NOTE 13 — BUSINESS SEGMENT INFORMATION

Management's Policy in Identifying Reportable Segments

CIT's reportable segments are comprised of strategic business units that are aggregated into segments primarily based upon industry categories and to a lesser extent, the core competencies relating to product origination, distribution methods, operations and servicing and the nature of their regulatory environment. This segment reporting is consistent with the presentation of financial information to management.

Types of Products and Services

CIT has five reportable segments: Corporate Finance, Transportation Finance, Trade Finance, Vendor Finance and Consumer. Corporate Finance and Trade Finance offer secured lending and receivables collection as well as other financial products and services to small and midsize companies. These include secured revolving lines of credit and term loans, credit protection, accounts receivable collection, import and export financing and factoring, debtor-in-possession and turnaround financing and management advisory services. Transportation Finance offers secured lending and leasing products to midsize and larger companies across the aerospace, rail and defense industries. Vendor Finance partners with manufacturers and distributors to offer secured lending and leasing products predominantly to small and mid-size companies primarily in information technology, telecommunication and office equipment markets. Consumer includes a liquidating portfolio of predominately government-guaranteed student loans and certain consumer loans of CIT Bank.

Segment Profit and Assets

The Company refined its expense and capital allocation methodologies during the first quarter of 2011. For 2011, Corporate and other includes certain costs that had been previously allocated to the segments, including prepayment penalty fees on high-cost debt payments and certain corporate liquidity costs. In addition, the Company refined the capital and interest allocation methodologies for the segments. These changes had the most impact on Transportation Finance given the capital requirements for their forward-purchase commitments and reduced the interest expense charged to this segment. On a comparable basis, pre-tax income for Transportation Finance would have been approximately $67 million for the quarter ended June 30, 2010 and $140 million for the six months then ended. These increases would be offset by decreases in Corporate and Other for the respective periods. The refinement was not significant to the other segments. The 2010 balances are reflected as originally reported and are not conformed to the 2011 presentation.

Corporate and Other includes cash liquidity in excess of the amount required by the business units that management determines is prudent for the overall company and the prepayment penalty fees associated with debt repayments.

The following table presents reportable segment information and the reconciliation of segment balances to consolidated financial statements:

Business Segments (dollars in millions)

	Corporate	Trans-portation	Trade	Vendor	Commercial		Total	Corporate
	Finance	Finance	Finance	Finance	Segments	Consumer	Segments	and Other	Total
For the quarter ended June 30, 2011
Total interest income	$ 270.9	$ 44.5	$ 17.9	$ 195.1	$ 528.4	$ 68.9	$ 597.3	$ 4.8	$ 602.1
Total interest expense	(212.0)	(250.8)	(29.5)	(145.5)	(637.8)	(48.7)	(686.5)	(119.2)	(805.7)
Provision for credit losses	(61.3)	(4.7)	(4.0)	(13.8)	(83.8)	(0.9)	(84.7)	0	(84.7)
Rental income on operating leases	5.5	339.5	0	72.9	417.9	0	417.9	0	417.9
Other income, excluding rental income	118.2	33.0	42.8	50.8	244.8	3.1	247.9	(8.0)	239.9
Depreciation on operating lease equipment	(3.0)	(86.7)	0	(55.8)	(145.5)	0	(145.5)	0	(145.5)
Other expenses	(66.9)	(37.4)	(26.4)	(82.1)	(212.8)	(15.5)	(228.3)	(17.5)	(245.8)
Income (loss) before provision (benefit) for income taxes	$ 51.4	$ 37.4	$ 0.8	$ 21.6	$ 111.2	$ 6.9	$ 118.1	$ (139.9)	$ (21.8)

For the quarter ended June 30, 2010
Total interest income	$ 494.7	$ 57.8	$ 24.4	$ 345.2	$ 922.1	$ 96.7	$ 1,018.8	$ 5.0	$ 1,023.8
Total interest expense	(276.0)	(234.3)	(49.5)	(190.4)	(750.2)	(59.4)	(809.6)	2.1	(807.5)
Provision for credit losses	(95.2)	(3.0)	(12.3)	(111.9)	(222.4)	(9.3)	(231.7)	(15.0)	(246.7)
Rental income on operating leases	7.3	315.0	0	96.1	418.4	0	418.4	(0.5)	417.9
Other income, excluding rental income	206.4	18.2	51.4	33.2	309.2	18.3	327.5	11.0	338.5
Depreciation on operating lease equipment	(5.1)	(85.9)	0	(87.4)	(178.4)	0	(178.4)	0.3	(178.1)
Other expenses	(90.3)	(45.5)	(33.0)	(86.3)	(255.1)	(22.7)	(277.8)	0	(277.8)
Income (loss) before provision (benefit) for income taxes	$ 241.8	$ 22.3	$ (19.0)	$ (1.5)	$ 243.6	$ 23.6	$ 267.2	$ 2.9	$ 270.1


