EX-99.1 3 a2082810zex-99_1.htm EXHIBIT 99.1

Exhibit 99.1

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June 2002
                        PHH
PHH CORPORATION
Annual Internotes Dealer Conference
June 20-21, 2002



 



PHH Corporation
PHH
$500,000,000
PHH
Corporation
InterNotes®
PROSPECTUS
SUPPLEMENT
MAY 30, 2002

Forward looking statements

        Statements about future results made in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and the current economic environment. The Company cautions that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in PHH's Form 10-K and 10-Q for the periods ending 12/31/01 and 3/31/02, respectively.

PHH Logo    

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PHH CORPORATION IS...


...a wholly owned, independently financed subsidiary of Cendant Corporation


PHH ARVAL
PHH
Wright Express
 
CENDANT
Mobility
 
CENDANT
Mortgage

Second largest
provider1 of fleet
management services
and
the leading fuel
card provider1
 
Largest provider1 of worldwide employee
relocation services
 
Sixth largest retail
residential mortgage
lender in the U.S.

1PHH provides services to its corporate clients on an outsourced basis


PHH Logo
 
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PHH'S revenue is equally divided between Fleet
Management and Real Estate Services

LTM 3/31/02 ($ millions)

(PIE CHART)
   (PIE CHART)
  
Flee Management   $
 1,500
54
%		 Fleet Management   $
 91
16
%
Real Estate Services   $
 1,255
46
%		 Real Estate Services   $
 493
84
%
LTM Revenue: $2,755   LTM Adj. Ebitda1: $584

1Adjusted Ebitda is defined as earnings before income taxes, non-program related depreciation and amortization and minority interest, and is adjusted to exclude certain items that are of a non-recurring or unusual nature and are not measured in assessing segment performance or are not segment specific. Our management believes Adjusted Ebitda is the most informative representation of how management evaluates performance. Our presentation of Adjusted Ebitda may not be comparable with similar measures used by other companies

PHH Logo   2

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PHH Vehicle Management is...

... a provider of fully integrated outsourced fleet management and
fuel card services principally to corporate clients and
government agencies.

PHH Vehicle Management Services Logo   WRIGHT EXPRESS® UNIVERSAL FLEET Logo

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Overview of PHH Vehicle Management

    •
    55 years of industry leadership managing client corporation's fleets

    -
    Founded fleet management industry in 1946

    -
    First offered leasing services in 1953 (created open-ended lease)

    -
    Second largest in North America

    •
    Focuses primarily on large fleets

    -
    Superior client retention

    -
    Award winning management information systems

    •
    Minimal risk exposure - 97% of leased vehicles are open-ended where residual risk is borne by the client company

PHH Vehicle
Management Services
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PHH IS #2 IN OUTSOURCED NORTH AMERICAN VEHICLE
MANAGEMENT SERVICES...

•
Second largest provider of outsourced fleet management services in both U.S. and Canada

•
Purchases over 90,000 vehicles annually

•
Current lease portfolio exceeds 316,000 units

•
Primary services

-
300,000+ fuel purchase cards

-
340,000+ maintenance cards in use in the U.S. and Canada

-
250,000+ Accident Management units

•
Long-lasting relationships

-
Over 300 clients have been with PHH for 20 years or more

PHH Vehicle
Management Services
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...and enjoys an attractive industry structure and substantial growth opportunity

Share of North American fleet vehicles under management1

    Other   31%
    Unserved   47%
    PHH Arval   5%
    Enterprise   1%
    ARI   3%
    Wheels   2%
    Citicapital   3%
    Lease Plan   1%
    GE   7%

PIE

1 Derived from Automotive Fleet Magazine

Highly fragmented industry and large, unserved customer base
provides growth opportunity

PHH Vehicle
Management Services
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PHH Vehicle Management has a track record of
exceptional risk management

Domestic net losses have been at or below five basis points of lease receivables for the past five years*

Net Losses
   (% of Total Leases)
   Total Leases
 
    
   ($ millions)
1997   0.02 % 2,858.59
1998   0.05 % 2,846.06
1999   0.04 % 2,946.76
2000   0.01 % 3,273.26
2001   0.05 % 3,413.92
PHH Vehicle
Management Services
PHH Logo		       * Per Chesapeake Funding (F/K/A Greyhound Funding) 2001 10k    

