WASHINGTON D.C. 20549
_________
FORM 10-Q
_________
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended JULY 31, 1995
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 1-7797
_________
PHH CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 52-0551284
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
11333 McCormick Road, Hunt Valley, Maryland 21031
(Address of principal executive offices) (Zip Code)
(410) 771-3600
(Registrant's telephone number, including area code)
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 ____
Number of shares of PHH Corporation common stock outstanding on
August 31, 1995 was 17,071,312.
Total number of pages - - 16
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<PAGE>
PHH CORPORATION
INDEX
________________________________________________
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I--FINANCIAL INFORMATION:
Item 1 - Financial Statements
Condensed Consolidated Statements of Income--Three
Months Ended July 31, 1995 and 1994 3
Condensed Consolidated Balance Sheets --
July 31, 1995 and April 30, 1995 4
Condensed Consolidated Statements of Cash Flows--
Three Months Ended July 31, 1995 and 1994 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2 - Management's Discussion and Analysis of Financial
Position and Operations 8
PART II--OTHER INFORMATION:
Item 4 - Submission of Matters to a Vote of Security
Holders 12
Item 6 - Exhibits and Reports on Form 8-K 12
Index to Exhibits 13
Signatures 16
</TABLE>
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<PAGE>
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements
PHH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended July 31,
(In thousands except per share data) 1995 1994
<S> <C> <C>
Revenues:
Vehicle management services $ 333,762 $ 305,041
Real estate services 204,452 182,209
Mortgage banking services 43,643 33,058
581,857 520,308
Operating expenses:
Depreciation on vehicles under operating leases 231,488 212,511
Costs, including interest, of carrying
and reselling homes 175,543 156,636
Direct costs of mortgage banking services 12,280 9,361
Interest 53,452 40,349
Selling, general and administrative 77,431 73,416
550,194 492,273
Income before income taxes 31,663 28,035
Income taxes 13,362 11,520
Net income $ 18,301 $ 16,515
Net income per share $ 1.05 $ .95
</TABLE>
See accompanying notes.
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<PAGE>
Item 1. Financial Statements (Continued)
PHH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
July 31, 1995 April 30, 1995
(In thousands) (unaudited)
<S> <C> <C>
ASSETS
Cash $ 17,982 $ 3,412
Accounts receivable, less allowance for
doubtful accounts of $7,527 at July 31,
1995 and $6,689 at April 30, 1995 479,828 484,230
Carrying costs on homes under management 43,143 45,260
Mortgage loans held for sale 788,140 712,247
Property and equipment, net 100,181 102,399
Unamortized goodwill 50,518 51,164
Other assets 225,576 175,932
1,705,368 1,574,644
ASSETS UNDER MANAGEMENT PROGRAMS
Net investment in leases and leased vehicles 3,023,609 3,017,231
Equity advances on homes 617,288 447,658
3,640,897 3,464,889
$ 5,346,265 $ 5,039,533
LIABILITIES
Accounts payable and accrued expenses $ 474,628 $ 458,438
Advances from clients and deferred revenue 99,312 101,229
Other debt 813,941 735,886
Deferred income taxes 131,803 124,400
1,519,684 1,419,953
LIABILITIES UNDER MANAGEMENT PROGRAMS 3,269,306 3,079,629
STOCKHOLDERS' EQUITY
Preferred stock, authorized 3,000,000 shares -- --
Common stock, no par value, authorized
50,000,000 shares; issued and out-
standing 17,061,745 shares at July 31,
1995 and 16,890,212 shares at April 30, 1995 85,075 79,210
Cumulative foreign currency translation
adjustment (17,960) (16,913)
Retained earnings 490,160 477,654
557,275 539,951
$ 5,346,265 $ 5,039,533
</TABLE>
See accompanying notes.
