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 JANUARY 31, 1996
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 February 29,
1996 was 17,277,164
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Total number of pages - - 15
<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 and Nine Months Ended January 31, 1996
and 1995 3
Condensed Consolidated Balance Sheets --
January 31, 1996 and April 30, 1995 4
Condensed Consolidated Statements of Cash Flows--
Nine Months Ended January 31, 1996 and 1995 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2 - Management's Discussion and Analysis of Financial
Position and Results of Operations 7
PART II--OTHER INFORMATION:
Item 6 - Exhibits and Reports on Form 8-K 11
Index to Exhibits 12
Signatures 15
</TABLE>
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<PAGE>
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements.
PHH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
January 31, January 31,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Vehicle management services $ 344,515 $ 313,151 $ 1,012,568 $ 922,394
Real estate services 192,559 151,458 604,075 508,184
Mortgage banking services 49,643 29,532 141,701 94,008
--------- ---------- ---------- -----------
586,717 494,141 1,758,344 1,524,586
-------- --------- --------- ---------
Operating expenses:
Depreciation on vehicles under
operating leases 236,553 215,866 698,949 642,103
Costs, including interest, of
carrying and reselling homes 161,083 123,811 508,115 426,002
Direct costs of mortgage banking
services 20,405 10,352 48,536 28,962
Interest 57,727 46,147 167,111 127,840
Selling, general and administrative 77,869 69,711 237,673 213,516
--------- ---------- ---------- ----------
553,637 465,887 1,660,384 1,438,423
-------- --------- --------- ---------
Income before income taxes 33,080 28,254 97,960 86,163
Income taxes 13,598 11,492 40,613 35,274
--------- ---------- ----------- -----------
Net income $ 19,482 $ 16,762 $ 57,347 $ 50,889
========= ========== =========== ===========
Net income per share $ 1.10 $ .98 $ 3.27 $ 2.94
========== ============ ============ ============
</TABLE>
See accompanying notes.
-3-
<PAGE>
Item 1. Financial Statements (Continued).
PHH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
January 31, 1996 April 30, 1995
(Unaudited)
<S> <C> <C>
ASSETS
Cash $ 6,814 $ 3,412
Accounts receivable, less allowance for
doubtful accounts of $7,796 at January 31,
1996 and $6,689 at April 30, 1995 505,861 484,230
Carrying costs on homes under management 61,916 45,260
Mortgage loans held for sale 784,901 712,247
Property and equipment, net 96,328 102,399
Unamortized goodwill 49,660 51,164
Other assets 308,389 175,932
---------- ----------
1,813,869 1,574,644
--------- ---------
ASSETS UNDER MANAGEMENT PROGRAMS
Net investment in leases and leased vehicles 3,243,236 3,017,231
Equity advances on homes 684,858 447,658
---------- ----------
3,928,094 3,464,889
--------- ---------
$ 5,741,963 $ 5,039,533
========= =========
LIABILITIES
Accounts payable and accrued expenses $ 435,416 $ 458,438
Advances from clients and deferred revenue 128,343 101,229
Other debt 645,247 735,886
Deferred income taxes 164,400 124,400
---------- ----------
1,373,406 1,419,953
--------- ---------
LIABILITIES UNDER MANAGEMENT PROGRAMS 3,782,625 3,079,629
--------- ---------
STOCKHOLDERS' EQUITY
Preferred stock, authorized 3,000,000 shares -- --
Common stock, no par value, authorized
50,000,000 shares; issued and outstanding
17,243,874 shares at January 31, 1996 and
16,890,212 shares at April 30, 1995 91,519 79,210
Cumulative foreign currency translation
adjustment (23,100) (16,913)
Retained earnings 517,513 477,654
---------- ----------
585,932 539,951
---------- ----------
$ 5,741,963 $ 5,039,533
========= =========
</TABLE>
See accompanying notes.
-4-
<PAGE>
Item 1. Financial Statements (Continued).
