Earnings Per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share

Earnings Per Share

2.  Earnings Per Share

Basic earnings (loss) per share attributable to PHH Corporation was computed by dividing Net income (loss) attributable to PHH Corporation for the period by the weighted-average number of shares outstanding during the period. Diluted earnings (loss) per share attributable to PHH Corporation was computed by dividing Net income (loss) attributable to PHH Corporation for the period by the weighted-average number of shares outstanding during the period, assuming all potentially dilutive common shares were issued.

The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method excludes the effect of any contingently issuable securities where the contingency has not been met and the effect of securities that would be anti-dilutive.  Anti-dilutive securities may include:

¡ outstanding stock-based compensation awards representing shares from restricted stock units and stock options;

¡ stock assumed to be issued related to convertible notes; and

¡ sold warrants related to the Company’s Convertible notes due 2014.

The computation also excludes shares related to the assumed issuance of the Convertible notes due 2014 and related purchased options as they are currently to be settled only in cash. Shares associated with anti-dilutive securities are outlined in the table below.

The following table summarizes the calculations of basic and diluted earnings (loss) per share attributable to PHH Corporation for the periods indicated:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
	(In millions, except share and per share data)
Net income (loss) attributable to PHH Corporation	$	90	$	(57)	$	142	$	18
Weighted-average common shares outstanding — basic	57,320,953		56,803,903		57,285,088		56,730,471
Effect of potentially dilutive securities:
Share-based payment arrangements(1)	140,484		—		189,649		152,126
Conversion of debt securities	7,360,737		—		7,826,754		2,518,414
Weighted-average common shares outstanding — diluted	64,822,174		56,803,903		65,301,491		59,401,011
Basic earnings (loss) per share attributable to PHH Corporation	$	1.58	$	(1.00)	$	2.48	$	0.32
Diluted earnings (loss) per share attributable to PHH Corporation	$	1.40	$	(1.00)	$	2.18	$	0.31
Anti-dilutive securities excluded from the computation of dilutive securities:
Outstanding stock-based compensation awards	1,109,118		2,066,270		650,818		1,623,297
Assumed conversion of debt securities	—		4,195,717		—		—

(1) Represents incremental shares from restricted stock units and stock options.  For the three and six months ended June 30, 2013, excludes 719,606 shares that are contingently issuable for which the contingency has not been met.  For the three and six months ended June 30, 2012, excludes 358,984 shares that are contingently issuable for which the contingency has not been met.