PHHInvestor Presentation February 13, 2012-1

8/2/2019 PHHInvestor Presentation February 13, 2012-1

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PHH CorporationInvestor Presentation

February 13, 2012


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2 2012 PHH Corporation. All rights reserved.

Forward-Looking StatementsCertain statements in this presentation and in any accompanying oral remarks made in connection with this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, forward looking-statements arenot based on historical facts but instead represent only our current beliefs regarding future events. All forward-looking statements are, bytheir nature, subject to risks, uncertainties and other factors that could cause actual results, performance or achievements to differmaterially from those expressed or implied in such forward-looking statements. Investors are cautioned not to place undue reliance onthese forward-

You should understand that forward-looking statements are not guarantees of performance or results and are preliminary in nature. You -ort onForm 10-K and Quarterly Reports on Form 10-Q, in connection with any forward-looking statements that may be made by us or ourare alsoavailable at http://www.sec.gov. Except for our ongoing obligations to disclose material information under the federal securities laws,applicable stock exchange listing standards and unless otherwise required by law, we undertake no obligation to release publicly anyupdates or revisions to any forward-looking statements or to report the occurrence or non-occurrence of anticipated or unanticipatedevents.

Basis of Presentation of Financial Data

Unless noted otherwise in this presentation, all reported financial data is being presented as of the period ended December 31, 2011.

Non-GAAP Financial Measures

Core earnings (loss) (pre-tax and after-tax), core earnings (loss) per share, tangible book value and tangible book value per share arefinancial measures that are not in accordance with GAAP. See Non-GAAP Financial Measures Disclosures beginning on slide 18 forreconciliations of these measures to the most directly comparable GAAP financial measures and other disclosures as required byRegulation G.

Important Disclosures


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PHH An Attractive Investment Opportunity

Leading player in mortgage outsourcing

Long-term established relationships with exclusivityin Mortgage franchise platforms

Fleet vendor network, scale and technology createhigh barriers to entry

Limited credit risk and strong underwriting culture

Capitalized servicing portfolio 85% agency product,over 52% 2009 and later vintage

Diversified Fleet lease portfolio with highconcentration of investment grade customers

Recurring and growing Fleet earnings largely cash

Servicing portfolio generates cash

Managing Mortgage Production for greater capitalefficiency

Operate Mortgage for positive net cash flow

Defensible MarketPosition with AttractiveGrowth Prospects

High Quality Assets

Business ModelGenerates StrongCash Flow


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2011 Performance

GAAP net loss of $127 million, $2.26 per share Core Earnings (after-tax)* of $182 million, $3.23 per share

Unpaid principal balance (UPB) of capitalized mortgage servicingportfolio up 9% to $147 billion at year-end 2011

Servicing portfolio delinquencies (excluding foreclosure and REO) of3.29% continue to be stable and one of the lowest in the mortgageindustry at year-end 2011

Foreclosure and real estate owned only 1.85% of servicing portfolio atyear-end 2011

Fleet segment profit (pre-tax) of $75 million, a 19% increase over 2010

Tangible book value per share* of $24.56 at year-end 2011

* See Non-GAAP Financial Measures in this presentation


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Four Key Strategies to Create Shareholder Value

1. Disciplined growth in franchise platforms

Mortgage Private Label Services

Realogy relationship

Fleet Management business

2. Operational excellence

3. Unwavering commitment to customer service

4. In near term, liquidity, cash generation and deleveraging balance sheet


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2012: A Transition Year

Liquidity actions may have a negative impact on 2012 earnings- Reduction in cash usage for Correspondent

- Non-core asset sales

Focus on deleveraging the balance sheet

- Intend to repay 2012 and 2013 debt maturities in 2012

- Intend to seek multi-year extension of revolver

Beyond 2012, PHH should be:- More profitable

- Less volatile- Better capitalized


7/227 2012 PHH Corporation. All rights reserved.

