- Additional Proxy Soliciting Materials (definitive) (DEFA14A)
2009年5月23日 - 4:34AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
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PHH Corporation
2009 Proxy Contest
Presentation
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Forward Looking Statements
Statements in this presentation that are not historical facts are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are
subject to known and unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking statements.
Statements preceded by, followed by or that otherwise include the words "believes,"
"expects," "anticipates," "intends," "projects," "estimates," "plans," "potential," "may
increase," "may result," "will result," "may fluctuate," "run rate," "outlook," and similar
expressions or future or conditional verbs such as "will," "should," "would," "may" and
"could" are generally forward-looking in nature and not historical facts. Certain factors that
could cause actual results, performance or achievements to differ materially from those
expressed in such forward-looking statements are described under the headings "Cautionary
Note Regarding Forward-Looking Statements" and "Risk Factors" in the Company's most
recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q. Investors are cautioned
not to place undue reliance on any forward-looking statements. Except for our ongoing
obligations to disclose material information under the federal securities laws and applicable
stock exchange listing standards and unless otherwise required by applicable law, we
undertake no obligation to release publicly any updates or revisions to any forward-looking
statements or to report the occurrence or non-occurrence of anticipated or unanticipated
events.
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Basis of Presentation of Financial Data
Unless noted otherwise in this presentation, all reported financial data is being presented as of the period ended March
31, 2009 (unaudited).
Non-GAAP Financial Measures
This presentation, in slides nos. 21, 22, 26, 33, 45 and 49, contains certain financial measures that are not calculated in
accordance with U.S. generally accepted accounting principles ("GAAP"), including "Non-GAAP Operating Profit" and
"Adjusted Segment Profit (Loss)" for each of our Mortgage Production, Mortgage Servicing and Fleet Management
Services segments. As "Non-GAAP Operating Profit" and "Adjusted Segment Profit (Loss)" are incomplete measures of
the Company's financial performance and involve differences from segment profit computed in accordance with GAAP,
these non-GAAP financial measures should be considered as supplementary to, and not as a substitute for, segment
profit computed in accordance with GAAP as a measure of the Company's financial performance. The Company believes
that these non-GAAP financial measures are useful to investors because they provide a means by which investors can
evaluate the Company's underlying core operating performance, exclusive of certain items that investors may consider to
be non-core in nature. The Company also believes that any meaningful analysis of the Company's financial performance
by investors requires an understanding of the factors that drive the Company's underlying core operating performance as
distinguished from the factors that are included in computing segment profit in accordance with GAAP and that may
obscure such core operating performance over time. Reconciliations of these non-GAAP financial measures to the most
comparable GAAP measure as required by Regulation G are shown in Appendix A attached to this presentation.
Important Additional Information
PHH Corporation, on May 7, 2009, filed a proxy statement in connection with its 2009 Annual Meeting of Stockholders
and advises its stockholders to read that proxy statement because it contains important information. Stockholders can
obtain a free copy of that proxy statement and other documents (when available) that PHH files with the Securities and
Exchange Commission at the Commission's website at www.sec.gov. That proxy statement and these other documents
are also available free of charge by directing a request to PHH Corporation, Attn: Investor Relations, 3000 Leadenhall
Road, Mt. Laurel, New Jersey 08054 or visiting PHH's website at www.phh.com under the "Investor Relations" tab.
PHH, its directors and named executive officers may be deemed to be participants in the solicitation of proxies from PHH
stockholders in connection with the 2009 Annual Meeting of Stockholders. Information regarding the names, affiliations
and interests of such individuals is contained PHH's proxy statement referred to in the preceding paragraph.