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<PAGE>
Item 1. Financial Statements (Continued)
PHH CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended July 31,
(In thousands) 1995 1994
<S> <C> <C>
Operating Activities:
Net income $ 18,301 $ 16,515
Adjustments to reconcile income to cash
provided by operating activities:
Depreciation on vehicles under operating leases 231,488 212,511
Other depreciation and amortization 8,229 12,581
Amortization and write-down of
capitalized servicing rights 5,666 6,317
Originated mortgage servicing rights (16,615) --
Additions to deferred mortgage servicing fees (12,145) (2,959)
Deferred income taxes 7,521 (2,418)
Changes in:
Accounts receivable 3,056 (25,725)
Carrying costs on homes under management 2,095 4,347
Mortgage loans held for sale (75,893) (244,873)
Accounts payable and accrued expenses 15,055 (74,557)
Advances from clients and deferred revenue (1,872) (13,495)
All other operating activity (20,306) (9,564)
Cash provided (used) by operating activities 164,580 (121,320)
Investing Activities:
Investment in leases and leased vehicles (391,712) (374,245)
Repayment of investment in leases and leased vehicles 151,934 157,479
Proceeds from sales and transfers of leases and
leased vehicles to third parties -- 1,225
Value of homes acquired (1,359,511) (1,161,009)
Value of homes sold 1,189,690 1,156,267
Purchases of mortgage servicing rights (5,713) (5,620)
Additions to property and equipment, net of dispositions (4,216) (8,651)
All other investing activities (2,574) (842)
Cash used in investing activities (422,102) (235,396)
Financing Activities:
Net change in borrowings with terms of less than 90 days 175,967 657,500
Proceeds from issuance of other borrowings 241,764 117,074
Principal payment on other borrowings (146,638) (411,731)
Stock option plan transactions 5,865 2,211
Repurchases of common shares -- (2,659)
Payment of dividends (5,795) (5,543)
Cash provided by financing activities 271,163 356,852
Effect of exchange rate changes on cash 929 2,978
Increase in cash 14,570 3,114
Cash at beginning of period 3,412 25
Cash at end of period $ 17,982 $ 3,139
Supplemental disclosures of cash flow
information:
Cash paid for interest $ 61,497 $ 46,818
Cash paid for income taxes $ 479 $ 1,534
</TABLE>
See accompanying notes.
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<PAGE>
Item 1. Financial Statements (Continued)
PHH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
SUMMARY OF ACCOUNTING POLICIES
Basis of Presentation
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements included in this Form 10-Q reflect
all adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of the results of operations for the
periods presented. The results of operations for the periods
presented are not necessarily indicative of the results to be expected
for the full year.
For further information, refer to the consolidated financial
statements and footnotes included in the Company's annual report
included as part of Form 10-K for the year ended April 30, 1995.
Net Income Per Share
Net income per share is computed on the basis of the weighted average
number of shares of common stock outstanding during each period and
common stock equivalents arising from the assumed exercise of
outstanding stock options under the treasury stock method. See
Exhibit 11 to this Form 10-Q which details the computation of net
income per share.
Reclassifications
Certain reclassifications have been made to the prior year's condensed
consolidated financial statements for comparative purposes.
New Accounting Pronouncement
On May 12, 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 122,
"Accounting for Mortgage Servicing Rights," an amendment to SFAS No.
65. The Company has elected to early adopt this standard for its
financial statement reporting in the first quarter of fiscal 1996.
SFAS No. 122 prohibits retroactive application to fiscal 1995.
Accordingly, the Company's financial statement reporting for the first
quarter of fiscal 1995 was not restated.
SFAS No. 122 requires that a portion of the cost of originating a
mortgage loan which is sold while retaining servicing rights, be
allocated to the mortgage servicing right. The cost is to be
allocated based on the servicing right's fair value relative to the
loan as a whole. To determine the fair value of the servicing rights
created during the first quarter, the Company used available market
prices for comparable servicing, when available, or alternatively used
a valuation model that calculates the present value of future cash
flows to determine the fair value of the servicing rights. In using
this valuation method, the Company incorporated assumptions that
market participants would use in estimating future net servicing
income which included estimates of the cost of servicing per loan, the
discount rate, an inflation rate, ancillary income per loan,
prepayment speeds and default rates.
