,
respectively.


                                      -10-
<PAGE>

A  comparative  analysis  of the  weighted  average  principal  outstanding  and
interest  rates paid on the  Company's  debt for the three and six month periods
ended June 30, 1998 and 1997,  before and after giving  effect to interest  rate
swaps, is shown in the following tables.

--------------------------------------------------------------------------------
                                        Three Months Ended June 30, 1998
                                       ----------------------------------
                                       Before Swaps           After Swaps
                                       ------------           -----------
                                           (Dollar Amounts in Millions)

Commercial paper and variable         
 rate senior notes                $ 9,542.9     5.61%     $ 6,879.1     5.55%
Fixed rate senior and 
 subordinated notes                 7,057.0     6.34%       9,720.8     6.42%
                                  ---------               ---------
Composite                         $16,599.9     5.92%     $16,599.9     6.06%
                                  =========               =========

                                        Three Months Ended June 30, 1997
                                        ---------------------------------
                                        Before Swaps          After Swaps
                                        ------------          -----------

Commercial paper and variable 
 rate senior notes                $ 9,846.2     5.65%     $ 6,483.6     5.57%
Fixed rate senior and 
 subordinated notes                 5,165.4     6.59%       8,528.0     6.54%
                                  ---------               ---------
Composite                         $15,011.6     5.97%     $15,011.6     6.12%
                                  =========               =========
--------------------------------------------------------------------------------
                                          Six Months Ended June 30, 1998
                                        ---------------------------------
                                        Before Swaps          After Swaps
                                        ------------          -----------
                                           (Dollar Amounts in Millions)
Commercial paper and variable 
 rate senior notes                $ 8,781.6     5.63%     $ 6,215.0     5.57%
Fixed rate senior and 
 subordinated notes                 7,056.7     6.37%       9,623.3     6.45%
                                  ---------               ---------
Composite                         $15,838.3     5.96%     $15,838.3     6.11%
                                  =========               =========

                                        Six Months Ended June 30, 1997
                                        ---------------------------------
                                        Before Swaps          After Swaps
                                        ------------          -----------
Commercial paper and variable 
 rate senior notes                $ 9,811.4     5.55%     $ 6,456.4     5.48%
Fixed rate senior and 
 subordinated notes                 5,040.6     6.57%       8,395.6     6.52%
                                  ---------               ---------
Composite                         $14,852.0     5.90%     $14,852.0     6.07%
                                  =========               =========
--------------------------------------------------------------------------------

The Company's  interest  rate swaps  principally  convert  floating rate debt to
fixed  interest  rates.  The Company  does not enter into  derivative  financial
instruments for trading or speculative purposes.  The weighted average composite
rate after swaps increased from the before swaps composite interest rate in each
period presented  primarily  because a larger  proportion of the Company's 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


                                      -11-
<PAGE>

necessarily  reflect the interest  expense that would have been incurred had the
Company chosen to manage interest rate risk without the use of such swaps.

FEES AND OTHER INCOME

For the three months ended June 30, 1998,  fees and other income  totaled  $60.7
million,  an increase of $11.3 million  (22.9%) over the comparable 1997 period.
Fees and other income  totaled  $127.1 million for the six months ended June 30,
1998, an increase of $20.0 million (18.7%) over the comparable 1997 period.  The
following table sets forth the components of fees and other income.

--------------------------------------------------------------------------------
                                     Three Months Ended      Six Months Ended 
                                          June 30,                June 30,
                                    --------------------------------------------
                                      1998         1997      1998        1997
                                      ----         ----      ----        ----
                                              (Dollar Amounts in Millions)

Factoring commissions                $ 22.6      $ 22.1    $ 45.6      $  43.3
Fees and other                         21.9        18.2      44.0         35.2
Gains on sales of leasing 
  equipment                             8.9         5.7      23.7         17.1
Gains on sales of venture 
  capital investments                   1.9         2.3       8.4         10.0
Gains on securitizations and 
  sales of finance receivables          5.4         1.1       5.4          1.5
                                     ------      ------    ------      -------
                                     $ 60.7      $ 49.4    $127.1      $ 107.1
                                     ======      ======    ======      =======
--------------------------------------------------------------------------------