Important Disclosures
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Company Overview & History
PHH's Solid Track Record
PHH's Strategic Priorities
PHH's Opposition to Pennant's Nominees
Corporate Governance
Conclusion
Appendix
Contents
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I. Company Overview & History
Overview
Leading Outsource Provider of
Mortgage and Vehicle Fleet
Management Services
3 Business Segments:
Mortgage Production
Mortgage Servicing
Fleet Management Services
A Top U.S. Mortgage Originator
$9 Billion in Q109 originations
A Top U.S. Mortgage Servicer
$149 Billion portfolio in Q109
2nd Largest North American Fleet
Management Services Provider
History
50+ Year Operating History of Focusing on
Service & Client Relationships
February 2005 - Cendant Spin-Off
March 2007 - Proposed Sale to GE/Blackstone
April 2007 - Pennant Publicly Opposes
Proposed Sale to GE/Blackstone
September 2007 - Stockholders Overwhelmingly
Approve Proposed Sale to GE/Blackstone - 86%
of Votes Cast Voted "FOR" Proposed Sale
January 2008 - GE/Blackstone Agreement
Terminated - PHH Received $50 million
Termination Fee
October 2008 - Sandra Bell Appointed New CFO
April 2009 - James Egan Appointed As New
Independent Director & Audit Committee Chair
May 2009 - Announced Q109 Net Income of
$2M and Q109 Non-GAAP Operating Profit of
$119M
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Our Businesses
Relationship driven outsource provider in the mortgage origination, mortgage servicing and fleet
services industries
#1 Mortgage Outsourcer
35 private label clients
#4 Retail originator for Q109*
Market potential - expect to gain market share as financial institutions exit the mortgage business
and look to outsource
#10 Servicer of Mortgage Loans for Q109*
High quality servicing platform
Fannie Mae - "Superior" peak score
Freddie Mac - Tier 1 for performing and non-performing evaluations
No operational limits to expansion of servicing capacity
#2 Fleet Services provider in North America**
Provide both fleet leasing and service products such as fuel cards, maintenance services, etc.
Stable asset base and predictable cash flows
Both businesses focused on credit quality
Extremely low credit losses
Prime mortgage originator
Never offered option arms and very limited subprime and Alt A production
* Source: Inside Mortgage Finance, 2009
** Source: Automotive Fact Book, 2008
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Experienced Senior Management Team
Terence W. Edwards
Director, President and CEO, PHH Corporation
Former President and CEO, PHH Mortgage
29 Year Veteran of PHH
Sandra E. Bell
Executive Vice President and CFO, PHH
Corporation
Former Executive Vice President and CFO, The
Federal Home Loan Bank of Cincinnati
Joined PHH in 2008
George J. Kilroy
Director and Executive Vice President, PHH
Corporation
President and CEO, PHH Arval
30 Year Veteran of PHH
Mark R. Danahy
Senior Vice President, PHH Corporation
President and CEO, PHH Mortgage
8 Year Veteran of PHH
William F. Brown
Senior Vice President, General Counsel &
Secretary, PHH Corporation
Senior Vice President, General Counsel &
Secretary, PHH Mortgage
23 Year Veteran of PHH
Mark E. Johnson
Senior Vice President and Treasurer, PHH
Corporation
12 Year Veteran of PHH and Affiliates
Michael D. Orner
Vice President and Controller, PHH Corporation
Joined PHH in 2005
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Established in 1984
A leading provider of private label mortgage solutions
A top originator and servicer of mortgage loans
Unique origination platform focused on organic growth
Comprised of two segments:
Production - originate, purchase and sell prime mortgage loans (average FICO score
on originations of 725 in 2008) through financial institutions, real estate brokers and
corporate relocation programs
Servicing - service mortgage loans originated by PHH
PHH Mortgage Overview -
Top Originator and Servicer
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PHH Mortgage Market Share Rankings
Source: Inside Mortgage Finance, 2009
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PHH Mortgage Mission Statement
Our Mission
We promise to treat customers like family while
providing financing for the American dream.
The experience will be smooth, easy, and at
times fun. We will do this with unequalled
passion and expertise.
