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

                                  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 MARCH 31, 2001
                                       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 April 30, 2001: Common Stock including  Exchangeable  Shares
-262,500,824.

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


<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
                                   (UNAUDITED)

        TABLE OF CONTENTS                                                  PAGE
                                                                           ----

PART I. FINANCIAL INFORMATION                                                1

  Item 1.     Condensed Consolidated Financial Statements
              Consolidated Balance Sheets - March 31, 2001 and
                December 31, 2000.                                           2
              Consolidated Income Statements for the
                three months ended March 31, 2001 and 2000.                  3
              Consolidated Statements of Changes in Stockholders'
                Equity for the three months ended March 31, 2001
                and 2000.                                                    4
              Consolidated Statements of Cash Flows for the
                three months ended March 31, 2001 and 2000.                  5
              Notes to Condensed Consolidated Financial Statements.       6-12

  Item 2.     Management's Discussion and Analysis of Financial
   and          Condition and Results of Operations                      13-26
  Item 3.     Quantitative and Qualitative Disclosures about
                Market Risk

PART II. OTHER INFORMATION

  Item 4.     Submission of Matters to a Vote of Security Holders           27
  Item 6.     Exhibits and Reports on Form 8-K                              27


--------------------------------------------------------------------------------
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,  general  economic  conditions,  the ability to  integrate
recent  acquisitions  and the  ability to develop  new  business  from  proposed
business combinations.
--------------------------------------------------------------------------------

                          PART I. FINANCIAL INFORMATION

Certain   information  and  footnote   disclosures   normally  included  in  the
consolidated   financial  statements  prepared  in  accordance  with  accounting
principles  generally  accepted  in the  United  States  of  America  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, 2000 Annual Report on Form 10-K for
The CIT Group, Inc. ("we", "our", "us", "CIT", or the "Company").


                                       1
<PAGE>


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

<TABLE>
<CAPTION>
                                                                 March 31,                   December 31,
                                                                   2001                         2000
                                                               -------------                -------------
                                                               (unaudited)
<S>                                                               <C>                         <C>
Assets
Financing and leasing assets:
   Loans and leases:
     Commercial                                                   $29,102.2                   $29,304.0
     Consumer                                                       4,198.5                     4,193.5
                                                               -------------                -------------
   Finance receivables                                             33,300.7                    33,497.5
   Reserve for credit losses                                         (462.0)                     (468.5)
                                                               -------------                -------------
   Net finance receivables                                         32,838.7                    33,029.0
   Operating lease equipment, net                                   7,186.7                     7,190.6
   Finance receivables held for sale                                2,624.8                     2,698.4
Cash and cash equivalents                                             740.0                       812.1
Goodwill                                                            1,942.1                     1,964.6
Other assets                                                        3,053.1                     2,995.1
                                                               -------------                -------------
Total assets                                                      $48,385.4                   $48,689.8
                                                               =============                =============
Liabilities and Stockholders' Equity
Debt:
   Commercial paper                                               $ 9,662.9                   $ 9,063.5
   Variable rate senior notes                                      10,798.3                    11,130.5
   Fixed rate senior notes                                         17,157.0                    17,571.1
   Subordinated fixed rate notes                                      100.0                       200.0
                                                               -------------                -------------
Total debt                                                         37,718.2                    37,965.1
Credit balances of factoring clients                                2,131.4                     2,179.9
Accrued liabilities and payables                                    1,691.4                     1,640.8
Deferred federal income taxes                                         623.8                       646.8
                                                               -------------                -------------
Total liabilities                                                  42,164.8                    42,432.6
Company-obligated mandatorily redeemable
   preferred securities of subsidiary trust holding
   solely debentures of the Company                                   250.0                       250.0
Stockholders' equity:
   Common stock                                                         2.7                         2.7
   Paid-in capital                                                  3,535.9                     3,527.2
   Retained earnings                                                2,736.9                     2,603.3
   Treasury stock, at cost                                           (133.1)                     (137.7)
                                                               -------------                -------------
                                                                    6,142.4                     5,995.5
   Accumulated other comprehensive (loss) income                     (171.8)                       11.7
                                                               -------------                -------------
Total stockholders' equity                                          5,970.6                     6,007.2
                                                               -------------                -------------
Total liabilities and stockholders' equity                        $48,385.4                   $48,689.8
                                                               =============                =============
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       2
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
                         CONSOLIDATED INCOME STATEMENTS
                 (Dollars in Millions, except per share amounts)

<TABLE>
<CAPTION>
                                                                   For The Three Months
                                                                     Ended March 31,
                                                          -----------------------------------
                                                              2001                   2000
                                                          ------------           ------------
                                                                       (unaudited)
<S>                                                         <C>                    <C>
Finance income                                              $1,376.8               $1,228.8
Interest expense                                               625.7                  571.9
                                                          ------------           ------------
Net finance income                                             751.1                  656.9
Depreciation on operating lease equipment                      346.4                  307.8
                                                          ------------           ------------
Net finance margin                                             404.7                  349.1
Other revenue                                                  211.6                  238.2
                                                          ------------           ------------
Operating revenue                                              616.3                  587.3
                                                          ------------           ------------
Salaries and general operating expenses                        263.5                  268.2
Provision for credit losses                                     68.3                   61.6
Goodwill amortization                                           22.5                   20.5
Minority interest in subsidiary trust holding solely
   debentures of the Company                                     4.8                    4.8
                                                          ------------           ------------
Operating expenses                                             359.1                  355.1
                                                          ------------           ------------
Income before provision for income taxes                       257.2                  232.2
Provision for income taxes                                      97.1                   88.3
                                                          ------------           ------------
Net income                                                  $  160.1               $  143.9
                                                          ============           ============
Basic net income per share                                  $   0.61               $   0.55
Diluted net income per share                                $   0.61               $   0.55
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>

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

                                                       Three Months Ended
                                                            March 31,
                                               ---------------------------------
                                                   2001                 2000
                                               ------------         ------------
                                                           (unaudited)

  Balance, January 1                              $6,007.2            $5,554.4
                                               ------------         ------------
  Net income                                         160.1               143.9
  Foreign currency translation adjustments           (18.2)               (3.3)
  Unrealized (loss) gain on equity and
    securitization investments, net                   (0.1)                0.6
  Cumulative effect of adopting new
    accounting principle                            (146.5)                 --
  Change in fair value of derivatives
    qualifying as cash flow hedges                   (18.7)                 --
                                               ------------         ------------
  Total comprehensive (loss) income                  (23.4)              141.2

  Dividends declared                                 (26.4)              (26.6)
  Treasury stock issued (purchased)                    4.6               (20.3)
  Other                                                8.6                 2.9
                                               ------------         ------------
  Balance, March 31                               $5,970.6            $5,651.6
                                               ============         ============

See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

                      THE CIT GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Dollars in Millions)
<TABLE>
<CAPTION>