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Wright Express

•
Fuel purchase card that provides clients:

•
Driver convenience—accepted at 98% of domestic fuel facilities

•
Greater security and control compared to traditional credit card

•
Control of overall fleet costs

•
Information reported on each transaction

Wright Express Universal Fleet Logo   8

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Wright Express

•
3.9 million fuel management and corporate cards issued in the U.S. and Canada are managed by Wright Express

[GRAPHIC]   [GRAPHIC]   [GRAPHIC]   [GRAPHIC]
Universal
Fleet Card		   Cobrand
Universal Card		   Private Label Fleet
Card		   MasterCard
Corporate Card
1,100,000 cards   1,000,000 cards   1,100,000 cards   700,000 cards
Wright Express Universal Fleet Logo   9

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Cendant Mobility Services is...

... the leading provider of outsourced relocation services
worldwide, offering relocation clients a variety of services in
connection with the transfer of a client's employees.
CENDANT
Mobility
Logo

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OVERVIEW OF CENDANT MOBILITY

    •
    The largest provider of worldwide outsourced relocation services

    •
    In business since 1955 (PHH since 1971)

FOR SALE [HOUSE]   [TRUCK]   SOLD [HOUSE]

We buy the existing
home from a client's
employee, hold it in
inventory and handle
the sale...
 
.... We move the
employee's household
goods...
 
.... We assist in
finding the client's
employee a New
Home and arrange
the mortgage
Cendant Mobility Logo   11

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OVERVIEW OF CENDANT MOBILITY


•
45 years of industry leadership

•
Sales of services include moving services, expense processing, tax preparation, spouse counseling, and cultural orientation

•
Business model generates low risk, high quality receivables

$1.5

•
Average length of relationship for top 25 clients is over fifteen years
Cendant Mobility Logo   12

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Cendant Mortgage Services is...

... a premier mortgage company offering centralized delivery of a
full line of first mortgage products, marketed to consumers through
relationships with corporations, affinity groups, financial institutions
and real estate brokerage firms.
Cendant
Mortgage
Logo

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Overview of Cendant Mortgage

    •
    Originates mortgages through three primary sources - real estate brokers, relocation and financial institution/affinity groups (private label)
 
    
    
Home
Buyer

Century 21
 
Cendant
Mobility
 
Merrill
Lynch

Origination

Cendant Mortgage Logo

2001
   Total
   Purchase
   Refi
Real Estate Brokers   30%   24%   6%
Coldwell Banker®, Century 21®, ERA®            

Relocation
 
5%
 
5%
 
0%

Financial Institution/Affinity
 
 
 
 
 
 
GE Financial Network,   65%   28%   37%
American Express Centurion Bank,            
Merrill Lynch Credit Corporation            
   
 
 
    100%   57%   43%
   
 
 
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Overview of Cendant Mortgage

    •
    Focused on retail mortgages - mortgages directly with the consumer
    —
    Sixth largest1 lender of retail originated residential mortgages in the U.S.

    •
    Focused on purchase mortgages - mortgages used for the purchase of a new home as opposed to refinancings
    —
    Second largest1 retail purchase first mortgage lender in the U.S.

    •
    Cendant Mortgage is an "A" quality originator

    •
    A subsidiary of PHH since 1984

1Source: Inside Mortgage Finance (12/31/01 rankings)

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Differentiating factors

    •
    Private label/outsource relationships

    -
    Rely on well established brand names and client relationships to drive volume

    -
    Cendant Mortgage does not actively market under its own name, which minimizes the requirement to invest in or strengthen our own brand name

    •
    Central platform - minimal investment in bricks and mortar

    -
    Loans are originated and processed through a centralized platform

    •
    Separate sales and underwriting functions

    -
    Salaried and nominal commission loan originator who is NOT involved in loan processing


    -
    Allows for greater control of underwriting, approval processes, and quality
Cendant Mortgage Logo   16

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Originations and market share have grown rapidly

Year
   Refi
   Purchase
   Purchase Market Share
  
 
   ($ Bil.)

   ($ Bil.)