1997 GAIN ON SALE OF EQUITY INTEREST ACQUIRED IN LOAN WORKOUT

The Company originated a loan in the 1980's to a telecommunications company that
subsequently went into default.  Pursuant to a workout  agreement,  the stock of
that  company  was  transferred  to the Company and a  co-lender.  In 1991,  the
Company  received  all  amounts  due and  retained  an equity  interest  in such
telecommunications  company,  which was sold in the second quarter of 1997 for a
pretax gain to the Company of $58.0 million.


                                      -12-
<PAGE>

SALARIES AND GENERAL OPERATING EXPENSES

Salaries and general operating expenses decreased $6.6 million or 6.0% to $104.0
million in the second quarter of 1998 from $110.6 million in the comparable 1997
period.  For the six month  period  ended June 30,  1998,  salaries  and general
operating  expenses decreased $4.8 million or 2.3% to $205.7 million from $210.5
million in the comparable 1997 period. Included in 1997 are certain nonrecurring
expenses  relating to a long-term  incentive  plan  ("LTIP") and a provision for
vacant leased office space. The LTIP was  subsequently  terminated in connection
with the  Company's  fourth  quarter  public  offering and was  replaced  with a
stock-based  compensation  plan.  Excluding  these special  items,  salaries and
general  operating  expenses  increased  3.4% to $104.0  million for the quarter
ended June 30, 1998 and 2.6% to $205.7  million for the six month  period  ended
June 30, 1998.

Management  monitors  productivity  via the analysis of the efficiency ratio and
the ratio of salaries and general  operating  expenses to average managed assets
("AMA").  These  ratios,  excluding  the  nonrecurring  pretax  gain and certain
nonrecurring  expenses  in  1997  previously  described,  are set  forth  in the
following table.

--------------------------------------------------------------------------------
                                   Three Months Ended         Six Months Ended
                                        June 30,                  June 30,
                               -------------------------  ----------------------
                                  1998          1997        1998          1997
                                  ----          ----        ----          ----

Efficiency ratio                  40.6%         43.9%       40.6%         43.0%
Salaries and general 
 operating expenses
 as a percentage of AMA           1.86%         2.06%       1.88%         2.08%
--------------------------------------------------------------------------------

The  improvement  in the ratios  reflects the ability of the Company to leverage
its  existing   infrastructure  and  the  success  of  continuing   productivity
initiatives.


                                      -13-
<PAGE>

RESERVE AND PROVISION FOR CREDIT LOSSES/CREDIT QUALITY

The reserve for credit losses is periodically  reviewed for adequacy considering
economic conditions,  collateral values and credit quality indicators, including
chargeoffs,  past due loans, and nonperforming  assets.  The reserve  increased,
principally  due to growth in the portfolio,  by $10.2 million to $245.8 million
(1.34% of finance  receivables)  at June 30, 1998 from $235.6  million (1.33% of
finance receivables) at December 31, 1997. The ratio of the consolidated reserve
for credit losses to trailing  twelve-month  net credit losses increased to 3.00
times at June 30, 1998 from 2.33 times at December 31, 1997.

The  provision  for credit  losses in both 1998 periods  declined  from the 1997
periods due to lower net  commercial  credit losses offset by higher  provisions
related to portfolio  growth.  The  provision  for credit  losses for the second
quarter of 1998 was $21.9 million, down from $29.0 million in the second quarter
of 1997, and for the six months ended June 30, 1998,  decreased to $44.4 million
from $56.0  million for the same period of 1997.  Net  commercial  credit losses
declined in 1998 as a result of lower chargeoffs, higher recoveries, and certain
1997  chargeoffs  relating to the  oceangoing  maritime  portfolio.  The Company
ceased  marketing to the  oceangoing  maritime  industry in the third quarter of
1997.


                                      -14-
<PAGE>

The  following  table sets forth  commercial  and  consumer  segment  net credit
losses.