                                                                       Three Months Ended
                                                                            March 31,
                                                             ---------------------------------------
                                                                  2001                     2000
                                                             --------------           --------------
                                                                           (unaudited)
<S>                                                             <C>                      <C>
Cash Flows From Operations
Net income                                                    $     160.1               $    143.9
Adjustments to reconcile net income to net cash flows
   from operations:
     Provision for credit losses                                     68.3                     61.6
     Depreciation and amortization                                  380.0                    353.4
     Provision for deferred federal income taxes                     79.6                     47.7
     Gains on equipment, receivable and investment sales            (91.9)                   (95.7)
     Decrease in accrued liabilities and payables                  (335.1)                  (126.8)
     Decrease in other assets                                       104.0                     32.7
     Other                                                           26.1                      4.1
                                                             --------------           --------------
Net cash flows provided by operations                               391.1                    420.9
                                                             --------------           --------------
Cash Flows From Investing Activities
Loans extended                                                  (12,356.8)               (11,658.2)
Collections on loans                                             10,882.7                  9,453.7
Proceeds from asset and receivable sales                          1,901.2                  1,168.5
Purchases of assets to be leased                                   (391.1)                  (547.8)
Net increase in short-term factoring receivables                   (173.3)                  (267.3)
Purchase of finance receivable portfolios                            --                     (706.0)
Other                                                                (9.7)                    25.1
                                                             --------------           --------------
Net cash flows used for investing activities                       (147.0)                (2,532.0)
                                                             --------------           --------------
Cash Flows From Financing Activities
Repayments of variable and fixed rate notes                      (2,914.9)                (3,199.3)
Proceeds from the issuance of variable and fixed rate notes       2,068.6                  3,095.1
Net increase in commercial paper                                    599.4                  1,644.1
Net repayments of non-recourse leveraged lease debt                 (44.1)                   (66.9)
Cash dividends paid                                                 (26.4)                   (26.6)
Treasury stock issued (purchased)                                     4.6                    (20.3)
                                                             --------------           --------------
Net cash flows (used for) provided by financing activities         (312.8)                 1,426.1
                                                             --------------           --------------
Effect of exchange rate changes on cash                              (3.4)                     0.4
                                                             --------------           --------------
Net decrease in cash and cash equivalents                           (72.1)                  (684.6)
Cash and cash equivalents, beginning of period                      812.1                  1,073.4
                                                             --------------           --------------
Cash and cash equivalents, end of period                      $     740.0              $     388.8
                                                             ==============           ==============

Supplemental Disclosures
Interest paid                                                 $     647.7              $     526.7
Federal, state and local and foreign income taxes paid        $      14.7              $       4.2
</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 March 31,
                               -----------------------------------------------------------------------------------------
                                                  2001                                          2000
                               --------------------------------------------   ------------------------------------------
<S>                                <C>          <C>               <C>             <C>         <C>               <C>
Dollars in Millions,              Income          Shares         Per Share      Income          Shares       Per Share
  except per share amounts      (Numerator)    (Denominator)      Amount      (Numerator)   (Denominator)     Amount
                               -------------   --------------    ----------   -----------   -------------    -----------
Basic EPS:
   Income available to
     common shareholders           $160.1       260,628,793       $0.61           $143.9      262,931,435       $0.55
                                                                 =======                                       =======
Effect of dilutive securities:
     Restricted shares                 --         1,517,105                          --           660,570
     Stock options                     --         2,119,595                          --            28,097
                                  ---------     -------------                   ---------   --------------
Diluted EPS                        $160.1       264,265,493       $0.61           $143.9      263,620,102       $0.55
                                  =========     =============    =======        =========   ==============     =======
</TABLE>

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

Note 3 - Stockholders' Equity

The following table summarizes the outstanding  common stock, par value $.01 per
share, with 1,210,000,000  shares authorized,  and exchangeable  shares at March
31, 2001 and December 31, 2000.

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

<TABLE>
<CAPTION>
                                                     Common Stock
                                     -------------------------------------------------
                                                          Less                           Exchangeable
                                       Issued           Treasury        Outstanding         Shares
                                       ------           --------        -----------      ------------
<S>                                  <C>               <C>               <C>               <C>
Balance at March 31, 2001            257,648,978       (6,513,427)       251,135,551       11,123,122
                                     ===========       ==========        ===========       ==========

Balance at December 31, 2000         256,952,578       (6,692,519)       250,260,059       11,637,709
                                     ===========       ===========       ===========       ==========
</TABLE>

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

Exchangeable  shares of CIT Exchangeco  Inc., par value of $.01 per share,  were
issued in  connection  with the  acquisition  of Newcourt  Credit Group Inc. The
holders of Exchangeco shares have dividend, voting


                                       6
<PAGE>

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

and other rights  equivalent to those of CIT common  stockholders.  These shares
may be exchanged at any time at the option of the holder on a one-for-one  basis
for CIT  common  stock,  and in any  event  CIT may  redeem  these  shares  on a
one-for-one basis on or before November 1, 2004.

Note 4 - Derivative Financial Instruments

The Financial  Accounting Standards Board ("FASB") issued Statement of Financial
Accounting  Standards ("SFAS") No. 133,  "Accounting for Derivative  Instruments
and Hedging Activities," which became effective for CIT on January 1, 2001. SFAS
No. 133 was  amended by SFAS No. 137 and SFAS No.  138.  Under SFAS No.  133, as
amended, all derivative instruments are recognized in the balance sheet at their
fair values and changes in fair value are  recognized  immediately  in earnings,
unless the derivatives  qualify as hedges of future cash flows.  For derivatives
qualifying as hedges of future cash flows,  the effective  portion of changes in
fair value is recorded temporarily in stockholders' equity, and contractual cash
flows,  along  with the  related  impact of the  hedged  items,  continue  to be
recognized  in  earnings.  Any  ineffective  portion of a hedge is  reported  in
earnings as it occurs.

The ineffective  portion of changes in fair values of hedge positions,  reported
in first quarter earnings, amounted to $1.4 million before income taxes, or $0.8
million after taxes, and was recorded as an increase to interest expense.

On January 1, 2001, CIT recorded a $146.5 million  cumulative  effect adjustment
to Accumulated Other  Comprehensive  Loss, a separate component of stockholders'
equity, for derivatives qualifying as hedges of future cash flows to reflect the
new  accounting  standard for  derivatives.  The components of the adjustment to
Accumulated Other Comprehensive Loss at January 1, 2001 and balances outstanding
at March 31, 2001 are presented in the following table.

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

Dollars in Millions                         March 31, 2001      January 1, 2001
                                            ----------------    ----------------

Adjustment to fair value of derivatives          $266.5              $236.2
Income tax effects                                101.3                89.7
                                            -----------------   ----------------
Total unrealized loss                            $165.2              $146.5
                                            =================   ================

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


                                       7
<PAGE>

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

The  unrealized  losses  presented in the  preceding  table,  reflect our use of
interest rate swaps to convert  variable-rate  debt to fixed rates, and the fact
that  interest   rates  have  declined   since  such  contracts  were  executed.
Accumulated Other  Comprehensive Loss at March 31, 2001 reflects a $27.2 million
additional  unrealized loss, net of tax, on derivative  contracts since December
31, 2000.  In addition,  during the first  quarter of 2001,  approximately  $8.5
million, net of tax, was reflected in earnings for the interest  differential on
our  interest  rate  swaps.  Assuming  no change in  interest  rates,  we expect
approximately $39.7 million,  net of tax, of the Accumulated Other Comprehensive
Loss to be  reclassified  to earnings over the next twelve  months.  This amount
will change as interest  rates change in the future,  nevertheless,  prospective
interest margin will continue to reflect  interest costs at the contractual swap
rates. The Accumulated Other  Comprehensive  Loss, (along with the corresponding
swap  liability)  will be re-measured  as market  interest rates change over the
remaining life of the swaps.