PHH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended January 31,
(In thousands) 1996 1995
---- ----
<S> <C> <C>
Operating Activities:
Net income $ 57,347 $ 50,889
Adjustments to reconcile income to cash
provided by operating activities:
Depreciation on vehicles under operating leases 698,949 642,103
Other depreciation and amortization 24,069 22,612
Amortization and write-down of
capitalized servicing rights and fees 25,499 23,682
Additions to originated mortgage servicing rights (62,895) -
Additions to excess mortgage servicing fees (45,958) (22,636)
Deferred income taxes 40,668 11,133
Changes in:
Accounts receivable (30,021) (4,855)
Carrying costs on homes under management (16,940) (9,860)
Mortgage loans held for sale (72,654) 60,507
Accounts payable and accrued expenses (19,600) (165,411)
Advances from clients and deferred revenue 27,813 21,616
All other operating activity (42,320) (24,465)
------------- ------------
Cash provided by operating activities 583,957 605,315
------------ -----------
Investing Activities:
Investment in leases and leased vehicles (1,362,639) (1,140,003)
Repayment of investment in leases and leased vehicles 415,490 418,655
Value of homes acquired (3,678,051) (4,073,721)
Value of homes sold 3,441,497 4,027,290
Purchases of mortgage servicing rights (14,893) (9,921)
Additions to property and equipment, net of dispositions (14,590) (10,967)
All other investing activities (4,675) (989)
------------ ----------------
Cash used in investing activities (1,217,861) (789,656)
----------- -------------
Financing Activities:
Net change in borrowings with terms of less than 90 days (7,995) 89,048
Proceeds from issuance of other borrowings 1,604,268 940,589
Principal payment on other borrowings (964,248) (801,457)
Stock option plan transactions 12,309 2,670
Repurchases of common shares - (16,737)
Payment of dividends (17,488) (16,485)
------------- -------------
Cash provided by financing activities 626,846 197,628
------------ ------------
Effect of exchange rate changes on cash 10,460 (4,259)
------------- --------------
Increase in cash 3,402 9,028
Cash at beginning of period 3,412 25
-------------- ----------------
Cash at end of period $ 6,814 $ 9,053
============== ==============
Supplemental disclosures of cash flow information:
Cash paid for interest $ 197,025 $ 147,194
============= =============
Cash paid for income taxes $ 4,310 $ 24,088
=============== ==============
</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.
Reclassifications
Certain reclassifications have been made to the prior year's consolidated
financial statements for comparative purposes.
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.
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 Condition and Results
of Operations
PHH CORPORATION AND SUBSIDIARIES
RESULTS OF OPERATIONS - Nine Months Ended January 31, 1996 vs. January 31, 1995
All comparisons within the following discussion are to the same period of the
previous year, unless otherwise stated.
Consolidated net income and net income per share for the third quarter of fiscal
1996 increased 16 percent to $19.5 million and 12 percent to $1.10,
respectively. For the first nine months, consolidated net income and net income
per share increased 13 percent to $57.3 million and 11 percent to $3.27,
respectively. The increase in the third quarter resulted from the Company's
mortgage banking services and vehicle management services business segments,
partially offset by a decrease in the real estate services business segment. The
increase for the first nine months was primarily due to the Company's mortgage
banking services business segment coupled with a slight increase in the vehicle
management services segment and a slight decrease in the real estate services
segment.
Consolidated revenues increased 19 percent to $586.7 million and 15 percent
to $1.8 billion for the third quarter and the first nine months of fiscal 1996,
respectively.
The Company's effective tax rate was 41.5 percent for the first nine months of
fiscal 1996 as compared to 40.9 percent for the same period a year ago.
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 by related interest required to
fund assets. Operating expenses are all other costs incurred in delivering
services to clients.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
January 31, January 31,
Operating Income (in thousands) 1996 1995 1996 1995
------------------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues $ 144,480 $ 125,578 $ 432,292 $ 381,893
Operating expenses 111,400 97,324 334,332 295,730
------- -------- ------- -------
Total operating income $ 33,080 $ 28,254 $ 97,960 $ 86,163
======== ======== ======== ========
</TABLE>
Vehicle Management Services
Vehicle management services are primarily 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 which generate recurring fee transactions for managing various
aspects of clients' vehicle fleets.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
January 31, January 31,
Operating Income (in thousands) 1996 1995 1996 1995
------------------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues:
Asset-based $ 32,856 $ 31,935 $ 97,815 $ 96,786
Fee-based 31,377 26,188 88,281 77,608
------ ------ -------- --------
Total net revenues 64,233 58,123 186,096 174,394
Operating expenses 49,050 45,707 148,535 138,083
------ ------ ------- -------
Operating income $ 15,183 $ 12,416 $ 37,561 $ 36,311
====== ====== ======== ========
</TABLE>
-7-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Cont.)
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 11 percent
for the third quarter and 7 percent for the first nine months of fiscal 1996.
Net revenues derived from asset-based products increased 3 percent and 1 percent
for the third quarter and first nine months of fiscal 1996, respectively.