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<PAGE>
Item 1. Financial Statements (Continued)
PHH CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
In determining servicing value impairment at the end of the quarter,
the post-implementation originated servicing portfolio was
disaggregated into its predominant risk characteristics. The Company
has determined those risk characteristics to be loan type (fixed and
adjustable rate) and interest rate band within loan type. These
segments of the portfolio were then valued, using available market
prices for comparable servicing, when available or, alternatively,
using the same model as was used to originally determine the fair
value at origination, using current assumptions. The calculated value
was then compared with the book value of each segment to determine if
an allowance for impairment was required.
As of and for the three months ended July 31, 1995, capitalized
originated mortgage loan servicing rights, net of scheduled
amortization of $237 and valuation allowance for impairment of $651,
totaled $16,223.
CONTINGENT LIABILITIES
The Company and its subsidiaries are involved in pending litigation of
the usual character incidental to the business transacted by them. In
the opinion of management, such litigation will not have a material
effect on the Company's consolidated financial statements.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Position
and Operations
PHH CORPORATION AND SUBSIDIARIES
RESULTS OF OPERATIONS - Three Months Ended July 31, 1995 vs. July 31,
1994
All comparisons within the following discussion are to the three
months ended July 31 of the previous year, unless otherwise stated.
Consolidated net income and net income per share for the first quarter
of fiscal 1996 both increased 11 percent to $18.3 million and $1.05,
respectively. The increase was due to an increase in the Company's
mortgage banking services business segment, partially offset by a
decrease in its vehicle management services business segment. Results
for the real estate services business segment were essentially
unchanged.
Consolidated revenues increased 12 percent to $582 million for the
first three months of fiscal 1996.
The Company's effective tax rate was 42 percent for the first three
months of fiscal 1996 as compared to 41 percent for the same period a
year ago. The increase reflects an overall increase in U.S. state
income tax effective rates as well as the results of the Company's
Canadian real estate services subsidiary.
The Company incurs and pays certain costs on behalf of its clients
which include payments to third parties as a component of its service
delivery. These direct costs are billed to clients and recognized as
both revenue and expense. Additionally, certain other direct costs
represent depreciation on vehicles under operating leases and
amortization of mortgage servicing fees. Management analyzes its
business results in terms of net revenues and total operating
expenses. Net revenues, as defined by the Company, include revenues
earned reduced by the direct costs described above and also reduced by
related interest required to fund assets. Operating expenses are all
other costs incurred in delivering services to clients.
<TABLE>
<CAPTION>
Three months ended July 31,
Operating Income (in thousands) 1995 1994
<S> <C> <C>
Net revenues $ 140,727 $ 128,520
Operating expenses 109,064 100,485
Total operating income $ 31,663 $ 28,035
</TABLE>
Vehicle Management Services
Vehicle management services are offered to corporations and government
agencies to assist them in effectively managing their vehicle fleet
costs, reducing in-house administrative costs and enhancing driver
productivity. Asset-based services generally require an investment by
the Company and include new vehicle purchasing, open- and closed-end
leasing, and used vehicle marketing. Fee-based services include
maintenance management programs, expense reporting, fuel management
programs, accident and safety programs and other driver services for
managing clients' vehicle fleets.
<TABLE>
<CAPTION>
Three months ended July 31,
Operating Income (in thousands) 1995 1994
<S> <C> <C>
Net revenues:
Asset-based $ 33,058 $ 32,831
Fee-based 28,353 26,127
Total net revenues 61,411 58,958
Operating expenses 50,381 46,375
Operating income $ 11,030 $ 12,583
</TABLE>
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Position and
Operations (Continued)
PHH CORPORATION AND SUBSIDIARIES
Net revenues for vehicle management services represents revenues
earned and billed to clients reduced by depreciation on vehicles under
operating leases and related interest. Total net revenues for this
segment increased four percent to $61.4 million for the three months
ended July 31, 1995.