	Corporate		Trans-portation		Trade		Vendor		Commercial				Total		Corporate
	Finance		Finance		Finance		Finance		Segments		Consumer		Segments		and Other		Total
For the six months ended June 30, 2011
Total interest income	$ 569.6		$ 87.0		$ 35.0		$ 403.4		$ 1,095.0		$ 139.7		$ 1,234.7		$ 10.6		$ 1,245.3
Total interest expense	(408.8)		(461.3)		(55.2)		(278.5)		(1,203.8)		(101.7)		(1,305.5)		(199.1)		(1,504.6)
Provision for credit losses	(135.8)		(6.5)		(7.3)		(56.7)		(206.3)		(1.8)		(208.1)		0		(208.1)
Rental income on operating leases	12.0		664.2		0		155.0		831.2		0		831.2		0		831.2
Other income, excluding rental income	282.0		57.3		79.9		82.4		501.6		6.2		507.8		10.3		518.1
Depreciation on operating lease equipment	(5.9)		(183.4)		0		(116.7)		(306.0)		0		(306.0)		0		(306.0)
Other expenses	(125.7)		(77.2)		(54.2)		(153.8)		(410.9)		(32.9)		(443.8)		(18.4)		(462.2)
Income (loss) before provision (benefit) for income taxes	$ 187.4		$ 80.1		$ (1.8)		$ 35.1		$ 300.8		$ 9.5		$ 310.3		$ (196.6)		$ 113.7
Select Period End Balances
Loans including receivables pledged	$ 7,423.9		$ 1,356.3		$ 2,538.4		$ 3,940.4		$ 15,259.0		$ 7,025.7		$ 22,284.7		$ 0		$ 22,284.7
Credit balances of factoring clients	0		0		(1,084.9)		0		(1,084.9)		0		(1,084.9)		0		(1,084.9)
Assets held for sale	378.8		257.3		0		528.1		1,164.2		699.3		1,863.5		0		1,863.5
Operating lease equipment, net	51.1		10,619.3		0		250.0		10,920.4		0		10,920.4		0		10,920.4
For the six months ended June 30, 2010
Total interest income	$ 1,042.7		$ 121.5		$ 54.9		$ 707.2		$ 1,926.3		$ 192.6		$ 2,118.9		$ 9.6		$ 2,128.5
Total interest expense	(574.8)		(492.6)		(91.1)		(358.3)		(1,516.8)		(126.2)		(1,643.0)		4.1		(1,638.9)
Provision for credit losses	(229.1)		(4.3)		(46.2)		(164.4)		(444.0)		(13.8)		(457.8)		(15.0)		(472.8)
Rental income on operating leases	16.1		621.8		0		206.9		844.8		0		844.8		(1.1)		843.7
Other income, excluding rental income	309.0		40.4		100.6		72.0		522.0		24.1		546.1		(57.2)		488.9
Depreciation on operating lease equipment	(8.7)		(164.5)		0		(178.1)		(351.3)		0		(351.3)		0.5		(350.8)
Other expenses	(170.2)		(85.1)		(65.0)		(173.2)		(493.5)		(44.2)		(537.7)		(1.8)		(539.5)
Income (loss) before provision (benefit) for income taxes	$ 385.0		$ 37.2		$ (46.8)		$ 112.1		$ 487.5		$ 32.5		$ 520.0		$ (60.9)		$ 459.1
Select Period End Balances
Loans including receivables pledged		$ 10,346.2		$ 1,636.9		$ 2,514.6		$ 6,101.3		$ 20,599.0		$ 8,789.6		$ 29,388.6		$ 0		$ 29,388.6
Credit balances of factoring clients		0		0		(877.3)		0		(877.3)		0		(877.3)		0		(877.3)
Assets held for sale		514.8		10.4		0		18.8		544.0		28.5		572.5		0		572.5
Operating lease equipment, net		105.6		10,296.9		0		551.9		10,954.4		0		10,954.4		0		10,954.4