CIT uses  derivatives  for  hedging  purposes  only,  and does  not  enter  into
derivative financial instruments for trading or speculative purposes. As part of
managing the exposure to changes in market interest rates,  CIT, as an end-user,
enters into various interest rate swap transactions, all of which are transacted
in  over-the-counter  markets,  with  other  financial  institutions  acting  as
principal  counterparties.  To ensure both  appropriate use as a hedge and hedge
accounting treatment, all derivatives entered into are designated according to a
hedge  objective  against  a specified  liability  including  senior  notes  and
commercial  paper.  CIT's primary  hedge  objectives  include the  conversion of
variable-rate  liabilities  to  fixed-rates,  and the  conversion  of fixed-rate
liabilities  to  variable-rates.   The  notional  amounts,  rates,  indices  and
maturities of CIT's  derivatives are required to closely match the related terms
of CIT's hedged liabilities.

The following  table  presents the notional  principal  amounts of interest rate
swaps by class and the  corresponding  hedged  liability  position  at March 31,
2001.


                                       8
<PAGE>

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

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                       Notional Amount
       Interest Rate Swaps               in Millions                                  Comments
       -------------------             ---------------                                --------
<S>                                        <C>              <C>
Floating to fixed-rate swaps               $8,841.5         Effectively converts the interest rate on an equivalent
                                                              amount of commercial paper and variable-rate senior notes
                                                              to a fixed-rate.

Fixed to floating-rate swaps                1,044.8         Effectively converts the interest rate on an equivalent
                                                              amount of fixed-rate senior notes to a variable-rate.

                                         ------------
Total interest rate swaps                  $9,886.3
                                         ============
</TABLE>

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

CIT also utilizes foreign exchange forward contracts and cross currency swaps to
hedge its net investments in foreign operations. At March 31, 2001, CIT is party
to cross-currency  interest rate swaps with a notional  principal amount of $1.0
billion.  The swaps hedge foreign currency risk and have maturities ranging from
2001 to 2019.  CIT also is party to foreign  currency  exchange  contracts  with
notional  amounts of $2.9 billion and  maturities  ranging from 2001 to 2004, to
hedge foreign currency risk.

Note 5 - Business Segment Information

The  following   table  presents   reportable   segment   information   and  the
reconciliation  of segment  balances  to the  consolidated  financial  statement
totals and the  consolidated  managed  assets total at or for the quarters ended
March 31, 2001 and 2000.  Goodwill  amortization  is allocated to Corporate  for
purposes of the table.  In 2001, we continued to transfer  various  assets among
our  business  units to  better  align  core  competencies,  gain  scale,  raise
efficiency  and  improve  profitability.  During the first  quarter of 2001,  we
transferred approximately $637.4 million of finance receivables,  $658.1 million
of operating  lease  equipment  and $329.3  million of  securitized  assets from
Equipment Financing to Vendor Technology Finance. In addition, $729.7 million of
finance  receivables,  $112.7  million of operating  lease  equipment and $926.2
million of  securitized  assets were  transferred  from  Equipment  Financing to
Specialty Finance and $315.6 million of finance receivables and $32.5 million of
operating lease equipment from Vendor Technology  Finance to Specialty  Finance.
Prior year  segment  balances  have not been  restated to conform to the current
year asset  transfers as it is impractical  to do so. Also,  during the quarter,
the "Consumer"  segment was renamed "Specialty  Finance",  which includes all of
the consumer  related  receivables  as well as certain  small ticket  commercial
financing and leasing assets.


                                       9
<PAGE>

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

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

<TABLE>
<CAPTION>
                           Equipment    Vendor
Dollars in Millions        Financing  Technology  Commercial  Structured  Specialty    Total               Consolidated
                          and Leasing   Finance    Finance     Finance*    Finance    Segments  Corporate*     Total
                          ----------- ----------- ----------  ----------  ---------   --------  ---------- ------------
<S>                          <C>         <C>         <C>         <C>         <C>       <C>        <C>       <C>
March 31, 2001
Operating revenue           $   218.8   $   149.5   $  125.8    $   34.4    $   94.4  $   622.9   $ (6.6)   $   616.3
Net income                       80.0        43.2       43.2        10.7        14.2      191.3    (31.2)       160.1
Total managed assets         22,026.8    11,857.3    7,995.3     2,871.3     9,242.7   53,993.4       -      53,993.4

March 31, 2000
Operating revenue           $   165.8   $   188.9   $  117.0    $   67.9    $   57.5  $   597.1   $ (9.8)   $   587.3
Net income                       64.4        28.2       35.8        38.0        13.8      180.2    (36.3)       143.9
Total managed assets         19,892.0    16,067.8    7,585.8     2,203.9     7,400.0   53,149.5       -      53,149.5
</TABLE>

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

*  The March 31, 2000  balances  are  conformed to include  Equity  Investments,
   which had been included with Corporate.

Note 6 - 1999 Restructuring Charge

The following  table  summarizes  the activity in the  restructuring  liability,
which resulted from the Newcourt acquisition.


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

<TABLE>
<CAPTION>
  Dollars in Millions                             Severance and
                                                      Other           Leasehold        Transaction
                                                  Termination        Termination        and Other
                                                      Costs             Costs              Costs            Total
                                                  -------------     ------------       ------------      -----------
<S>                                                <C>               <C>              <C>              <C>
  Balance at November 15, 1999                          $102.1            $24.5            $72.6            $199.2
     Cash payments                                       (48.1)              --            (38.0)            (86.1)
     Transaction fees paid in CIT stock                     --               --            (14.3)            (14.3)
     Non-cash adjustments                                   --               --             (2.5)             (2.5)
                                                    -----------      ------------      -----------      ------------
  Balance at December 31, 1999                            54.0             24.5             17.8              96.3
     Cash payments                                       (60.7)           (10.2)            (8.1)            (79.0)
     Additions                                             6.7               --               --               6.7
     Non-cash reductions                                    --             (2.4)            (6.2)             (8.6)
                                                    -----------      ------------      -----------      ------------
  Balance at December 31, 2000                              --             11.9              3.5              15.4
     Cash payments                                          --             (3.5)            (1.5)             (5.0)
                                                    -----------      ------------      -----------      ------------
  Balance at March 31, 2001                             $   --             $8.4            $ 2.0            $ 10.4
                                                    ===========      ============      ===========      ============
</TABLE>

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

Note 7 - Summarized Financial Information of Subsidiaries

The following table shows summarized  consolidated financial information for CIT
Holdings  LLC and its  wholly  owned  subsidiary,  Capita  Corporation.  CIT has
guaranteed  on a full and  unconditional  basis  the  existing  registered  debt
securities and certain other indebtedness of these subsidiaries.  Therefore, CIT
has


                                       10
<PAGE>

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

not presented  related  financial  statements or other information for these
subsidiaries on a stand-alone basis.

