said Wednesday that it will not be able to file its annual report in a timely fashion because its auditors are still reviewing the company's finances.
The company, which was spun off last year by
( CD), also said it appointed a new chief financial officer on Feb. 23.
Mount Laurel, N.J.-based PHH said it believes the problems the auditors are having in completing the annual report stem from the spinoff from Cendant. The mortgage firm's independent auditor is Deloitte & Touche.
"PHH has had difficulty completing its Form 10-K in a timely manner for a number of reasons, primarily relating to the documentation and analysis of certain spin-off entries, including the allocation and valuation of certain tax assets, the valuation of goodwill and intangibles, the consolidation of PHH Home Loans, LLC, a mortgage joint venture between Cendant and PHH Mortgage, and the assessment of other tax items,'' a company press release said.
The company offered more detail about the delay and its impact in a regulatory filing late Wednesday. In that filing, PHH said it may have to take an impairment charge of up to $50 million in 2005, stemming from new accounting calculation arising out of the spinoff.
In the regulatory filing, the company also said during the review that it had found a number of "control deficiencies'' in its internal financial reporting system.
"We are aggressively working with our independent auditors to complete the documentation to close out the outstanding issues so that our financial statements can be filed as soon as possible," said PHH President and CEO Terry Edwards, in a press release.
The company did not offer much of an explanation for the hiring of Clair Raubenstine as its new CFO. Raubenstine, who will be paid $1 million, is a former PricewaterhouseCoopers partner, and will replace Neil Cashen, who is remaining with PHH as senior vice president for strategic planning and investor relations.
In 2004, Cendant, the consumer services firm, decided to spin off PHH after it was unable to find a buyer for the mortgage finance firm.