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

                                                              Three Months Ended June 30,
                                     -------------------------------------------------------------------------------
                                                      1998                                    1997
                                     ---------------------------------------  --------------------------------------
                                       Total    Commercial      Consumer        Total    Commercial     Consumer
                                       -----    ----------      --------        -----    ----------     --------
                                                              (Dollar Amounts in Millions)
<S>                                    <C>         <C>           <C>            <C>         <C>           <C> 
Net credit losses                      $16.4       $5.8          $10.6          $29.9       $21.2         $8.7
Net credit losses as a
 percentage of average finance
 receivables,  excluding
 consumer finance receivables
 held for sale (annualized)            0.36%       0.19%         1.12%          0.71%       0.62%         1.12%
--------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                               Six Months Ended June 30,
                                     -------------------------------------------------------------------------------
                                                      1998                                    1997
                                     ---------------------------------------  --------------------------------------
                                       Total    Commercial      Consumer        Total    Commercial     Consumer
                                       -----    ----------      --------        -----    ----------     --------
                                                              (Dollar Amounts in Millions)

<S>                                    <C>         <C>           <C>            <C>         <C>           <C>  
Net credit losses                      $36.4       $15.1         $21.3          $55.5       $38.2         $17.3
Net credit losses as a
 percentage of average finance
 receivables,  excluding
 consumer finance receivables
 held for sale (annualized)            0.41%       0.23%         1.15%          0.67%       0.57%         1.09%
--------------------------------------------------------------------------------------------------------------------
</TABLE>

As a percentage  of average  managed  finance  receivables,  consumer net credit
losses  were  0.91%  during  the  second  quarter  and first six months of 1998,
relatively unchanged from the same periods in 1997.


                                      -15-
<PAGE>

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
June 30, 1998, March 31, 1998, and December 31, 1997.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                           At June 30,                 At March 31,              At December 31,
                                               1998                        1998                       1997
                                      -----------------------    -------------------------    ----------------------
                                                               (Dollar Amounts in Millions)
<S>                                    <C>          <C>           <C>          <C>             <C>         <C>  
Finance receivables, past due
 60 days or more
  Commercial                           $  208.4     1.43%         $   182.1    1.27%           $  168.9    1.20%
  Consumer                                129.0     3.37%             122.3    3.28%              127.7    3.48%
                                       --------     ----          ---------    ----            --------    ----
    Total                              $  337.4     1.83%         $   304.4    1.68%           $  296.6    1.67%
                                       ========     ====          =========    ====            ========    ====

Total nonperforming assets
  Commercial                           $  165.7     1.14%         $   137.9    0.96%           $  105.5    0.75%
  Consumer                                105.9     2.77%             107.4    2.88%              101.9    2.78%
                                       --------     ----          ---------    ----            --------    ----
    Total                              $  271.6     1.48%         $   245.3    1.35%           $  207.4    1.17%
                                       ========     ====          =========    ====            ========    ====
--------------------------------------------------------------------------------------------------------------------
</TABLE>

Total  nonperforming   assets  reflect  both  commercial  and  consumer  finance
receivables on nonaccrual status and assets received in satisfaction of loans.

OPERATING LEASE EQUIPMENT

The operating  lease  equipment  portfolio was $2.1 billion at June 30, 1998, up
12.7% from  December  31, 1997 and up 36.5% from June 30,  1997.  As a result of
growth in the  portfolio,  depreciation  on operating  lease  equipment  for the
second  quarter of 1998 was $40.4  million,  up from $33.9  million for the same
period in 1997,  and  depreciation  for the six month period ended June 30, 1998
was $78.7 million, up from $66.0 million for the same period in 1997.

From time to time,  financial or operational  difficulties  may adversely affect
future payments to the Company  relating to operating lease  equipment.  At June
30, 1998, operators of certain aircraft assets and operations at an oil refinery


                                      -16-
<PAGE>

were subject to such difficulties.  The approximate  aggregate carrying value of
these assets was $49.7 million.  The Company does not believe these difficulties
will have a material effect on its consolidated financial position or results of
operations.