The following summarized  consolidated financial information reflects results as
of and for the quarter  ended  March 31,  2001 and also the  transfer of various
subsidiaries to other CIT entities.

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

Dollars in Millions                            Three Months Ended March 31, 2001
                                              ----------------------------------
                                                   CIT                  Capita
                                              Holdings LLC           Corporation
                                              -------------          -----------

Operating revenue                                 $  164.3            $  107.3
Operating expenses                                   106.5                73.8
                                                  --------            --------
Income before provision for income taxes          $   57.8            $   33.5
                                                  --------            --------
Net income                                        $   32.5            $   19.5
                                                  --------            --------

                                                       At March 31, 2001
                                              ----------------------------------
Assets
Cash and cash equivalents                         $  200.6            $  145.1
Financing and leasing assets                       6,676.8             4,922.3
Receivables from affiliates and other assets         853.5               190.0
                                                  --------            --------
Total assets                                      $7,730.9            $5,257.4
                                                  ========            ========
Liabilities and Shareholders' Equity
Liabilities:
   Debt                                           $4,108.0            $3,641.1
   Other                                             336.9               232.7
                                                  --------            --------
Total liabilities                                  4,444.9             3,873.8
Total shareholders' equity                         3,286.0             1,383.6
                                                  --------            --------
Total liabilities and shareholders' equity        $7,730.9            $5,257.4
                                                  ========            ========

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

Note 8 - Recent Accounting Pronouncements

During  September 2000, the FASB issued SFAS No. 140,  "Accounting for Transfers
and  Servicing  of  Financial  Assets  and   Extinguishments  of  Liabilities--a
replacement  of FASB Statement No. 125." SFAS No. 140 is effective for transfers
and servicing of financial assets and  extinguishments of liabilities  occurring
after March 31, 2001.  We do not expect the adoption of this  standard to affect
the accounting for, or the structure of, our securitization transactions.


                                       11
<PAGE>

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

In November 2000, the Emerging Issues Task Force of the FASB reached a consensus
on impairment accounting for retained beneficial interests ("EITF 99-20"). Under
this consensus, impairment on certain beneficial interests in securitized assets
must be recognized when the asset's fair value is below its carrying value,  and
it is probable  that there has been an adverse  change in estimated  cash flows.
Previously,  impairment on such assets was recognized when the asset's  carrying
value exceeded  estimated  cash flows  discounted at a risk free rate of return.
There was no impact on earnings of adopting EITF 99-20 on January 1, 2001.

Note 9 - Pending Merger

On  March  13,  2001,  Tyco   International  Ltd.  (NYSE:  TYC),  a  diversified
manufacturing  and service  company,  and CIT  announced a definitive  agreement
whereby  Tyco will acquire  CIT. As part of this  transaction,  Tyco has entered
into a purchase  agreement  with The  Dai-Ichi  Kangyo  Bank,  Limited for their
approximate 27% interest,  or 71 million shares,  at a price of $35.02, in cash,
per CIT share.  The remaining  shareholders  will receive 0.6907 Tyco shares for
each share of CIT in a tax-free,  stock-for-stock  exchange. The transaction was
valued at $35.02 per share to CIT shareholders,  or approximately  $9.2 billion,
based on Tyco's March 12, 2001 closing  stock price,  and is subject to approval
from various regulatory  agencies and CIT's  shareholders.  A special meeting of
CIT  shareholders  is scheduled  for May 23, 2001 to vote on the adoption of the
merger agreement. The expected date of closing is June 1, 2001. Thereafter,  CIT
will continue to file with the Securities and Exchange  Commission as a separate
registrant with respect to its public debt.


                                       12
<PAGE>

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

OVERVIEW

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

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

<TABLE>
<CAPTION>
                                                                          Three Months Ended
                                                                               March 31,
                                                                --------------------------------------
                                                                     2001                  2000
                                                                ----------------     -----------------
<S>                                                                  <C>                  <C>
Net income (dollars in millions)                                     $160.1               $143.9
Earnings per diluted share (EPS)                                     $ 0.61               $ 0.55
EPS, excluding goodwill amortization                                 $ 0.68               $ 0.62
Return on average stockholders' equity* (ROE)                         10.6%                10.3%
ROE, excluding goodwill amortization*                                 11.9%                11.6%
Return on average tangible stockholders' equity* (ROTE)               15.6%                15.3%
Return on average earning assets (ROA)                                1.54%                1.48%
ROA, excluding goodwill amortization                                  1.73%                1.66%
</TABLE>

--------------------------------------------------------------------------------
*  Stockholders'  equity  excludes  the  impact  of the  accounting  change  for
   derivative  financial  instruments  described  in  Note  4 to  the  condensed
   consolidated financial statements.

First quarter 2001 net income and earnings per share increased approximately 11%
from the prior year first quarter.  These favorable comparisons reflect improved
finance margins and stable operating expenses, partially offset by lower venture
capital gains and increased credit losses.


                                       13
<PAGE>

NET FINANCE MARGIN

A comparison of 2001 and 2000 net finance  income and net finance  margin is set
forth below.

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

<TABLE>
<CAPTION>
                                                Three Months Ended
                                          -------------------------------
                                                      March 31,                             Increase
                                          ---------------------------------         ------------------------
Dollars in Millions                           2001                 2000               Amount         Percent
                                          ------------         ------------         ----------       --------
<S>                                       <C>                  <C>                  <C>                <C>
Finance income                            $    1,376.8         $    1,228.8         $    148.0         12.0%
Interest expense                                 625.7                571.9               53.8          9.4
                                          ------------         ------------         ----------         ----
Net finance income                               751.1                656.9               94.2         14.3
Depreciation on operating lease
   Equipment                                     346.4                307.8               38.6         12.5
                                          ------------         ------------         ----------         ----
Net finance margin                        $      404.7         $      349.1         $     55.6         15.9%
                                          ============         ============         ==========         ====

Average earning assets ("AEA")            $   41,635.3         $   38,968.1         $  2,667.2          6.8%

Net finance income as a % of AEA                 7.22%                6.74%
Net finance margin as a % of AEA                 3.89%                3.58%
</TABLE>

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

Net finance margin  increased 15.9% to $404.7 million for the three months ended
March  31,  2001 from the same  period in 2000.  The  increase  reflects  higher
margins,  as well as growth from last year in our financing and leasing  assets.
As a percentage of AEA, net finance margin  increased to 3.89% at March 31, 2001
from 3.58% at March 31, 2000, primarily reflecting lower short-term rates in the
funding of short-term fixed rate receivable  flows,  improved pricing in certain
markets and higher  renewal  levels as existing  leases  expire.  The  increased
margin was partially  offset by lower margins on floating rate business  because
our floating rate assets reprice faster than our floating rate liabilities,  and
the impact is amplified when rates decrease rapidly.

Finance  income for the three  months  ended  March 31,  2001  increased  $148.0
million or 12.0% to $1,376.8  million  from the  comparable  2000  period.  As a
percentage  of AEA,  finance  income  (excluding  interest  income  relating  to
short-term  interest-bearing  deposits)  was 13.03% for the first  quarter ended
March 31, 2001, compared to 12.46% for the same quarter of 2000.

