EXHIBIT 12
PHH Corporation and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(Dollars in millions)
Year Ended
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December 31, January 31,
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1998 (2) 1997 1996 1996 1995
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Income (loss) before income taxes $ 439.6 $ (3.4) $ 176.3 $ 133.1 $ 116.8
Plus: Fixed charges 353.8 294.3 269.0 253.5 202.7
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Earnings available to cover
fixed charges $ 793.4 $ 290.9 $ 445.3 $ 386.6 $ 319.5
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Fixed charges (1):
Interest, including amortization
of deferred financing costs 343.1 286.5 260.8 245.6 194.6
Interest portion of rental
payment 10.7 7.8 8.2 7.9 8.1
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Total fixed charges $ 353.8 $ 294.3 $ 269.0 $ 253.5 $ 202.7
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Ratio of earnings to fixed
charges 2.24x (*) 1.66x 1.53x 1.58x
(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 services and relocation services
activities.
(2) For the year ended December 31, 1998, income before income taxes includes
non-recurring merger-related costs and other unusual charges (credits) of
($20.2) million. Excluding such charges (credits); the ratio of earnings
to fixed charges is 2.19x.
(*) 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
of $251.0 million. Excluding such charges, the ratio of earnings to
fixed charges is 1.84x.