Net revenues derived from asset-based products increased one percent
to $33.1 million due to an increase in the number of vehicles
purchased and an increase in management fees per vehicle resulting
from a higher average cost of vehicles managed partially offset by the
anticipated reduction in domestic volume of disposed vehicles under
closed-end operating leases.
Net revenues derived from fee-based services increased nine percent to
$28.3 million. The increase was due to growth in fuel management
programs reflecting increased market penetration in the U.S. and U.K.
and increased fuel prices in the U.K., as well as growth in accident
management programs and other driver services, primarily in the U.K.
Vehicle management services operating income decreased 12 percent to
$11.0 million. The increase in net revenues discussed above was more
than offset by an increase in operating expenses. Cost increases were
primarily due to systems development in the U.K. and higher operating
expenses in support of volume growth in fee-based services.
The Company's profitability from vehicle management services is
affected by the number of vehicles managed and related services
provided for clients. Therefore, profitability can be negatively
affected by the general economy as corporate clients exercise a higher
degree of fiscal caution by decreasing the size of their vehicle
fleets or by extending the service period of existing fleet vehicles.
Conversely, operating results are positively affected as clients
increasingly choose to outsource their vehicle management service
operations. Results can also be enhanced as the Company expands into
new markets, increases its product diversity, broadens its client base
and continues its productivity and quality improvement efforts.
Real Estate Services
Real estate services primarily consist of the purchase, management and
resale of homes for transferred employees of corporate clients,
government agencies and members of affinity group clients. Asset-
based services are defined as relocation services involving the
purchase and resale of a home. Fee-based services include assistance
in selecting homes in destination locations, marketing homes, moving
household goods, property disposition services to financial
institutions and other consulting services.
<TABLE>
<CAPTION>
Three months ended July 31,
Operating Income (in thousands) 1995 1994
<S> <C> <C>
Net revenues:
Asset-based $ 27,336 $ 25,836
Fee-based 20,934 19,347
Total net revenues 48,270 45,183
Operating expenses 41,487 38,308
Operating income $ 6,783 $ 6,875
</TABLE>
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Position and
Operations (Continued)
PHH CORPORATION AND SUBSIDIARIES
Real estate services net revenues are those earned and billed to
clients reduced by direct costs paid on behalf of clients and related
interest. Total real estate services net revenues increased seven
percent to $48.3 million.
Asset-based net revenues increased six percent to $27.3 million. The
increase reflects an increase in the number of transferee homes sold
and the product mix of homes sold in the quarter as compared to that
of the prior year reflecting higher margin, comprehensive services.
The increase was partially offset by lower margin, lower priced
services and a lower level of funding provided to clients for equity
advances.
Fee-based net revenues increased eight percent to $20.9 million
primarily due to increased levels of residential properties managed
for financial institutions and to household goods moves.
Real estate services operating income decreased one percent to $6.8
million. The increase in net revenues described above was offset by
increased costs in support of volume growth in fee-based services.
The Company is generally not at risk on its carrying value of homes
should there be a downturn in the housing market. Management
anticipates its clients will continue to reassess their relocation plans
as part of cost control measures, authorizing fewer home purchase
transactions and utilizing a greater portion of fee-based real estate
services. Additionally, management anticipates continued margin
pressure in relocation activity in the U.S. and Canada, especially in
the government sector. At the same time, operating results may be
affected positively as clients increasingly choose to outsource their
real estate services and as the Company expands into new markets,
enhances its product diversity, broadens its client base and continues
its productivity and quality improvement efforts.
Mortgage Banking Services
Mortgage banking services primarily consist of the origination, sale
and servicing of residential first mortgage loans. The Company
markets a variety of first mortgage products to consumers through
relationships with corporations, affinity groups, government agencies,
credit unions, real estate brokerage firms and other mortgage banks.