Strong Position to Retire 2012 and 2013 DebtMaturities in 2012

Liquidity position at December 31, 2011: Unrestricted cash and equivalents of $414 million

Revolving credit facility availability of $509 million

Liquidity enhanced by $250 millionconvertible debt offering in January

Sufficient liquidity to retire 2012 corporatematurities $250 million of Convertible Notes due in April

$525 million unsecured revolving creditfacility expected to be extended and

available to February 2013 Intend to seek a multi-year extension after 2012 and

2013 maturities are addressed

Goal to deleverage to 3.0:1 unencumberedasset coverage

202 250 250

421350

8

100

0

100

200

300

400

500

600

700800

900

1,000

2012 2013 2014 2015 2016 2017 &Beyond

(In$Millions)

Unsecured Debt MaturitiesAs of 12/31/2011 Pro forma

Convertible Debt Unsecured BondsRevolver Borrowings Unsecured Bond Add-on

Intend to retire in 2012



PHH Overview

A Leading Provider of Mortgage and Fleet Management Services

Long-term track record of business process management excellence

Leading institutions view us as a trusted partner serving their

customers and employees

Scale and relationships create a defensible and expandable marketposition

Market dynamics may drive additional opportunities to improveprofitability and increase market share



Company Profile

1

Source: Inside Mortgage Finance, Copyright 2011/12

Top 4 originator of retail

residential mortgages in the

United States 3Q11 YTD1

Mortgage Origination revenue

consists of fees from mortgage

loan origination services and the

origination and sale of mortgage

loans into the secondary market

Flexibility to partially regulate

current cash investment in future

cash flow generation

Investment in Future Cash FlowGeneration

Mortgage Origination

Fleet

Management services with

approximately 570,000 vehicles

under management in the U.S.

and Canada as of 12/31/11

Fleet Management revenue

consists of leasing revenue

related to operating and direct

financing leases and fees earned

by providing maintenance,

accident management and fuel

card services

Cash Flow Generator

Fleet Management

7th largest servicer of residential

mortgages in the United States as

of 12/31/111

Mortgage Servicing revenue

consists of fees from servicing

rights and subservicing

agreements earned by providing

various administrative services

(e.g., collecting loan payments)

Capitalized MSR valuation

subject to volatility due to interest

rates, shape of the yield curve

and other factors

Cash Flow Generator

Mortgage Servicing



Strategic Objectives for Mortgage

Disciplined growth in Private Label and Realogy channels

Operate business for positive net cash flow

Emphasize non-capital intensive growth opportunities

Fee-for-service originations Sub-servicing

Improving critical business processes to mitigate origination defects

IWR scores 90+%

Incremental upside potential: Actual prepayment speeds have been slower than modeled

150+% replenishment rate has historically offset runoff

Servicing cash flow should improve with rising interest rates

Foreclosure costs should decline with rising housing prices



Key MortgageOrigination Sources Description

More than 30 financial institution clients provide access to network ofmore than 4,300 branches and 55,000 financial advisors

On-boarding new clients and continuing to expand and convertpipeline of client prospects

Investment in relationship management and technology should enablefurther penetration of existing clients

Regulatory and capital pressure on banks creates opportunity

Proprietary relationship gives us access to an estimated 1 of every 4home purchase transactions

More than 6,500 real estate offices and 200,000 real estate agents

Adding loan officers to significantly increase capture rates

Well-positioned for eventual resurgence in the purchase market

Private Label(Franchise Channel)

Real Estate (Realogy JV)(Franchise Channel)

Key Mortgage Origination Sources

Acquire loans through a network of high quality correspondents,maintaining rigorous underwriting standards

Focus on Credit Unions and small community banks

Correspondent Lending(Opportunistic Channel)



Unpaid principal balance (UPB) of capitalized servicing portfolio has steadily grown

- Capitalized servicing portfolio grew 9% or $12.3B to $147.1B in 2011

Weighted average interest rate1 decreased to 4.9%, enhancing long-term portfolio value

MSR asset valued at 82 bps of capitalized UPB at year-end 2011

Servicing fees of 31 bps in 4Q11

Disciplined Growth in Mortgage Servicing Portfolio

1 On capitalized portfolio only

Wtd. Avg.Int. Rate1

129.1 127.7 128.5 130.1 131.9 134.8 141.1 142.4 144.3 147.1

20.7 23.8 24.6 25.9 27.531.3 29.6 31.3

33.8 35.3149.8 151.5 153.1 156.0 159.4

166.1 170.7 173.7178.1 182.4

$0

$50

$100

$150

$200

20085.9%

20095.5%

2010 Q15.5%

2010 Q25.4%

2010 Q35.3%

2010 Q45.2%

2011 Q15.1%

2011 Q25.0%

2011 Q34.9%

2011 Q44.9%

(In

$Billions)

PHH Servicing Portfolio

Capitalized Servicing Portfolio Subserviced Loans & Loans in Warehouse



Low Delinquency Rates Relative to Peers

Consistently outperformed industry in delinquency performance

Total Delinquencies as of 9/30/11Capitalized Servicing Portfolio Total Delinquency Compared to Industry