Increases in management fees per vehicle, increases in the number of vehicles
leased, as well as the effect of an increase in vehicle purchases, were
partially offset by the anticipated reduction in domestic volume of remarketed
vehicles under closed-end operating leases.
Net revenues derived from fee-based services increased 20 percent and 14 percent
for the third quarter and first nine months, respectively. The increases were
due to growth in fuel and maintenance management programs, reflecting increased
market penetration in the U.S. and U.K., truck management programs in the U.K.,
as well as growth in accident management programs and other driver services, in
the U.S. and U.K.
Vehicle management services operating income increased 22 percent for the third
quarter of fiscal 1996 and 3 percent for the first nine months. The increases in
net revenues discussed above were partially offset by increases in operating
expenses. Cost increases were primarily due to higher operating expenses related
to volume increases 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 Nine Months Ended
January 31, January 31,
Operating Income (in thousands) 1996 1995 1996 1995
------------------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues:
Asset-based $ 29,249 $ 28,293 $ 88,475 $ 83,147
Fee-based 19,819 18,617 64,203 58,381
------ ------ -------- --------
Total net revenues 49,068 46,910 152,678 141,528
Operating expenses 40,486 37,348 125,928 114,012
------ ------ ------- -------
Operating income $ 8,582 $ 9,562 $ 26,750 $ 27,516
======= ======= ======== ========
</TABLE>
-8-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Cont.)
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 5 percent and 8 percent for the
third quarter and first nine months of fiscal 1996, respectively.
Asset-based net revenues increased 3 percent and 6 percent for the third quarter
and first nine months of fiscal 1996, respectively. These increases reflect an
increase in the number of transferee homes sold and the product mix of homes
sold as compared to that of the prior year.
Fee-based net revenues increased 6 percent and 10 percent for the third quarter
and first nine months of fiscal 1996, respectively, primarily due to more
household goods moves in the U.S. and increased referral fees from our network
of brokers. These increases were offset by a decrease in revenues earned from
consulting services and a decrease in the volume and fees earned on residential
properties managed for financial institutions in the U.S. in the third quarter.
Additionally, the first nine months of fiscal 1996 reflects a decrease in volume
from the Canadian government sector.
Real estate services operating income decreased 10 percent and 3 percent for the
third quarter and first nine months of fiscal 1996, respectively. The increases
in net revenues described above were offset by increased costs in support of
volume growth in fee-based services as well as the effect of system initiatives
in our Canadian operations.
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 while 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, banks and other mortgage brokers.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
January 31, January 31,
Operating Income (in thousands) 1996 1995 1996 1995
------------------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues:
Loan production $ 17,151 $ (2,628) $ 50,279 $ (606)
Servicing fees 14,028 13,036 39,853 38,501
Gain on sale of servicing rights - 10,137 3,386 28,076
--------- ------ ------- -------
Total net revenues 31,179 20,545 93,518 65,971
Operating expenses 21,864 14,269 59,869 43,635
------ ------ ------ -------
Operating income $ 9,315 $ 6,276 $ 33,649 $ 22,336
======= ======= ====== =======
</TABLE>
Mortgage banking services net revenues, measured as revenues earned reduced by
direct costs for amortization and payments to third-party service providers,
increased 52 percent for the third quarter and 42 percent for the first nine
months of fiscal 1996. 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 $19.5 million for the third
-9-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Cont.)
PHH CORPORATION AND SUBSIDIARIES
quarter and $57.4 million for the first nine months of fiscal 1996, which is
included in net revenues earned from loan production. The remaining change in
loan production net revenues resulted from an increase in net margins realized
on loans sold during the third quarter and a decrease in net margins realized
for the first nine months of fiscal 1996 compared to the same periods in the
prior year. These shifts in margins are consistent with industry trends and
reflect the effect of consumer demand on secondary market prices.
Mortgage loan closings increased from $0.6 billion to $1.9 billion for the third
quarter and from $2.7 billion to $5.5 billion for the first nine months of
fiscal 1996. This was a result of increased market share due primarily to
expanded relationships with affinity groups which represented 33 percent of the
increase in the quarter and 30 percent of the increase for the first nine
months, and with credit unions which represented 30 percent of the increase in
the quarter and 25 percent of the increase for the first nine months. The
majority (67 percent) of loans closed in the quarter represented mortgages for
residential properties being purchased. However, there has been increased
lending volume as mortgagors seek to refinance existing mortgages due to reduced
mortgage interest rates. While some of these refinance mortgages replace
mortgages in the Company's existing portfolio, a portion of them are generated
from new sources of business. Refinancings represented 33 percent of closed
loans in the quarter and 25 percent in the nine-month period. Net servicing fee
revenue increased 8 percent in the third quarter and 4 percent for the first
nine months of fiscal 1996 due to growth of the average servicing portfolio,
primarily in the second and third quarters. The servicing portfolio balance at
January 31, 1996, was $20.5 billion as compared to $17.5 billion a year ago. The
gain on sale of servicing rights decreased due to a lower level of servicing
rights sales in the first nine months of fiscal 1996 compared to the same period
a year ago.