<TABLE>
<CAPTION>
Three months ended July 31,
Operating Income (in thousands) 1995 1994
<S> <C> <C>
Net revenues:
Loan production $ 15,292 $ 5,250
Servicing fees 12,368 12,548
Gain on sale of servicing rights 3,386 6,581
Total net revenues 31,046 24,379
Operating expenses 17,196 15,802
Operating income $ 13,850 $ 8,577
</TABLE>
Mortgage banking services net revenues, measured as revenues earned
reduced by direct costs for amortization and payments to third-party
service providers increased 27 percent to $31.0 million. The Company
adopted Statement of Financial Accounting Standards (SFAS) No. 122,
"Accounting for Mortgage Servicing Rights," in the first quarter of
fiscal 1996. Application of this statement resulted in the Company
capitalizing originated mortgage servicing rights, net of related
amortization and valuation allowances, of $16.2 million for the three
months ended July 31, 1995, which is included in net revenues earned
from loan production.
Mortgage loan closings increased 25 percent to $1.5 billion. This was
a result of increased market share due primarily to expanded
relationships with affinity groups and credit unions and, to a lesser
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Position and
Operations (Continued)
PHH CORPORATION AND SUBSIDIARIES
extent, lower mortgage interest rates. However, competition within
the mortgage industry has continued to reduce margins on current loan
production volume. Servicing fee revenue was unchanged due to the
average servicing portfolio being unchanged for the first quarter of
fiscal 1996 as compared to the same period a year ago. The servicing
portfolio balance at July 31, 1995, was $17.1 billion. The gain on
sale of servicing rights decreased due to a lower level of servicing
rights sales in the first three months of fiscal 1996 as compared to
the same period a year ago.
Mortgage banking services operating income increased 61 percent to
$13.9 million. The increase was due to the increase in net revenues
as described above partially offset by an increase in operating
expenses in support of higher loan production volume.
The Company's profitability from mortgage banking services will be
affected by such external factors as the level of interest rates, the
strength of the economy, and the related condition of residential real
estate markets. The Company's broad-based marketing strategies,
including further penetration of existing affinity groups and credit
unions, signing new clients, and maintaining its system of delivering
mortgages in a cost-efficient manner, should positively affect
operating results in the future.
FINANCIAL CONDITION
The Company maintains adequate committed credit facilities to support
future requirements. As of July 31, 1995, the Company had outstanding
$3,269 million of debt for "Assets Under Management Programs".
Repayment of outstanding principal balances is funded from client
lease payments, repayment of equity advances under home relocation and
real estate management contracts, and the sale or transfer of certain
assets to third parties. Lease repayments totaled $383 million for
the first three months of fiscal 1996, while repayments of equity
advances on homes were $442 million.
-11-
<PAGE>
PART II--OTHER INFORMATION
PHH CORPORATION AND SUBSIDIARIES
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Stockholders' Meeting held on August 21, 1995,
the stockholders elected directors as follows: three-year term: James
S. Beard (14,724,090 shares voted for, 474,715 shares withheld), L.
Patton Kline (14,722,968 shares voted for, 475,837 shares withheld),
Francis P. Lucier (14,711,314 shares voted for, 487,491 shares
withheld) and Kent C. Nelson (14,724,065 shares voted for, 474,740
shares withheld); one-year term: Alan P. Hoblitzell, Jr. (14,707,090
shares voted for, 491,715 shares withheld); two-year term: Anne M.
Tatlock (14,716,491 shares voted for, 482,314 shares withheld).
The names of the Directors whose terms in office have continued are:
Andrew F. Brimmer; George L. Bunting, Jr.; Paul X. Kelley; Robert D.
Kunisch; Donald J. Shepard and Alexander B. Trowbridge.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit (11) - Schedule containing information used in the
computation of net income per share.
(b) Exhibit (12) - Schedule containing information used in the
computation of the ratio of earnings to fixed charges.
