EX-12 5 a13-25970_1ex12.htm EX-12

Exhibit 12

 

PHH CORPORATION AND SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

($ in millions, except ratios)

 

 

 

Year Ended December 31,

 

 

2013

 

2012

 

2011

 

2010

 

2009

Earnings available to cover fixed charges:

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

$

241

 

$

87

 

$

(202)

 

$

115

 

$

280

Plus: fixed charges

 

252

 

288

 

289

 

282

 

243

Total

 

$

493

 

$

375

 

$

87

 

$

397

 

$

523

 

 

 

 

 

 

 

 

 

 

 

Fixed charges:

 

 

 

 

 

 

 

 

 

 

Interest expense(1) 

 

$

243

 

$

280

 

$

281

 

$

274

 

$

236

Estimated interest portion of net rental expense(2) 

 

9

 

8

 

8

 

8

 

7

Total

 

$

252

 

$

288

 

$

289

 

$

282

 

$

243

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges

 

1.96

 

1.30

 

0.30 (3)

 

1.41

 

2.15

 

 

 

 

(1)             Consists of interest expense on all indebtedness including amortization of deferred financing costs.

 

(2)             One-third of rental expense net of income from subleases is deemed an appropriate representative of the interest rate factor.

 

(3)             The ratio of earnings to fixed charges was less than 1:1.  Earnings were deficient to cover fixed charges by $202 million for the year ended December 31, 2011 which was primarily due to unfavorable Valuation adjustments related to mortgage servicing rights, net.