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Origination Business Model
3%
Secondary
Market
transaction
66%
31%
Consumer
Origination platform
Investor services
Relocation
Real Estate Brokers
Financial Institutions
PLS Face-to-Face
Wholesale/
Correspondent
PLS Teleservices
Client relationship
Services
Servicing
PLS Internet
Bundled origination
assistance and
mortgage servicing
Access to high-quality customer base through three business channels
Limited credit risk on mortgage loans originated
Fee-based loans (comprised of loans brokered to third parties and loans originated and held for
investment on outsource client balance sheet) represented 37% of originations in 2008
Loans closed to be sold into capital markets are generally sold within 60 days
Recurring fee stream through retained servicing rights
Unique Mortgage Origination Model
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Selected Private Label Mortgage Services Clients
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Private Label Client Signings & Prospects
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Fleet Management Services Business
Leadership position
Founded fleet management industry in 1946
Product breadth and quality
PHH offers fully integrated services
Innovation leader in technology for Fleet industry
Customer focus
Historical superior performance in client retention
Bausch & Lomb's 2007 "Corporate Citizenship of the year" award
Merck's 2006 "Outstanding Strategic Supplier Collaboration" award
UTC's 2006 General Procurement Key Supplier of the Year
Award-winning management information systems and technology platform
2009 Equipment Leasing and Finance Association Operations & Technology Excellence Award
2008 American Business Award best product or service for PHH GreenFleet SM
2007 American Business Award finalist best product or service for PHH Collision Prevention (r)
2007 Information Week top 500 innovative IT organizations
2006 American Business Award best product or service for PHH Onboard (r)
Minimal residual value risk on leased assets
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GE PHH Wheels ARI Enterprise LeasePlan Others
East 809500 548000 292000 482000 225000 385000 244061
2nd largest* vehicle management services
provider in United States and Canada
combined
Fully integrated service provider
Technology leader
Consistent and long standing client
relationships - servicing nearly one-third of
Fortune 500 companies
Exceptional asset performance - average 3
bps of charge-offs, annually, over the last 10
years
Significant fee income and minimal residual risk
(95% of leases are open-end where the client
assumes residual risk)
*Source: Automotive Fleet 2008 Fact Book,
excluding unserved markets.
Fleet Management Services Overview
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Selected Fleet Management Services Clients
20+ Year Clients
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II. PHH's Solid Track Record
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Status of 2006 Top 30 Mortgage Originators
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1 Year Comparative Stock Performance -
PHH v. Competitors
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PHH - 2 Year Stock Performance
Pennant Publicly Opposes
GE/Blackstone Deal- $31.50/sh
Blackstone Acquisition
Financing Troubles
Announced
GE/Blackstone
Agreement Terminated
Lehman Bankruptcy
Credit Crisis
Begins
Extreme
Interest Rate Volatility
New
Mortgage
World
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Highlights for Q109
Net income of $2M
Basic and fully diluted EPS of $0.04
Non-GAAP operating profit of $119M
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Segment Highlights for Q109
Mortgage Production & Servicing Segments
Mortgage Production Segment:
Robust margins and product mix changes drive Q109 segment results
$113M segment profit
$9B origination volume
Positive trends have continued into Q209
Mortgage Servicing Segment:
Negatively impacted by industry-wide credit trends
Credit losses more favorable than the industry but reflect challenging overall economic
and employment conditions
Mortgage servicing rights ("MSR") portfolio valued at 97 bps
Negatively impacted by $71M of fair value adjustments
Actual prepayment speeds continue to be favorable relative to modeled assumptions
Combined mortgage segments result in $5M pre-tax loss
Non-GAAP operating profit of $112M
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Segment Highlights for Q109
Fleet Management Services Segment
$7M segment profit for Q109
$1M favorable impact from cost reductions implemented in late 2008
Q109 profitable despite $11M in increased debt fees
Significant progress in lease rate changes
New leases entered into in 2009 more closely match actual funding costs
Demonstrates the strength of our long term relationships with clients
We expect leasing margins to improve late in 2009 and continue into 2010
Year-to-date new vehicle order volumes down resulting primarily from broader
economic factors
The Federal Reserve has expanded asset classes eligible for the TALF
program
Commercial fleet leasing asset is now an eligible asset class
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II. PHH's Solid Track Record:
Mortgage Segments
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Mortgage Production Segment
Q109 Overview
Strong first quarter production results
1st mortgage closing volumes up 96% from Q408
Total application volume up 73% from Q408
Pricing margins remain healthy
Purchase closing volumes are 29% of total volumes
As purchase volume increases, we believe we are well prepared to capture share
Maintaining cost discipline as we increase production capacity
New Mortgage World
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Adjusted Mortgage Production
Segment Results*
For the quarter ended March 31, 2009
(Adjusted Segment profit $ in millions)
$113
* This is a non-GAAP financial measure. For a reconciliation to the most comparable GAAP financial measure, see Appendix A.
