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PHH Corporation (NYSE: PHH) (“PHH” or the “Company”) today announced financial results for the quarter ended March 31, 2012.
For the quarter ended March 31, 2012, the Company reported net income attributable to PHH Corporation of $75 million or $1.32 per share. Core earnings (after-tax)* and core earnings per share* for the quarter ended March 31, 2012, were $53 million and $0.93, respectively.
“We had a solid quarter, and we are making progress against our four key strategies,” said Glen A. Messina, president and CEO of PHH Corporation. “The mortgage originations environment remains favorable with low mortgage interest rates and priced-in margins the widest we have seen in some time. Volumes in our retail mortgage origination channels remained at robust levels, while our Fleet business continued its solid, double-digit growth. We have more than doubled our unrestricted cash balance since year-end and have significantly improved our liquidity position. In April, we retired our 2012 unsecured debt maturities, and we believe that the execution of our liquidity and capital plan will provide sufficient liquidity to meet our debt service obligations, fund potential increases in repurchase and indemnification requests and operate our businesses.”
Messina added, “I continue to see significant opportunity at PHH to create value for our shareholders. We believe our reported results do not reflect fully the underlying strength of our businesses. We experienced an increase in our foreclosure-related charges as a result of a significant uptick in mortgage repurchase demands, primarily from the GSEs. We believe our focus on operational excellence should reduce defects and minimize our exposure to this risk in future years. We have identified opportunities and are developing initiatives to improve our operational effectiveness and profitability.”
Liquidity and Capital Raising Update
Liquidity at March 31, 2012, included:
$875 million in unrestricted cash and equivalents
$509 million in availability under unsecured revolving credit facility
During the first quarter, the Company issued $250 million of 6% convertible senior notes due 2017 and repurchased $51 million in face value of its 4% convertible notes due 2012. On April 16, 2012, the Company repaid the $199 million remaining outstanding principal balance of the 4% convertible notes due 2012. Unrestricted cash and equivalents at the end of the first quarter, pro forma for the retirement of the 4% convertible notes due 2012, was $676 million.