13.54%

11.52%

8.37%7.63%

4.80%

10.70%

0%

4%

8%

12%

16%

Bank ofAmerica

Chase Citi WellsFargo

PHH LargerServicer

Index

Source: PHH data as of 9/30/11; Industry data as of 10/31/11 from McDash/LPS

0%

2%

4%

6%

8%

10%

12%

14%

16%

2004 2005 2006 2007 2008 2009 2010 2011 AllYears

PHH Industry

(Excludes FC and REO)

Year of Origination

Source: Inside Mortgage Finance 11/25/2011; PHH rate based on UPB



Strategic Objectives for Fleet Management

Continue earnings momentum

Leverage franchise to expand customer base

Emphasis on services growth

Expand vehicle remarketing capabilities

Further penetrate existing clients for incremental fee-based services

Continuous technology innovation and improvement

100% subscription to full service suite

Driver and client satisfaction at 90+%

Grow truck lease syndications



GE25%

ARI20%

16%

Leaseplan12%

Wheels10%

Enterprise8%

Donlen (Hertz)5%

Others4%

Fleet Management Services

Fully-integrated provider of vehicle leasing and fleetmanagement services

Mission-

Diversified lease portfolio of industry leader lessees

Nearly one-third of Fortune 500 in client base

More than 50% of net investment in fleet leases to investment

grade lessees

No client represents more than 5% of portfolio

High barriers to entry

Vendor network difficult to replicate

Significant purchasing power

Technology tie-in with client operations

An innovation leader in technology for fleet industry

Recurring, fee-based revenue and cash flow streams Minimal lease residual and credit risk

Approximately 97% -

as of December 31, 2011

Charge-offs averaged less than 3 basis points per annum for

the last 10 years

Management Services U.S. Fleet Served Market Share (fleets>15 units)1

1 Source: 2011 Automotive Fleet Fact Bookreflecting data as of FYE 2010 for leased andservice only vehicles, excluding "unserved" market share

Selected Clients



Healthcare &Pharmaceuticals

15%

Utilities: Electric15%

Services:Business

9%

Chemicals,Plastics and

Rubber9%

Beverage, Foodand Tobacco

8%

Energy: Oil & Gas5%

Construction &Building

5%

High TechIndustries

4%

CapitalEquipment

4%

Services:Consumer

4%

Other (16Industries < 3.5%)

22%

Diversified and High Quality Fleet Lease Portfolio

U.S. Lease Portfolio Characteristics (as of 9/30/11)

Broad array of client industries

Predominance of vehicle types are mission critical for our customers

Utility/service vehicles comprise 82% of portfolio

1As of 9/30/11, excludes FirstFleet lease book value of $93 million

Light Duty Trucks

53%

Cars18%

Medium DutyTrucks13%

Heavy DutyTrucks

7%Equipment

4%

Trailers3%Forklifts

2%

Top 200 U.S. Client Breakout by Industry Classification1 U.S. Lease Distribution by Vehicle Type1



Conclusion

Attractive investment opportunity- High quality assets

- Strong cash flows

- Defensible market position

Solid fundamental trends

- New client additions- Increasing volume with existing clients

- Recent wide Mortgage Production margins

Four key strategies to create shareholder value1. Disciplined growth in franchise platforms

2. Operational excellence3. Customer service

4. In near term, liquidity, cash generation and deleveraging

Strong position to retire 2012 & 2013 debt maturities



Core earnings (loss) pre-tax involves differences from Mortgage Services Segment profit (loss) and Income (loss) before income taxes

computed in accordance with GAAP. Core earnings (loss) (pre-tax) should be considered as supplementary to, and not as a substitutefor, Mortgage Services Segment profit (loss) and Income (loss) before income taxes attributable to PHH Corporation computed in

puted inaccordance with GAAP. Tangible book value and tangible book value per share should be considered as supplementary to, and not as aancialposition.

The Company believes that these Non-GAAP financial measures can be useful to investors because they provide a means by whichdjustmentsand activities that investors may consider to be unrelated to or tend to obscure the underlying economic performance of the business for agiven period.

tandingges in et-related fairegment netrevenue, Net income (loss) attributable to PHH Corporation and Basic earnings (loss) per share attributable to PHH Corporation in

accordance with GAAP.