INCOME TAXES

The effective  income tax rates for the 1998 and 1997 second quarters were 35.6%
and 36.4%,  respectively,  and for the six month periods ended June 30, 1998 and
1997 were 35.7% and 36.6%, respectively. The decreases in the effective tax rate
for the three and six months  ended June 30,  1998 were a result of lower  state
and local income taxes.


                                      -17-
<PAGE>

FINANCING AND LEASING ASSETS

Managed  assets grew $1,575.0  million  (7.0%) to $23.9  billion.  Financing and
leasing assets increased $1,514.6 million (7.6%) to $21.5 billion,  as presented
in the following table.

--------------------------------------------------------------------------------
                                                   At Decem-        Change
                                     At June 30,     ber 31,   -----------------
                                       1998          1997      Amount    Percent
                                       ----          ----      ------    -------
                                             (Dollar Amounts in Millions)
Commercial
Equipment Financing and Leasing
Equipment Financing
  Finance receivables                 $ 7,649.2   $ 7,403.4   $  245.8      3.3%
  Operating lease equipment, net          641.0       623.8       17.2      2.8
                                      ---------   ---------   --------     ---- 
Total Equipment Financing               8,290.2     8,027.2      263.0      3.3
                                      ---------   ---------   --------     ---- 
Capital Finance(1)                                                        
  Finance receivables                   2,218.4     2,400.7   $ (182.3)    (7.6)
  Operating lease equipment, net        1,506.0     1,281.8      224.2     17.5
                                      ---------   ---------   --------     ---- 
Total Capital Finance                   3,724.4     3,682.5       41.9      1.1
                                      ---------   ---------   --------     ---- 
Factoring                                                                 
  Commercial Services                   2,295.3     2,113.1      182.2      8.6
                                      ---------   ---------   --------     ---- 
Commercial Finance                                                        
  Business Credit                       1,448.1     1,247.9      200.2     16.0
  Credit Finance                          965.9       889.8       76.1      8.6
                                      ---------   ---------   --------     ---- 
Total Commercial Finance                2,414.0     2,137.7      276.3     12.9
                                      ---------   ---------   --------     ---- 
Other                                                                     
  Equity Investments                       75.5        65.8        9.7     14.7
                                      ---------   ---------   --------     ---- 
  Total commercial                     16,799.4    16,026.3      773.1      4.8
                                      ---------   ---------   --------     ---- 
Consumer                                                                  
Consumer Finance                        2,397.3     1,992.3      405.0     20.3
Sales Financing                         2,277.2     1,940.7      336.5     17.3
                                      ---------   ---------   --------     ---- 
  Total consumer                        4,674.5     3,933.0      741.5     18.9
                                      ---------   ---------   --------     ---- 
  Total financing and                                                     
    leasing assets                     21,473.9    19,959.3    1,514.6      7.6
                                      ---------   ---------   --------     ---- 
Consumer finance receivables                                              
  previously securitized                                                  
  and currently managed                                                   
  by the Company                                                          
Consumer Finance                          374.6       453.8      (79.2)   (17.5)
Sales Financing                         2,071.4     1,931.8      139.6      7.2
                                      ---------   ---------   --------     ---- 
                                        2,446.0     2,385.6       60.4      2.5
                                      ---------   ---------   --------     ---- 
Total managed assets                  $23,919.9   $22,344.9   $1,575.0      7.0%
                                      =========   =========   ========     ==== 

----------
(1)  Capital Finance's liquidating portfolio,  primarily oceangoing maritime and
     project  finance,  was $568.9 million at June 30, 1998 and decreased $256.2
     million from $825.1 million at June 30, 1997 and $106.3 million from $675.2
     million at December 31, 1997.

Growth in the equipment financing and leasing businesses was generated by strong
originations in aerospace,  rail, and construction.  Commercial  Services growth
was primarily due to higher factoring volume and client  borrowings,  as well as


                                      -18-
<PAGE>

effective  new  business  marketing.   The  growth  in  the  commercial  finance
businesses was the result of higher 1998 new business generation.