Interest  expense for the three  months  ended March 31,  2001  increased  $53.8
million  or 9.4%  from the  comparable  2000  period.  As a  percentage  of AEA,
interest expense  (excluding  interest  relating to short-term  interest-bearing
deposits and dividends  related to preferred  capital  securities) for the first
quarter of 2001 increased to 5.81% from 5.72%.


                                       14
<PAGE>

The  operating  lease  equipment  portfolio  was $7.2  billion at March 31, 2001
versus $6.5 billion at March 31, 2000.  Operating  lease margin  (rental  income
less  depreciation  expense) was 7.2% for the first  quarter of 2001 compared to
6.7% for the prior year quarter.  Depreciation  on operating lease equipment was
$346.4  million in 2001,  versus  $307.8  million in 2000.  As a  percentage  of
average operating leases,  annualized  depreciation  expense was 19.4% and 19.7%
for the quarters ended March 31, 2001 and 2000,  respectively.  Our  depreciable
assets  range from  smaller-ticket  (computers,  etc.),  shorter-term  leases to
larger-ticket (airline and rail assets), longer-term leases.

We seek to mitigate interest rate risk by matching the repricing characteristics
of our assets  with our  liabilities,  which is done in part  through the use of
derivative financial instruments,  principally interest rate swaps. The notional
amounts of interest  rate swaps were $9.9 billion at March 31,  2001,  primarily
reflecting our strategy to match fund fixed-rate receivables by issuing floating
interest  rate  debt and  swapping  it into  fixed  rate.  See  "Liquidity  Risk
Management" for further discussion.

A  comparative  analysis  of the  weighted  average  principal  outstanding  and
interest  rates paid on our debt  before and after the effect of  interest  rate
swaps is shown in the following table.

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

<TABLE>
<CAPTION>
Dollars in Millions                                                Three Months Ended March 31, 2001
                                                   ----------------------------------------------------------------
                                                           Before Swaps                        After Swaps
                                                   ------------------------------     -----------------------------
<S>                                                    <C>              <C>               <C>              <C>
Commercial paper and variable rate
   senior notes                                        $21,452.0        5.92%             $14,656.8        6.00%
Fixed rate senior and subordinated notes                17,411.6        6.84%              24,206.8        6.83%
                                                    --------------                     ---------------
Composite                                              $38,863.6        6.33%             $38,863.6        6.52%
                                                    ==============                     ===============
                                                                   Three Months Ended March 31, 2001
                                                   ------------------------------------------------------------------
                                                           Before Swaps                        After Swaps
                                                   ------------------------------     -------------------------------
Commercial paper and variable rate
   senior notes                                        $18,556.3        6.05%             $15,242.6        6.28%
Fixed rate senior and subordinated notes                17,764.1        6.66%              21,077.8        6.53%
                                                    --------------                     ---------------
Composite                                              $36,320.4        6.35%             $36,320.4        6.43%
                                                    ==============                     ===============
</TABLE>

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

The weighted average composite  interest rate after swaps in each of the periods
presented  increased  from the composite  interest  rate before swaps  primarily
because a larger  proportion  of our debt,  after giving effect to interest rate
swaps, was subject to a fixed interest rate. 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.


                                       15
<PAGE>

OTHER REVENUE

We continue to emphasize growth and  diversification  of our other  "non-spread"
revenues to improve our overall  profitability.  Other  revenue,  while  strong,
decreased  to $211.6  million  during  the first  quarter of 2001,  from  $238.2
million during the same period in 2000  principally due to lower venture capital
gains, as set forth in the following table.

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

                                                     Three Months Ended
                                                          March 31,
                                              ---------------------------------
Dollars in Millions                                2001                2000
                                              --------------      -------------

Fees and other income                            $106.6              $121.4
Gains on securitizations                           37.4                19.0
Factoring commissions                              36.7                38.5
Gains on sales of leasing equipment                26.0                21.8
Gains on venture capital investments                4.9                37.5
                                              --------------      -------------
Total other revenue                              $211.6              $238.2
                                              ==============      =============

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

Fees and other  income  declined  in 2001 due to lower  syndication  fees in our
Structured Finance segment.  Fees and other income includes  miscellaneous fees,
syndication  fees and gains from  receivable  sales.  Securitization  gains were
$37.4 million or 14.5% of pretax  income on $1.1 billion of volume  securitized,
versus $19.0 million (8.2%) on $0.7 billion in the first quarter of 2000.  Gains
on equipment  sales  increased due to the higher volume of equipment  coming off
lease as a result  of the  larger  operating  lease  portfolio.  Due to the weak
economic  conditions in the public equity  markets,  venture  capital gains were
$4.9  million for the first  quarter of 2001  compared to $37.5  million for the
prior year quarter.

SALARIES AND GENERAL OPERATING EXPENSES

Salaries and general operating expenses were $263.5 million in the first quarter
of 2001 down from  $268.2  million in the  comparable  2000  period,  reflecting
expense  reductions  resulting from the  integration of Newcourt.  Headcount was
7,470 at quarter end compared to 7,650 at March 31, 2000.


                                       16
<PAGE>

Management  monitors  productivity  via the  efficiency  ratio  and the ratio of
salaries and general operating expenses to average managed assets ("AMA").  Both
of these annualized  ratios,  which exclude goodwill  amortization,  improved in
2001 as set forth in the following table.

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

                                                      Three Months Ended
                                                           March 31,
                                             ----------------------------------
                                                  2001                2000
                                             --------------     ---------------

Efficiency ratio                                 43.1%               46.0%
Salaries and general operating
  expenses as a percentage of AMA                2.03%               2.15%

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

GOODWILL AMORTIZATION

Goodwill  amortization  was $22.5  million in 2001 versus $20.5 million in 2000.
Goodwill is being amortized on a straight-line  basis over periods not exceeding
25 years from the acquisition dates.

PROVISION AND RESERVE FOR CREDIT LOSSES/CREDIT QUALITY

The provision for credit losses for the first quarter of 2001 was $68.3 million,
up from $61.6 million in the first quarter of 2000,  reflecting  higher 2001 net
credit losses.

For the  quarter  ended March 31,  2001,  net credit  losses were $66.7  million
(0.80% of average  finance  receivables)  compared  to $53.0  million  (0.67% of
average finance  receivables) for the same period last year. The increase in net
credit losses as a percentage of average finance  receivables  reflects  product
mix changes and the weaker 2001 economy.


                                       17
<PAGE>

The following table sets forth our net charge-off experience, in amount and as a
percentage of average finance receivables (annualized).

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

<TABLE>
<CAPTION>
                                                                       Three Months Ended March 31,
                                                    ---------------------------------------------------------------
Dollars in Millions                                             2001                                2000
                                                     ----------------------------        -------------------------
<S>                                                  <C>                    <C>          <C>                 <C>
Equipment Financing and Leasing *                    $    22.0              0.71%        $   14.3            0.45%
Vendor Technology Finance *                                8.2              0.53             13.3            0.76
Commercial Finance                                         7.0              0.36             10.5            0.59
Structured Finance                                         4.1              0.89               --              --
Specialty Finance - small ticket commercial
 assets *                                                 10.3              4.62               --              --
                                                     ---------           --------         -------          -------
Total Commercial                                          51.6              0.71             38.1            0.55
Specialty Finance - consumer *                            15.1              1.42             14.9            1.48
                                                     ---------           --------         -------          -------
Total                                                $    66.7              0.80%        $   53.0            0.67%
                                                     =========           ========         =======          =======
</TABLE>

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

*  March 31, 2000 balances are not  conformed  for current year asset  transfers
   described in Note 5 to the condensed consolidated financial statements.