$123
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New Mortgage World
Pricing Margin and Volume
Industry loan production capacity remains constrained
Pricing margin remains at the high end of this scale
Pricing margin has been above 100 bps for 9 months
Pricing Margin shown above reflects the market price of the loan at the time of interest rate lock commitment relative to our
basis including an expected cost of hedging the loan plus any net interest carry to be earned prior to sale as well as any
discount points paid by the borrower. Excluded from margin is the base servicing value, borrower paid fees (other than
discounts) and the cost of originating the loan.
Pricing margin (bps)
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Mortgage Production Segment Results
In addition to higher margins, production shifted to a more profitable mix of
business in Q109 v. Q108
Retail 1st mortgage business increased from 73% to 80% of closed volume
Greater profitability with higher revenues but also higher costs
Eliminated or improved less profitable relationships
Loans closed to be sold increased from 71% to 82% of total closing volumes
- More profitable in current pricing environment
Q109 MSR additions capitalized at 5.1 multiple, reflecting value of very low
note rate loans with higher retained servicing strip
Operating costs:
Reductions in fixed costs in Q109 v. Q108 totaling $14 million offset by
increased variable costs
Continued focus on scaling costs to maintain profitable production segment in
lower volume scenarios
Combined mortgage segments' employee headcount is down approximately 350
at the end of Q109 v. Q108
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Production Segment 2009 Outlook
Given nearly $9B in Q109 closings and positive momentum into Q209,
we expect strong 2009 production earnings
Announced one new PLS client signing in Q109
Pipeline remains strong
Fannie Mae and MBA are predicting over $2 trillion in industry volumes
for 2009 which, if realized, translates to over $40 billion in originations
for PHH assuming a 2% market share
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Mortgage Production Segment
Annualized Potential Profitability Sensitivity
The matrix on the following slide shows annualized production profitability
sensitivity, consistent with our prior webcast
We believe the matrix continues to provide an approximation of the
segment profitability, on an annualized basis, utilizing the following basic
assumptions:
Break even for the business is $27B in closings assuming margin of 80 bps
Each additional $1B in closing volume would be expected to generate
approximately $8-14M in segment profit at 80 bps
Loans closed to be sold is assumed at roughly 2/3 of total closings and margins
in excess of 80 bps can be applied to the volume of loans closed to be sold
Revenues are recognized throughout the origination process from the
interest rate commitment date through the date of sale
Comparison of quarterly periods may be distorted relative to the annualized
period presented due to the potential effects of revenue recognition timing
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Mortgage Production Segment
Annualized Potential Profitability Sensitivity
The projected results presented in the matrix above are representative of normalized results of operations for the production segment and
assume an annualized volume level and an average margin for that annualized volume. Consistent with a normalized result it assumes
there are no mark-to-market adjustments for loans held for sale such as scratch and dent, second lien and jumbo loans. Volumes and
margins at any point in time or over a shorter time period may vary materially from those annualized assumptions. Other market factors
may result in actual production segment results differing materially from the normalized results presented above.
The projected results presented above may vary by the greater of $5 million or 20% in either direction due to factors that impact results in
ways that may not be predictable.
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Segment loss of $118M
Results negatively impacted by $71M mark to market valuation adjustment
Actual prepayments result in $65M reduction in MSR value
Interest on escrows and float benefit declined by approximately $21M from Q108
We continued to build foreclosure and credit reserves
Portfolio delinquency improved as seasonally expected; we believe our portfolio
performance is among the best in the industry
Portfolio delinquency levels (based on loan count) improved 45 bps from year-end to 3.58% at
3/31/09
Foreclosure, REO, and bankruptcies (based on loan count) increased 36 bps from year-end to 2.26%
at 3/31/09
Assuming stable market conditions, we expect that Servicing could generate
annualized segment profit of 9 to 11 bps and cash flows of 24 to 26 bps on the
capitalized servicing portfolio (excluding any cost of hedging)
Expected segment underperformance in 2009 due to:
Increased prepayments due to increased refinance activity
Current low short term rates limit float/escrow earnings opportunity
Credit markets driving high funding costs
Continued high level of provisions for credit loss on recourse obligations
Delinquencies driving higher segment operating costs
Mortgage Servicing Segment
Q109 Overview
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Adjusted Mortgage Servicing
Segment Results*
For the quarter ended March 31, 2009
(Adjusted Segment loss $ in millions)
<$118>
* This is a non-GAAP financial measure. For a reconciliation to the most comparable GAAP financial measure, see Appendix A.