Consumer  managed  assets  increased  to $7.1 billion at June 30, 1998 from $6.3
billion at December 31, 1997, up 12.7%. The increase was a result of strong 1998
originations,   particularly  in  the  home  equity,   recreation  vehicle,  and
recreational boat products.

Financing and Leasing Assets Composition

The Company's ten largest  financing and leasing asset accounts at June 30, 1998
in the aggregate  represented  4.5% of the Company's total financing and leasing
assets.  All ten of such  accounts  are  commercial  accounts and are secured by
equipment, accounts receivable or inventory.

Geographic Composition

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

--------------------------------------------------------------------------------
                                At June 30, 1998           At December 31, 1997
                            ------------------------     -----------------------
                              Amount       Percent         Amount        Percent
                              ------       -------         ------        -------
                                        (Dollar Amounts in Millions)
United States
  West                      $ 5,004.9        23.3%        $ 4,642.1        23.3%
  Northeast                   4,800.9        22.3           4,501.9        22.6
  Midwest                     4,607.8        21.5           4,290.0        21.5
  Southeast                   3,179.3        14.8           2,802.9        14.0
  Southwest                   2,460.4        11.5           2,360.7        11.8
Foreign (principally 
  commercial aircraft)        1,420.6         6.6           1,361.7         6.8
                            ---------       -----         ---------       -----
  Total                     $21,473.9       100.0%        $19,959.3       100.0%
                            =========       =====         =========       =====
--------------------------------------------------------------------------------

The Company's managed asset geographic  diversity does not differ  significantly
from its owned asset geographic  diversity.  


                                      -19-
<PAGE>

The Company's  financing and leasing asset portfolio is diversified by state. At
June 30, 1998, with the exception of California  (12.4%),  New York (8.4%),  and
Texas  (7.7%),  no state  represented  more than 5.0% of  financing  and leasing
assets.

Industry Composition

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

--------------------------------------------------------------------------------
                                 At June 30, 1998        At December 31, 1997
                              -----------------------    --------------------
                                Amount       Percent      Amount      Percent
                                ------       -------      ------      -------
                                        (Dollar Amounts in Millions)
Manufacturing(1) (none 
 greater than 4.3%)           $ 4,654.4       21.7%       $ 4,440.4      22.2%
Home mortgage(2)                2,397.4       11.2          1,992.3      10.0
Commercial airlines(3)          2,189.8       10.2          2,077.6      10.4
Construction equipment          1,906.5        8.9          1,791.4       9.0
Retail                          1,771.9        8.2          1,807.5       9.1
Transportation(4)               1,432.5        6.7          1,283.7       6.4
Manufactured housing(5)         1,286.0        6.0          1,125.7       5.6
Other (none greater 
  than 3.5%)(6)                 5,835.4       27.1          5,440.7      27.3
                              ---------      -----        ---------     -----
Total                         $21,473.9      100.0%       $19,959.3     100.0%
                              =========      =====        =========     =====

(1)  Includes  manufacturers of steel and metal products,  textiles and apparel,
     printing and paper products and other industries.
(2)  On a managed asset basis,  home mortgage  outstandings were $2.8 billion or
     11.6% of managed  assets at June 30, 1998 as compared  with $2.4 billion or
     10.9% at December 31, 1997.
(3)  See  "--Concentrations"  below for a discussion of the  commercial  airline
     portfolio.
(4)  Includes rail, bus, over-the-road trucking, and business aircraft.
(5)  On a managed  asset  basis,  manufactured  housing  outstandings  were $1.5
     billion  or 6.2% of managed  assets at June 30,  1998 as  compared  to $1.5
     billion or 6.5% at December 31, 1997.
(6)  On a managed asset basis, recreation vehicle outstandings were $1.7 billion
     or 7.1% of managed  assets at June 30, 1998 as compared to $1.6  billion or
     7.2% at December 31, 1997.  On a managed  asset  basis,  recreational  boat
     outstandings were $966.5 million or 4.0% of managed assets at June 30, 1998
     as compared  to $682.5  million or 3.1% of managed  assets at December  31,
     1997.