Non-GAAP Financial Measures Disclosures



Non-GAAP Financial Measures Disclosures(continued)

Core earnings (loss) (pre-tax and after-tax) and core earnings (loss) per share

Core earnings (loss) (pre-tax and after-uding unrealizeds and prepayments aswell as realized and unrealized changes in the fair value of derivatives that are intended to offset changes in the fair value of mortgage servicingrights. The changes in fair value of mortgage servicing rights and related derivatives are highly sensitive to changes in interest rates and aredependent upon the level of current and projected interest rates at the end of each reporting period.

Value lost from actual prepayments and recurring cash flows are recorded when actual cash payments or prepayments of the underlying loans arereceived, and are included in core earnings based on the current fair value of the mortgage servicing rights at the time the payments are received.

The presentation of core earnings is designed to more closely align the timing of recognizing the actual value lost from prepayments in the mortgageservicing segment with the associated value created through new originations in the mortgage production segment. The Company believes that it willlikely replenish most, if not all, realized value lost from changes in value from actual prepayments through new loan originations and actively managesand monitors economic replenishment rates to measure its ability to continue to do so. Therefore, management does not believe the unrealizedchange in value of the mortgage servicing rights is representative of the economic change in value of the business as a whole.

incentivesbased upon the achievement of core earnings targets, subject to potential adjustments that may be made at the discretion of the Human Capital and

Limitations on the use of Core Earnings

Since core earnings (loss) (pre-tax and after-e excludingunrealized changes in value of mortgage servicing rights, such measures may not appropriately reflect the rate of value lost on subsequent actualpayments or prepayments over time. As such, core earnings (loss) (pre-tax and after-tax) and core earnings (loss) per share may tend to overstateoperating results in a declining interest rate environment and understate operating results in a rising interest rate environment, absent the effect of anyng rights.


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Tangible book value and Tangible book value per share

value of goodwill and other intangible assets. Tangible book value per share is a measure of tangible book value, on a per share basis,using the number of shares of outstanding PHH Corporation common stock as of the applicable measurement date. Certain of the-to-tangible net worth ratio covenants, and such ratios are calculated using a Accordingly, theCompany believes that tangible book value and tangible book value per share provide useful supplementary information to investors.

Non-GAAP Financial Measures Disclosures(continued)


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2011 2010 2011 2010

21$ 313$ (202)$ 115$

8 6 25 28

13 307 (227) 87

55 (287) 510 166

13 11 11 36

Net derivative loss related to MSRs 4 - 3 -

85$ 31$ 297$ 289$

13$ 181$ (127)$ 48$

33 (170) 301 98

7 6 6 21

Net derivative loss related to MSRs 2 - 2 -

55$ 17$ 182$ 167$

0.22$ 3.26$ (2.26)$ 0.87$

0.58 (3.06) 5.34 1.76

0.14 0.11 0.12 0.38

Net derivative gain related to MSRs 0.04 - 0.03 -

0.98$ 0.31$ 3.23$ 3.01$

Three Months

Ended December 31,

Year Ended

December 31,

Certain MSRs fair value adjustments:

Basic income per share attributable to PHH Corporation

- as reported

Market-related, net of taxes(1)(4)

Credit-related, net of taxes(2)(4)

Core earnings per share

Core earnings (after-tax)

Net income attributable to PHH Corporation - as

reported


Income before income taxes - as reported

Less: net income attributable to noncontrolling interest

Segment income


Market-related(1)

Credit-related(2)

Core earnings (pre-tax)

Market-related, net of taxes(1)(3)

Credit-related, net of taxes(2)(3)

Non-GAAP Financial Measures Reconciliation

1 Represents the Change in fair value of MSRs due to changes in market inputs and assumptions used in the valuation model.2Represents the Change in fair value of MSRs primarily due to changes in estimated portfolio delinquencies and foreclosures.3 Incremental effective tax rate of 41% was applied to the MSRs fair value adjustments to arrive at the net of taxes amounts.4Basic weighted-average shares outstanding of 56.504 million and 55.699 million for the three months ended December 31, 2011 and 2010, respectively and 56.349 millionand 55.480 million for the years ended December 31, 2011 and 2010, respectively were used to calculate per share amounts.

($ in millions, except per share amounts)


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As of December 31,

2011 2010

PHH Corporations stockholder's equity - as reported $ 1,442 $ 1,564

Goodwill (25) (25)

Intangible assets (33) (36)Tangible Book Value $ 1,384 $ 1,503

Common shares issued and outstanding 56,361,155 55,699,218

Tangible book value per share $ 24.56 $ 26.98

($ in millions, except per share amounts)

Non-GAAP Financial Measures Reconciliation Tangible Book Value

Documents

PHHInvestor Presentation February 13, 2012-1