   (%)

  
1990   0.390   1.11   0.28 %
1991   0.769   1.56177   0.40 %
1992   1.709   2.08835   0.44 %
1993   2.921   2.69664   0.55 %
1994   1.696   6.37846   1.09 %
1995   1.324   4.43135   0.88 %
1996   2.149   8.64793   1.10 %
1997   3.065   8.65522   1.46 %
1998   10.664   15.34531   2.04 %
1999   6.392   19.17675   2.26 %
2000   1.899   20.2457   2.44 %
2001   19.415   25.107   2.81 %
Cendant Mortgage Logo   17

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Exceptional Mortgage Underwriting Track Record

•
Segregation of underwriting and marketing functions contribute to lower delinquencies

•
Foreclosure rate has generally been one-third of the MBA average

•
Jumbo loans conform to Agency guidelines in all aspects, except for size

 
   1998
   1999
   2000
   2001
  
Cendant Mortgage   0.38 % 0.34 % 0.21 % 0.51 %
MBA Average*   1.11 % 0.98 % 0.85 % 1.04 %
Cendant Mortgage Logo   * Mortgage Banking Association   18

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    PHH

    •
    Capital Structure

    •
    Liquidity

    •
    Financing Strategy

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Capital structure

($ MILLIONS)

    
  
PHH Corporation
   3/31/02
   %
  
Commercial Paper   $ 1,117 1 15 %

Medium Term Notes
 
 
663
 
 
 
$750 Feb-05 Revolver     270 1    
Other     35      
   
     
      2,085   28 %
   
     
Sheffield & SSB Warehouse     470      
Chesapeake - VFN's2     1,312      
Chesapeake - MTN's2     1,398      
Chesapeake - PMI's     293      
Other     205      
   
     
      3,680   48 %
   
     
Total Debt     5,766   76 %
   
     
Shareholder Equity     1,818   24 %
   
     
Total Capitalization   $ 7,584   100 %
Securitization Debt (OFF-B/S)3
   3/31/02
Bishop's Gate (Mortgage)      
  Commercial Paper   $ 210
  Medium Term Notes     1,750
  Equity Certificates     148
   
      2,108
   
Apple Ridge (Relocation)      
  Conduit     77
  Medium Term Notes     400
   
      477
   
VMS Canadian (Vehicle)     280
Mortgage Synthetic Lease     80
   
    $ 2,945
1
PHH completed a $443 million private placement on 5/3/02 and began a weekly retail bond offering beginning 6/3/02. The proceeds were used to repay bank debt and partially repay outstanding CP. Proceeds from the retail bond program totaled $43 million as of 6/10/02
2
Chesapeake completed a $650 million note offering on 6/10/02. Proceeds were used to partially pay down Chesapeake VFN's
3
Not consolidated (off-balance sheet)

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Sources of liquidity


•   Back-up revolving credit facilities
    -   No MAC clause
    -   No conditions to draw down relating to the results of operations of Cendant
        •   $750 million committed 2-year facility, due Feb '04
        •   $750 million committed 5-year facility, due Feb '05
        •   $125 million 1-year facility, due Nov '02
 $1,625 Million
•   Securitized funding
    -   Vehicle Securitization
        •   Chesapeake Funding LLC and a Canadian conduit
    -   Relocation Securitization
        •   Apple Ridge Funding LLC and Kenosia Funding Company LLC
    -   Mortgage Securitization
        •   Bishop's Gate Residential Mortgage Trust
        •   Mortgage Warehouses
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Financing Strategy

    •
    MTN's are used for core requirements and commercial paper/conduits for seasonality and growth

    •
    100% backup on commercial paper

    •
    MTN Indenture to protect PHH equity

    •
    Dividend test: Debt/Equity < 6.5:1

    •
    Maintenance test: Debt/Tangible Equity < 10:1

    •
    High quality assets allow for securitized funding

    •
    Conservative tangible leverage targets (5.1:1 net debt/tangible equity @ 3/31/02)

 
   1998
   1999
   2000
   2001
   3/31/01
   3/31/02
Ratio of earnings to fixed charges   2.78x   3.13x   3.41x   2.50x   3.03x   2.35x

*Per the 12/31/01 PHH 10K and 3/31/02 PHH 10Q


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INVESTMENT HIGHLIGHTS

•
A leader in each business

•
Solid financial performance

•
Low asset risk

•
Long-standing relationships with blue-chip client base

•
Compelling growth opportunities

•
Experienced management team

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                        PHH
PHH Corporation



 



PHH Corporation
PHH
$500,000,000
PHH
Corporation
InterNotes®
PROSPECTUS
SUPPLEMENT
MAY 30, 2002