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PHH Corporation Announces Fourth Quarter And Full-Year 2012 Results

PHH Corporation (NYSE: PHH) (“PHH” or the “Company”) today announced financial results for the quarter and year ended December 31, 2012.

For the quarter ended December 31, 2012, the Company reported net income attributable to PHH Corporation of $58 million or $1.01 per basic share. Core earnings (after-tax)* and core earnings per share* for the quarter ended December 31, 2012, were $46 million and $0.81, respectively. For the year ended December 31, 2012, the Company reported net income attributable to PHH Corporation of $34 million or $0.60 per basic share. Core earnings (after-tax)* and core earnings per share* for the year ended December 31, 2012, were $168 million and $2.96, respectively. The results for the year ended December 31, 2012, include a $13 million pre-tax loss ($0.13 per share after tax) related to the early repayment of our 2013 medium term notes and a $16 million pre-tax loss (or $0.18 per share after tax) associated with the termination of an inactive mortgage reinsurance agreement. Tangible book value per share* was $25.80 at December 31, 2012, up 5% from $24.56 at year-end 2011.

Glen A. Messina, president and CEO of PHH Corporation, said, “Our fourth quarter performance was a solid ending to a year in which we made significant progress from both an operating and financing standpoint. We demonstrated strong growth in our franchise platforms, made significant investments in operational excellence and customer service, and enhanced our financial flexibility with our focus on cash flow and liquidity. We continue to believe our business model is well-designed to respond to change and opportunities in the mortgage and fleet industries, and we see significant growth potential through both increased penetration of our existing clients and expansion of our client base.”

Messina added, “Continued execution on our four key strategies positions us well for further success in 2013. We believe the expectation of both modest macroeconomic improvement and increased clarity for the mortgage industry, along with the value proposition we offer our Fleet and Mortgage clients, position us well to create long-term value for our borrowers, clients and shareholders.”

 
Summary Consolidated Results
(In millions, except per share data)
 
 
    Three Months Ended     Year Ended
December 31, December 31,
2012     2011 2012     2011
Net revenues $ 783 $ 649 $ 2,743 $ 2,214
Income (loss) before income taxes 99 21 87 (202 )
Net income (loss) attributable to PHH Corporation 58 13 34 (127 )
 
Basic earnings (loss) per share attributable to PHH Corporation $ 1.01 $ 0.22 $ 0.60 $ (2.26 )
Diluted earnings (loss) per share attributable to PHH Corporation 0.89 0.22 0.56 (2.26 )
 
Weighted-average common shares outstanding:
Basic shares (in millions) 56.957 56.504 56.815 56.349
Diluted shares (in millions) 65.082 56.847 61.601 56.349
 
Non-GAAP Results*
Core earnings (pre-tax) $ 65 $ 85 $ 256 $ 297
Core earnings (after-tax) 46 55 168 182
 
Core earnings per share $ 0.81 $ 0.98 $ 2.96 $ 3.23
 
Adjusted cash flow $ 148 $ 311 $ 563 $ 112
 

* Non-GAAP Financial Measures

Core earnings (pre-tax), core earnings (after-tax), core earnings per share, adjusted cash flow, tangible book value and tangible book value per share are financial measures that are not in accordance with U.S. generally accepted accounting principles (GAAP). See the “Note Regarding Non-GAAP Financial Measures” below for a detailed description of these and certain other Non-GAAP financial measures and reconciliations of such Non-GAAP financial measures to their most directly comparable GAAP financial measures as required by Regulation G.

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