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


                                      -20-
<PAGE>

Concentrations

Commercial Airline Industry

Commercial  airline financing and leasing assets totaled $2.2 billion (10.2%) of
total  financing  and leasing  assets at June 30, 1998,  up from $2.1 billion at
December 31, 1997.  The portfolio is secured by commercial  aircraft and related
equipment.  Given improved industry  performance in 1997, the Company determined
to grow this  portfolio  and will  continue to monitor the size of the portfolio
relative to the Company's total financing and leasing assets.

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

--------------------------------------------------------------------------------
                                       At June 30, 1998     At December 31, 1997
                                       ----------------    ---------------------
Finance Receivables                           (Dollar Amounts in Millions)
  Amount outstanding(1)                     $ 1,215.9            $ 1,254.9
  Number of obligors                               54                   54
Operating Lease Equipment, net

  Net carrying value                            973.9                822.7
  Number of obligors                               33                   33

Total                                         2,189.8              2,077.6
Number of obligors(2)                              68                   67
Number of aircraft(3)                             217                  225

(1)  Includes  accrued rents on operating  leases that are classified as finance
     receivables in the Company's 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  through the year 2000.  The  International
     Civil Aviation  Organization has issued similar requirements for Europe. At
     June 30, 1998,  the  portfolio  consisted of Stage III aircraft of $2,067.1
     million (94.5%) and Stage II aircraft of $93.0 million (4.3%), versus Stage
     III  aircraft of $1,933.5  million  (93.1%) and Stage II aircraft of $115.7
     million (5.6%) at year-end 1997.

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

Foreign Outstandings.

The Company is primarily a domestic lender with foreign exposures limited mainly
to the  commercial  airline  industry.  Financing and leasing  assets to foreign
obligors  are  all  U.S. dollar  denominated  and  totaled $1.4 billion  at both


                                      -21-
<PAGE>

June 30, 1998 and  December 31, 1997.  The foreign  exposure was  geographically
dispersed,  with no individual country representing more than 0.75% of financing
and leasing assets.

LIQUIDITY

The Company  manages  liquidity  risk by monitoring  the relative  maturities of
assets and liabilities and by borrowing funds,  primarily in the U. S. money and
capital  markets.  Such cash is used 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,  other term debt  securities  and  asset-backed
securitizations.

During  the first six months of 1998,  commercial  paper  outstanding  increased
$637.4  million from $5.6 billion at December 31, 1997 to $6.2  billion.  During
this  period,  the Company  issued  $2.9  billion of term debt,  including  $1.5
billion of prime-based  variable-rate  debt and $1.4 billion of fixed-rate debt,
whereas  repayments  of term debt totaled $2.1 billion.  At June 30, 1998,  $5.6
billion of registered,  but unissued,  debt securities  remained available under
shelf registration  statements,  including $2.0 billion of registered,  unissued
European Medium-Term Notes.

At June 30, 1998,  commercial paper borrowings were supported by $5.0 billion of
committed  revolving  credit-line  facilities,  representing  81.3% of operating
commercial paper outstanding (commercial paper outstanding less interest-bearing
deposits). No borrowings have been made under credit lines supporting commercial
paper since 1970.


                                      -22-
<PAGE>

As part of the Company's  continuing program of accessing the public and private
asset-backed   securitization   markets  as  an  additional   liquidity  source,
recreation vehicle finance receivables of $400.1 million were securitized by the
Company  during the second  quarter of 1998.  At June 30, 1998,  $2.3 billion of
registered,  but unissued,  securities  relating to the  Company's  asset-backed
securitization program remained available under shelf registration statements.

CAPITALIZATION

The  following  table  presents  information  regarding  the  Company's  capital
structure.