Commercial  net credit losses  increased from 0.55% in 2000 to 0.71% in 2001 due
mainly to higher  charge-offs in the trucking  portfolio in Equipment  Financing
and Leasing  and in the  telecommunications  portfolio  in  Structured  Finance.
Consumer  net credit  losses were 1.42%  compared to 1.48% for the three  months
ended March 31, 2001 and 2000,  respectively,  reflecting  product mix  changes.
Certain small ticket  commercial  assets  transferred to Specialty  Finance have
charge-off rates that are high in relation to other CIT portfolios.

The reserve for credit losses is periodically  reviewed for adequacy considering
economic conditions,  collateral values and credit quality indicators, including
charge-off  experience,  and levels of past due loans and non-performing assets.
All  portfolios  are provided for at different  reserve levels based on our risk
assessment.   The  reserve   decreased  to  $462.0  million  (1.39%  of  finance
receivables)   at  March  31,  2001  from  $468.5   million  (1.40%  of  finance
receivables)  at  December  31,  2000  and  $476.2  million  (1.43%  of  finance
receivables) at March 31, 2000. The reserve dollar decrease from year end is due
to the lower level of finance  receivables,  reflecting  sales of  non-strategic
assets,  a decline in portfolio  purchases  and lower  origination  volume.  The
reserve  percentage  decrease  from year end 2000 is due to  seasonal  growth in
factoring  receivables  in the first  quarter,  which we do not provision due to
their  short-term nature, while the year over year decline is due to product mix
changes.


                                       18
<PAGE>

PAST DUE AND NON-PERFORMING ASSETS

The  following  table sets forth  certain  information  concerning  past due and
non-performing  assets (and the related  percentages of finance  receivables) at
March 31, 2001 and December 31, 2000.

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

<TABLE>
<CAPTION>
Dollars in Millions                                     At March 31, 2001                  At December 31, 2000
                                                  -------------------------------     -------------------------------
<S>                                                 <C>                <C>                <C>              <C>
Finance receivables, past due 60 days or more:
    Equipment Financing and Leasing *                 $377.1           3.10%              $399.8           2.88%
    Vendor Technology Finance *                        181.4           2.94                184.9           3.07
    Commercial Finance                                 105.0           1.31                107.9           1.40
    Structured Finance                                 117.7           6.13                 96.2           5.59
    Specialty Finance - small ticket
     commercial assets *                               101.7          11.96                   --             --
                                                  ------------      ------------      ------------      ------------
    Total Commercial                                   882.9           3.03                788.8           2.69
    Specialty Finance - consumer *                     199.7           4.76                211.1           5.03
                                                  ------------      ------------      ------------      ------------
    Total                                           $1,082.6           3.25%              $999.9           2.98%
                                                  ============      ============      ============      ============
Non-performing assets:
    Equipment Financing and Leasing *                 $349.2           2.87%              $351.0           2.53%
    Vendor Technology Finance *                         79.5           1.29                 93.9           1.56
    Commercial Finance                                  67.9           0.85                 65.3           0.85
    Structured Finance                                 130.0           6.77                118.6           6.90
    Specialty Finance - small ticket
     commercial assets *                                84.1           9.89                   --             --
                                                  ------------      ------------      ------------      ------------
    Total Commercial                                   710.7           2.44                628.8           2.15
    Specialty Finance - consumer *                     187.6           4.47                199.3           4.75
                                                  ------------      ------------      ------------      ------------
    Total                                             $898.3           2.70%              $828.1           2.47%
                                                  ============      ============      ============      ============
</TABLE>

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

*  December 31, 2000 balances are not conformed for current year asset transfers
   described in Note 5 to the condensed consolidated financial statements.

Non-performing assets reflect both finance receivables on non-accrual status and
assets received in satisfaction of loans.

Past dues and  non-performing  accounts increased from the fourth quarter due to
the softer  economy.  Even  though  the dollar  amounts  declined  in  Equipment
Financing and Leasing, the percentage increased due to the asset transfers.  The
largest  part of the past due increase is due to certain  `administrative'  past
dues in a newly  acquired  program  and  slower  payment  patterns,  notably  in
trucking.  In addition,  aerospace was up slightly.  The Structured Finance past
due and  non-performing  increase was  primarily  due to the  telecommunications
portfolio.  Certain  assets  transferred  to  Specialty  Finance - small  ticket
commercial  assets  are  higher  risk;  therefore  past dues and  non-performing
balances are generally higher.


                                       19
<PAGE>

INCOME TAXES

The  effective  income tax rate for the first  quarter of 2001 was 37.8%  versus
38.0% and 37.9% for the first quarter and full year 2000, respectively.

FINANCING AND LEASING ASSETS

Managed   assets,   comprised  of  financing  and  leasing  assets  and  finance
receivables  previously  securitized  that we continue to manage,  totaled $54.0
billion at March 31, 2001, down from $54.9 billion at year end 2000, and up from
$53.1 billion at March 31, 2000.  Owned financing and leasing  portfolio  assets
totaled  $43.5  billion at March 31, 2001  compared to $43.8 billion at December
31, 2000,  and $42.8 billion at March 31, 2000.  The lower asset levels at March
31, 2001  reflect our focus on managing  down our leverage  ratios  coupled with
disciplined  pricing  and a lower  level of  originations,  as we  continued  to
de-emphasize lower return  businesses.  Volume was $5.1 billion for the quarter,
down from $6.3  billion last quarter and $6.8 billion for the prior year quarter
due to a lower level of portfolio  purchases,  the exiting of certain low-return
programs and the effects of the slower economic environment. During the quarter,
over $300 million of  non-strategic  receivables,  which did not meet our return
criteria, were sold at amounts that approximate book value. We will continue our
on-going review of non-strategic businesses.