-12-
<PAGE>
PHH CORPORATION AND SUBSIDIARIES
Index to Exhibits
_________________
<TABLE>
<CAPTION>
Exhibit No. Page No.
<S> <C>
Exhibit (11) - Schedule containing information used in
the computation of net income per share 14
Exhibit (12) - Schedule containing information used in the
computation of the ratio of earnings to fixed charges 15
</TABLE>
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<PAGE>
SIGNATURES
PHH CORPORATION AND SUBSIDIARIES
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.
PHH CORPORATION
Date: September 13, 1995 ROY A. MEIERHENRY
Roy A. Meierhenry
Senior Vice President and
Chief Financial Officer
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<PAGE>
EXHIBIT (11)
PHH CORPORATION AND SUBSIDIARIES
Information Used in the Computation of Net Income Per Share
<TABLE>
<CAPTION>
Three Months Ended July 31,
(In thousands except per share data) 1995 1994
<S> <C> <C>
NET INCOME - as reported $ 18,301 $ 16,515
Weighted average number of shares outstanding 16,992 17,268
Give effect to the exercise of dilutive options
determined under the treasury stock method 332 137
Reflect the period-end market price when greater
than the average market price during the
quarter 120 25
Number of shares used in the computation of net
income per share 17,444 17,430
NET INCOME PER SHARE $ 1.05 $ .95
</TABLE>
<PAGE>
EXHIBIT (12)
PHH CORPORATION AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(dollars in thousands)
<TABLE>
<CAPTION>
Three Year Ended April 30
Months Ended
July 31, 1995 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before income taxes $ 31,663 $ 121,318 $ 109,796 $ 94,238 $ 83,117 $ 77,759
Add:
Interest expense 60,631 194,196 162,108 193,935 237,058 302,853
Interest portion of rentals* 1,956 8,065 9,088 8,456 8,665 7,796
Earnings available for fixed charges $ 94,250 $ 323,579 $ 280,992 $ 296,629 $ 328,840 $ 388,408
Fixed charges:
Interest expense $ 60,631 $ 194,196 $ 162,108 $ 193,935 $ 237,058 $ 302,853
Interest portion of rentals* 1,956 8,065 9,088 8,456 8,665 7,796
$ 62,587 $ 202,261 $ 171,196 $ 202,391 $ 245,723 $ 310,649
Ratio of earnings to fixed charges 1.51 1.60 1.64 1.47 1.34 1.25
</TABLE>
* Amounts reflect a one-third portion of rentals, the portion deemed
representative of the interest factor.
Note: The interest included in fixed charges consists of the amounts
identified as interest expense in the Consolidated Statements of
Income, the substantial portion of which represents interest on debt
incurred to finance leasing activities and mortgage banking
activities, as well as the interest costs associated with home
relocation services which are ordinarily recovered through direct
billings to clients and are included with "Costs, including interest,
of carrying and reselling homes" in the Consolidated Financial
Statements.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS OF PHH CORPORATION FILED ON FORM 10-Q FOR THE
QUARTERLY PERIOD ENDED JULY 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000077776
<NAME> PHH CORPORATION
<MULTIPLIER> 1000
<CURRENCY> 0
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> MAY-01-1995
<PERIOD-END> JUL-31-1995
<EXCHANGE-RATE> .001
<CASH> 17982
<SECURITIES> 0
<RECEIVABLES> 487355
<ALLOWANCES> 7527
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 100181
<DEPRECIATION> 0
<TOTAL-ASSETS> 5346265
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 85075
0
0
<OTHER-SE> 472200
<TOTAL-LIABILITY-AND-EQUITY> 5346265
<SALES> 0
<TOTAL-REVENUES> 581857
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 496742
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53452
<INCOME-PRETAX> 31663
<INCOME-TAX> 13362
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18301
<EPS-PRIMARY> 1.06
<EPS-DILUTED> 1.05
</TABLE>
