EXHIBIT 12
PHH Corporation and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(In thousands)
Three Months For the Years Ended
------------------------------------------------------------------------
Ended March 31, December 31 January 31
-------------------------- -----------------------------------------
1998 1997 1996 1996 1995 1994
---------------- ----------- ----------- ----------- ----------- -----------
Income (loss) before
income taxes $ 94,824 $ (3,435) $ 176,288 $ 133,115 $ 116,758 $ 106,943
Plus: Fixed charges 86,481 294,294 268,960 253,481 202,659 182,596
---------------- ----------- ----------- ----------- ----------- -----------
Earnings available to
cover fixed charges 181,305 290,859 445,248 386,596 319,417 289,539
---------------- ----------- ----------- ----------- ----------- -----------
Fixed charges (1):
Interest including
amortization of
deferred financing
costs 84,539 286,527 260,765 245,641 194,594 173,508
Interest portion of
rental payment 1,942 7,767 8,195 7,840 8,065 9,088
---------------- ----------- ----------- ----------- ----------- -----------
Total fixed charges $ 86,481 $ 294,294 $ 268,960 $ 253,481 $ 202,659 $ 182,596
================ =========== =========== =========== =========== ===========
Ratio of earnings to
fixed charges 2.10x (*) x 1.66x 1.53x 1.58x 1.59x
================= =========== ============ =========== ============ ============
(1) Fixed charges consist of interest expense on all indebtedness (including
amortization of deferred financing costs) and the portion of operating
lease rental expense that is representative of the interest factor
(deemed to be one-third of operating lease rentals). The substantial
portion of interest expense incurred on debt is used to finance the
Company's fleet leasing, mortgage service and relocation service
activities.
(*) Earnings are inadequate to cover fixed charges (deficiency of $3.4
million) for the year ended December 31, 1997. Loss before income taxes
includes non-recurring merger-related costs and other unusual charges
associated with business combinations of $251.0 million ($193.2 million
after-tax). Excluding such charges, the ratio of earnings to fixed
charges is 1.84x.