                                       20
<PAGE>

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

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

<TABLE>
<CAPTION>
                                                                                                    Change
                                                           March 31,     December 31,     ---------------------------
Dollars in Millions                                          2001            2000           Amount          Percent
                                                         ------------    ------------     -----------     -----------
<S>                                                        <C>            <C>              <C>            <C>
Equipment Financing:
   Finance receivables (1)                                 $10,396.9      $12,153.7        $(1,756.8)        (14.5)%
   Operating lease equipment, net (1)                        1,520.8        2,280.7           (759.9)        (33.3)
                                                         ------------    -----------      -----------     -----------
Total                                                       11,917.7       14,434.4         (2,516.7)        (17.4)
                                                         ------------    -----------      -----------     -----------
Capital Finance:
   Finance receivables                                       1,722.9        1,863.1           (140.2)         (7.5)
   Operating lease equipment, net                            3,632.1        3,594.6             37.5           1.0
   Liquidating portfolio (2)                                   171.7          185.9            (14.2)         (7.6)
                                                         ------------    -----------      -----------     -----------
Total                                                        5,526.7        5,643.6           (116.9)         (2.1)
                                                         ------------    -----------      -----------     -----------
Total Equipment Financing and Leasing Segment               17,444.4       20,078.0         (2,633.6)        (13.1)
                                                         ------------    -----------      -----------     -----------
Vendor Technology Finance:
   Finance receivables (1)                                   6,910.4        6,864.5             45.9           0.7
   Operating lease equipment, net (1)                        1,849.0        1,256.5            592.5          47.2
                                                         ------------    -----------      -----------     -----------
Total Vendor Technology Finance Segment                      8,759.4        8,121.0            638.4           7.9
                                                         ------------    -----------      -----------     -----------
Commercial Services                                          4,434.3        4,277.9            156.4           3.7
Business Credit                                              3,561.0        3,415.8            145.2           4.3
                                                         ------------    -----------      -----------     -----------
Total Commercial Finance Segment                             7,995.3        7,693.7            301.6           3.9
                                                         ------------    -----------      -----------     -----------
Structured Finance:
   Finance receivables                                       2,507.0        2,347.3            159.7           6.8
   Operating lease equipment, net                               54.9           58.8             (3.9)         (6.6)
   Equity Investments                                          309.4          285.8             23.6           8.3
                                                         ------------    -----------      -----------     -----------
Total Structured Finance Segment                             2,871.3        2,691.9            179.4           6.7
                                                         ------------    -----------      -----------     -----------
Specialty Finance:
   Consumer                                                  5,071.8        4,901.8            170.0           3.5
   Small ticket commercial assets (1) (3)                    1,056.3             -           1,056.3         100.0
   Liquidating portfolio (4)                                   254.5          298.2            (43.7)        (14.7)
                                                         ------------    -----------      -----------     -----------
Total Specialty Finance Segment                              6,382.6        5,200.0          1,182.6          22.7
                                                         ------------    -----------      -----------     -----------
TOTAL FINANCING AND LEASING PORTFOLIO ASSETS                43,453.0       43,784.6           (331.6)         (0.8)
                                                         ------------    -----------      -----------     -----------
Finance receivables previously securitized and
 still managed by us:
   Commercial                                                8,605.7        9,075.9           (470.2)         (5.2)
   Consumer                                                  1,502.1        1,582.7            (80.6)         (5.1)
   Consumer liquidating portfolio (4)                          432.6          457.7            (25.1)         (5.5)
                                                         ------------    -----------      -----------     -----------
Total                                                       10,540.4       11,116.3           (575.9)         (5.2)
                                                         ------------    -----------      -----------     -----------
TOTAL MANAGED ASSETS                                       $53,993.4      $54,900.9          $(907.5)         (1.7)%
                                                         ============    ===========      ===========     ===========
</TABLE>

--------------------------------------------------------------------------------
(1) Prior year balances are not  conformed  for current year asset  transfers as
    detailed in Note 5 to the condensed consolidated financial statements.

(2) Ocean going maritime and project finance receivables.

(3) Includes $129.9 million of operating lease equipment.

(4) Recreational boat and wholesale loan receivables.


                                       21
<PAGE>

CONCENTRATIONS

Financing and Leasing Assets Composition

Our ten largest  financing and leasing  asset  accounts at March 31, 2001 in the
aggregate  accounted for 3.6% 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>
 Dollars in Millions            At March 31, 2001                  At December 31, 2000
                            -----------------------------      ----------------------------
                              Amount           Percent           Amount          Percent
                            ------------   ---------------   --------------   -------------
<S>                          <C>                <C>              <C>              <C>
  United States:
     Northeast               $ 8,764.5          20.3%            $ 9,099.3         20.8%
     West                      8,440.9          19.4               8,336.9         19.0
     Midwest                   7,696.6          17.7               7,723.1         17.6
     Southeast                 6,156.5          14.2               6,228.6         14.2
     Southwest                 5,148.9          11.8               4,940.3         11.4
                            -------------    -----------       -------------   -----------
  Total United States         36,207.4          83.4              36,328.2         83.0
                            -------------    -----------       -------------   -----------
  Foreign:
     Canada                    2,104.7           4.8               2,357.4          5.4
     Other                     5,140.9          11.8               5,099.0         11.6
                            -------------    -----------       -------------   -----------
  Total foreign                7,245.6          16.6               7,456.4         17.0
                            -------------    -----------       -------------   -----------
  Total                      $43,453.0         100.0%            $43,784.6        100.0%
                            =============    ===========       =============   ===========
</TABLE>

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

At March 31,  2001,  our  managed  asset  geographic  diversity  does not differ
significantly from our owned asset geographic diversity.

Our financing and leasing asset portfolio in the United States is diversified by
state.  At March 31, 2001,  with the  exception  of  California  (10.7%),  Texas
(8.3%),  and New York (6.7%),  no state  represented more than 4.1% of financing
and leasing assets.  Our managed and owned asset geographic  composition did not
significantly  differ  from our  December  31,  2000  managed  and  owned  asset
geographic composition.

Financing and leasing assets to foreign  obligors  totaled $7.2 billion at March
31, 2001. After Canada, $2.1 billion (4.8% of financing and leasing assets), the
largest  foreign  exposures were England,  $1.2 billion  (2.7%),  and Australia,
$353.5  million  (0.8%).  Our  remaining  foreign  exposure  was


                                       22
<PAGE>

geographically dispersed, with no other individual country exposure greater than
0.8% of financing and leasing assets.

Financing  and  leasing  assets to  foreign  obligors  totaled  $7.5  billion at
December 31, 2000.  After  Canada,  $2.4 billion  (5.4% of financing and leasing
assets),  the largest foreign exposures were England,  $1.2 billion (2.8%),  and
Australia,   $399.6  million  (0.9%).   Our  remaining   foreign   exposure  was
geographically dispersed, with no other individual country exposure greater than
0.8% of financing and leasing assets.

Industry Composition

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

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

<TABLE>
<CAPTION>
  Dollars in Millions                         At March 31, 2001                  At December 31, 2000
                                         -----------------------------      -------------------------------
                                            Amount           Percent           Amount            Percent
                                         --------------   -------------     ------------      -------------
<S>                                       <C>              <C>                <C>              <C>
  Manufacturing (1)
      (none greater than 2.9%)            $ 8,944.1          20.6%            $ 8,787.2           20.1%
  Retail (2)                                4,423.8          10.2               4,211.3            9.6
  Transportation (3)                        3,454.8           7.9               3,431.0            7.8
  Commercial airlines                       3,389.3           7.8               3,557.2            8.1
  Home mortgage                             2,529.5           5.8               2,451.7            5.6
  Construction equipment                    2,418.3           5.6               2,697.8            6.2
  Service industries                        1,897.1           4.4               1,987.1            4.5
  Manufactured housing                      1,852.1           4.3               1,802.1            4.1
  Communications                            1,398.7           3.2               1,496.7            3.4
  Wholesaling                               1,353.6           3.1               1,445.0            3.3
  Other (none greater than 1.7%)           11,791.7          27.1              11,917.5           27.3
                                       --------------    -------------      -------------     -------------
    Total                                 $43,453.0         100.0%            $43,784.6          100.0%
                                       ==============    =============      =============     =============
</TABLE>

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

(2)  Includes retailers of apparel (4.1%) and general merchandise (2.5%).