--------------------------------------------------------------------------------
                                                    At June 30,  At December 31,
                                                       1998          1997
                                                    ----------    -----------
                                                    (Dollar Amounts in Millions)

Commercial paper                                    $ 6,197.0      $ 5,559.6  
Term debt                                            10,503.3        9,755.3
                                                    ---------      ---------
Total debt                                           16,700.3       15,314.9
Company-obligated mandatorily redeemable                         
 preferred securities of subsidiary                              
 trust holding solely debentures                                 
 of the Company                                         250.0          250.0
Stockholders' equity                                  2,584.7        2,432.9
                                                    ---------      ---------
Total capitalization                                $19,535.0      $17,997.8
                                                    =========      =========
Total debt to stockholders' equity and Company-                  
 obligated mandatorily redeemable preferred                      
 securities of subsidiary trust holding                          
 solely debentures of the Company                        5.89x         5.71x
Total debt and Company-obligated mandatorily                     
 redeemable preferred securities of subsidiary                   
 trust holding solely debentures of the                          
 Company to stockholders' equity                         6.56x         6.40x
                                                                 
--------------------------------------------------------------------------------
                                                               
The Company believes that it is well capitalized and that its capital  structure
is adequate to support anticipated growth.


                                      -23-
<PAGE>

STATISTICAL DATA

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

--------------------------------------------------------------------------------
                                                            Six Months Ended
                                                                 June 30,
                                                             ----------------
                                                              1998       1997
                                                              ----       ----
Finance income*                                               9.78%      9.87%
Interest expense*                                             4.99       5.03
                                                              ----       ---- 
  Net finance income                                          4.79       4.84

Fees and other income                                         1.29       1.20

Gain on sale of equity interest acquired in
 loan workout                                                  --        0.65
                                                              ----       ---- 
  Operating revenue                                           6.08       6.69
                                                              ----       ---- 

Salaries and general operating expenses                       2.10       2.36

Provision for credit losses                                   0.45       0.63

Depreciation on operating lease equipment                     0.80       0.74

Minority interest in subsidiary trust holding solely
 debentures of the company                                    0.10       0.07
                                                              ----       ---- 
  Operating expenses                                          3.45       3.80
                                                              ----       ---- 
Income before provision for income taxes                      2.63       2.89

Provision for income taxes                                    0.94       1.06
                                                              ----       ---- 
  Net income                                                  1.69%      1.83%
                                                              ====       ==== 
Average earning assets (in millions)                     $19,578.9  $17,870.0
                                                         =========  =========

*  Excludes   interest  income  and  interest  expense  relating  to  short-term
   interest-bearing deposits

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


                                      -24-
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 4. Submission of Matters to a Vote of Security Holders.

     The Annual Meeting of Stockholders  was held on May 27, 1998. The following
     individuals,  comprising  all of the  directors  of the  Corporation,  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:

       Director                             For             Against
       --------                             ---             -------
       Hisao Kobayashi                  661,873,165        1,889,427
       Albert R. Gamper, Jr.            661,879,665        1,882,927
       Daniel P. Amos                   662,146,365        1,616,227
       Yoshiro Aoki                     661,873,035        1,889,557
       Takasuke Kaneko                  657,233,420        6,529,172
       Joseph A. Pollicino              661,872,865        1,889,727
       Paul N. Roth                     661,872,865        1,889,727
       Peter J. Tobin                   662,146,365        1,616,227
       Tohru Tonoike                    661,873,035        1,889,557
       Alan F. White                    662,146,235        1,616,357

     In addition to  electing  the Board of  Directors,  the  stockholders  also
     ratified  the  appointment  of  KPMG  Peat  Marwick,  LLP,  as  independent
     accountants to examine the financial  statements of the Corporation and its
     subsidiaries for the year ending December 31, 1998, with 663,754,287  votes
     for, 3,560 votes against, and 1,820 votes abstaining.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibit 12 - Computation of Ratios of Earnings to Fixed Charges.
     (b)  Exhibit 27 - Financial Data Schedule
     (c)  A Form 8-K report  dated April 22, 1998 was filed with the  Commission
          reporting  the  Company's  announcement  of financial  results for the
          quarter ended March 31, 1998.
     (d)  A Form 8-K report  dated June 11,  1998 was filed with the  Commission
          reporting computational materials for the Company's recreation vehicle
          receivable securitization.


                                      -25-
<PAGE>

                                   SIGNATURES

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                                The CIT Group, Inc.
                                                (Registrant)

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

DATE:  August 12, 1998


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