Mortgage banking services operating income increased 48 percent for the third
quarter and 51 percent for the first nine months of fiscal 1996. The increase
was due to higher net revenues associated with the capitalization of originated
mortgage servicing rights which was $19.5 million and $57.4 million for the
third quarter and first nine months, respectively, as described above. These
revenues were partially offset by a significant reduction in the gain on sale of
servicing rights of $10.1 million in the third quarter and $24.7 million in the
first nine months. In addition, operating expenses increased for both the third
quarter and the first nine months in support of volume increases of mortgage
loans produced.
The Company's profitability from mortgage banking services will be affected by
such external factors as capacity within the industry, 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 group and credit union clients,
expansion of its client base, 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 January 31, 1996, the Company had outstanding $3.8 billion
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
$1.1 billion for the first nine months of fiscal 1996, while repayments of
equity advances on homes were $1.4 billion.
-10-
<PAGE>
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
PHH CORPORATION AND SUBSIDIARIES
(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.
-11-
<PAGE>
PHH CORPORATION AND SUBSIDIARIES
Index to Exhibits
-----------------
Exhibit No. Page No.
Exhibit (11) - Schedule containing information used in
the computation of net income per share 13
Exhibit (12) - Schedule containing information used in the
computation of the ratio of earnings to fixed charges 14
-12-
<PAGE>
EXHIBIT (11)
PHH CORPORATION AND SUBSIDIARIES
Information Used in the Computation of Net Income Per Share
<TABLE>
<CAPTION>
Nine Months Ended January 31,
(In thousands except per share data) 1996 1995
---- ----
<S> <C> <C>
NET INCOME - as reported $ 57,347 $ 50,889
=========== ==========
Weighted average number of shares outstanding 17,108 17,139
Give effect to the exercise of dilutive options
determined under the treasury stock method 328 128
Reflect the period-end market price when greater
than the average market price during the
quarter 125 25
----------- -----------
Number of shares used in the computation of net
income per share 17,561 17,292
=========== ===========
NET INCOME PER SHARE $ 3.27 $ 2.94
========== ==========
</TABLE>
-13-
<PAGE>
EXHIBIT (12)
PHH CORPORATION AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(dollars in thousands)
<TABLE>
<CAPTION>
Nine Year Ended April 30
Months Ended
January 31, 1996 1995 1994 1993 1992 1991
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before income taxes $ 97,960 $ 121,318 $ 109,796 $ 94,238 $ 83,117 $ 77,759
Add:
Interest expense 186,770 194,196 162,108 193,935 237,058 302,853
Interest portion of rentals* 5,808 8,065 9,088 8,456 8,665 7,796
---------- ---------- ---------- ---------- ---------- ----------
Earnings available for fixed charges $ 290,538 $ 323,579 $ 280,992 $ 296,629 $ 328,840 $ 388,408
======== ======== ======== ======== ======== ========
Fixed charges:
Interest expense $ 186,770 $ 194,196 $ 162,108 $ 193,935 $ 237,058 $ 302,853
Interest portion of rentals* 5,808 8,065 9,088 8,456 8,665 7,796
--------- ---------- --------- ---------- ---------- ----------
$ 192,578 $ 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.
-14-
<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: ___________________ _____________________________
Nan A. Grant
Controller
-15-
<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 JANUARY 31, 1996 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> 9-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> MAY-01-1995
<PERIOD-END> JAN-31-1996
<EXCHANGE-RATE> 0.001
<CASH> 6814
<SECURITIES> 0
<RECEIVABLES> 513657
<ALLOWANCES> 7796
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 96328
<DEPRECIATION> 0
<TOTAL-ASSETS> 5741963
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 91519
0
0
<OTHER-SE> 494413
<TOTAL-LIABILITY-AND-EQUITY> 5741963
<SALES> 0
<TOTAL-REVENUES> 1758344
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1493273
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 167111
<INCOME-PRETAX> 97960
<INCOME-TAX> 40613
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57347
<EPS-PRIMARY> 3.29
<EPS-DILUTED> 3.27
</TABLE>