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

LIQUIDITY RISK MANAGEMENT

Liquidity  risk refers to the risk of CIT being  unable to meet  potential  cash
outflows promptly and cost effectively.  Factors that could cause such a risk to
arise might be a disruption of a securities  market or other source of funds. We
actively manage and mitigate liquidity risk by maintaining  diversified  sources
of funding.  The primary funding sources are commercial paper (U.S.,  Canada and
Australia),  medium-term  notes  (U.S.,  Canada  and  Europe)  and  asset-backed
securities  (U.S. and Canada).  We also maintain  committed bank lines of credit
aggregating  $8.5  billion to provide  back-stop  support  of  commercial  paper
borrowings and  approximately  $247.4 million of local bank lines to support our
international  operations.  Additional  sources of liquidity  are loan and lease
payments from  customers  and wholeloan  sales,


                                       23
<PAGE>

syndications  and  asset-backed  receivable  conduits.  At March 31, 2001,  $2.5
billion of registered,  but unissued,  debt securities  remained available under
shelf registration  statements,  including $2.0 billion of European  Medium-Term
Notes.  On April 3, 2001 we closed a $20  billion  U.S.  medium  term note shelf
registration filing.

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

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

                                           Short Term              Long Term
                                           ----------              ---------
  Moody's                                      P-1                    A1
  Standard & Poor's                            A-1                    A+
  Fitch                                        F1                     A+
  Dominion Bond Rating Service              R-1 (mid)              A (high)

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

In connection  with the pending Tyco  acquisition  of CIT,  CIT's credit ratings
have been  reviewed by the rating  agencies  as  follows:  Standard & Poor's has
re-affirmed the short and long-term ratings, Fitch has taken no action, Moody's
has re-affirmed the short-term  rating and has placed the long-term rating under
review, and Dominion Bond Rating Service has placed both the short and long-term
ratings under review.

As  part  of  our  continuing  program  of  accessing  the  public  and  private
asset-backed  securitization  markets as an additional liquidity source, general
equipment finance  receivables of $1.1 billion were securitized during the first
quarter of 2001.  At March 31,  2001,  we had $7.7  billion of  registered,  but
unissued,  securities  available  under  public  shelf  registration  statements
relating to our asset-backed securitization program.

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


                                       24
<PAGE>

Capitalization

The following table presents information regarding our capital structure.

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

<TABLE>
<CAPTION>
                                                                          At March 31,            At December 31,
Dollars in Millions                                                           2001                     2000
                                                                       ------------------        -----------------
<S>                                                                       <C>                      <C>
Commercial paper                                                          $  9,662.9               $  9,063.5
Term debt                                                                   28,055.3                 28,901.6
Company-obligated mandatorily redeemable preferred
   securities of subsidiary trust holding solely debentures
   of the Company ("Preferred Capital Securities")                             250.0                    250.0
Stockholders' equity *                                                       6,135.8                  6,007.2
                                                                       ------------------        -----------------
Total capitalization                                                        44,104.0                 44,222.3
Goodwill                                                                     1,942.1                  1,964.6
                                                                       ------------------        -----------------
Total tangible capitalization                                              $42,161.9                $42,257.7
                                                                       ==================        =================
Tangible stockholders' equity* and Preferred
   Capital Securities to managed assets                                      8.23%                    7.82%
Total debt (excluding overnight deposits) to tangible
   stockholders' equity* and Preferred Capital Securities                    8.41x                    8.78x
Total debt (excluding overnight deposits) to stockholders' equity*
   and Preferred Capital Securities                                          5.86x                    6.02x
</TABLE>

--------------------------------------------------------------------------------
*    Stockholders'  equity  excludes  the  impact of the  accounting  change for
     derivative  financial  instruments  described  in  Note 4 to the  condensed
     consolidated financial statements.


                                       25
<PAGE>

STATISTICAL DATA

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

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

<TABLE>
<CAPTION>
                                                                   For the Three Months
                                                                      Ended March 31,
                                                               ---------------------------
                                                                  2001            2000
                                                                --------        ---------
<S>                                                               <C>            <C>
Finance income *                                                  13.03%         12.46%
Interest expense *                                                 5.81           5.72
                                                                -----------    -----------
Net finance income                                                 7.22           6.74
Depreciation on operating lease equipment                          3.33           3.16
                                                                -----------    -----------
Net finance margin                                                 3.89           3.58
Other revenue                                                      2.03           2.45
                                                                -----------    -----------
Operating revenue                                                  5.92           6.03
                                                                -----------    -----------
Salaries and general operating expenses                            2.53           2.75
Provision for credit losses                                        0.65           0.63
Goodwill amortization                                              0.22           0.21
Minority interest in subsidiary trust holding solely
   debentures of the Company                                       0.05           0.05
                                                                -----------    -----------
Operating expenses                                                 3.45           3.64
                                                                -----------    -----------
Income before provision for income taxes                           2.47           2.39
Provision for income taxes                                         0.93           0.91
                                                                -----------    -----------
Net income                                                         1.54%          1.48%
                                                                ===========    ===========
Average earning assets (dollars in millions)                     $41,635.3      $38,968.1
                                                                ===========    ===========
</TABLE>

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


                                       26
<PAGE>

                           PART II. OTHER INFORMATION

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

          None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibit 12 - Computation of Ratios of Earnings to Fixed Charges.

     (b)  A Form 8-K report dated January 25, 2001 was filed with the Commission
          reporting the Company's announcement of financial results for the year
          ended December 31, 2000, and the  declaration of a quarterly  dividend
          for the quarter ended December 31, 2000.

          A Form 8-K report  dated March 12, 2001 was filed with the  Commission
          announcing  the  Agreement  and Plan of  Merger  by and  between  Tyco
          Acquisition XIX (NV) and The CIT Group, Inc.


                                       27
<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: May 14, 2001


                                       28
<PAGE>

                                                                      EXHIBIT 12

                      THE CIT GROUP, INC. AND SUBSIDIARIES
               COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

                              (Dollars in Millions)

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

<TABLE>
<CAPTION>
                                                                        For the Three Months Ended
                                                                                 March 31,
                                                                   -----------------------------------
                                                                        2001                2000
                                                                   ----------------    ---------------
<S>                                                                    <C>                 <C>
Net income                                                             $160.1              $143.9

Provision for income taxes                                               97.1                88.3
                                                                   ----------------    ---------------
Earnings before provision for income taxes                              257.2               232.2
                                                                   ----------------    ---------------
Fixed charges:
    Interest and debt expense on indebtedness                           625.7               571.9
    Minority interest in subsidiary trust holding solely
        debentures of the Company                                         4.8                 4.8
    Interest factor - one third of rentals on real and
        personal properties                                               4.6                 6.0
                                                                   ----------------    ---------------
Total fixed charges                                                     635.1               582.7
                                                                   ----------------    ---------------
Total earnings before provision for income taxes
   and fixed charges                                                   $892.3              $814.9
                                                                   ================    ===============
Ratios of earnings to fixed charges                                     1.40x               1.40x
                                                                   ================    ===============
</TABLE>

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