Earnings Per Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share

Earnings Per Share

2.  Earnings Per Share

Basic earnings or loss per share attributable to PHH Corporation was computed by dividing Net income or loss attributable to PHH Corporation for the period by the weighted-average number of shares outstanding during the period. Diluted earnings or loss per share attributable to PHH Corporation was computed by dividing Net income or 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 or loss per share attributable to PHH Corporation for the periods indicated:

	Three Months Ended
	March 31,
	2014		2013
	(In millions, except share and per share data)
Net (loss) income attributable to PHH Corporation	$	(42)	$	52
Weighted-average common shares outstanding — basic	57,543,886		57,248,825
Effect of potentially dilutive securities:
Share-based payment arrangements(1)	—		239,361
Conversion of debt securities	—		8,297,949
Weighted-average common shares outstanding — diluted	57,543,886		65,786,135
Basic (loss) earnings per share attributable to PHH Corporation	$	(0.73)	$	0.90
Diluted (loss) earnings per share attributable to PHH Corporation	$	(0.73)	$	0.79
Anti-dilutive securities excluded from the computation of dilutive securities:
Outstanding stock-based compensation awards(2)	2,367,992		479,323
Assumed conversion of debt securities	9,584,725		—

(1)	Represents incremental shares from restricted stock units and stock options.
(2)	For the three months ended March 31, 2014, excludes 554,804 shares that are contingently issuable for which the contingency has not been met.