<$47>
<$37>
<$32>
<$19>
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Bridging Q109 Adjusted Mortgage Servicing Segment Results to
Hypothetical Annualized Servicing Segment Profit of 9-11bps of
Capitalized Servicing Portfolio
Hypothetical annualized servicing segment profit of 9-11 bps
of capitalized servicing portfolio based on:
Stable market conditions
Higher escrow and float quarterly earnings of $21M assuming average 1-mo LIBOR
since 1/1/05 of 3.80%
Versus 1-mo LIBOR as of 5/15/09 of 0.33%
Quarterly MSR fair value adjustment of $32M due to assumed decline in annual
prepayment rate to 10% of capitalized servicing portfolio
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MSR Valuation
MSR valued at 97 bps as of 3/31/09, down 2 bps from 12/31/08
Primary mortgage rates are down slightly at 3/31/09 from year end
Actual prepayment speeds approximately 60% of modeled prepayment speeds during
Q109
Modeled prepayment speeds incorporate borrowers' rate incentive, including
borrowing costs associated with estimated FICO & current LTV
Assumes all borrowers have ability to refinance, including the ability to reduce the loan
balance to qualify for the new loan
Valuation assumes additional prepayments resulting from The Homeowner
Affordability and Stability Plan ("HASP") program which is expected to lower the cost
of refinance for certain high LTV borrowers & drove a significant portion of $71M
mark-to-market of MSR
Valuation does not include potential revenue opportunities associated with
government sponsored loan modification programs
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Superior Servicing Portfolio Performance
PHH portfolio compared to MBA Industry Average
First Lien 60 or more days delinquent
Based on prime mortgages only
Source: National Delinquency Survey, Mortgage Bankers Association
PHH Servicing Portfolio Performance is consistently better than the MBA Industry Average.
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Mortgage Recourse & Reserves
The Credit enhancement program exposure is expected to be substantially reduced by the end of Q209.
Other recourse represents the recourse obligations on the population of loans serviced by PHH that have been specifically
identified with recourse. The delinquencies presented are specific to such loans.
Off balance sheet recourse UPB includes the loans serviced by PHH that have been specifically identified with recourse to
PHH. In addition to the identified $392M of UPB with recourse obligations, the $45M reserve contemplates additional loans not
yet specifically identified as recourse obligations.
The underlying unpaid principal for loans in foreclosure and real estate owned are presented net of the associated reserves.
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Atrium currently has $264M in restricted cash held in trust to pay claims as of 3/31/09
We expect Atrium to begin paying reinsurance claims in Q209
Future premiums will also be available to pay claims
Cash and future premiums more than adequate to cover expected losses
Current reserves established at $97M
Projections:
Future premium income $126M on loans reinsured
Future paid losses $219M all from book years 2004 - 2008
Loss projections are based on a variety of assumptions, including the characteristics of
the current reinsured portfolio, historical loss experiences (loss curves) based on
industry data, projected home price declines, projected unemployment rates, projected
prepayment levels and other factors.
Atrium Reinsurance
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Impact of Government Mortgage Programs
PHH will participate in government modification programs for GSE loans
The servicer will receive $1,000 per year and up to $3,000 for the modification
provided the borrower stays current for three years
An additional $500 may be paid to the servicer if an at-risk borrower is current at the
time of the loan modification
High quality of PHH servicing portfolio lessens earnings potential from HASP
modification programs
We project to begin closing modifications monthly on GSE loans starting in May
Current Loan modification pipeline of approximately 7,000 GSE loans of which over
1/3 are not delinquent
Represents borrowers that have contacted us and meet initial screening requirements
We are currently servicing approximately 22,000 additional GSE loans that are
delinquent or in foreclosure
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2009 Mortgage Opportunities & Risks
Mortgage markets driven by Fed policy-unpredictable & subject to change
Impact of government initiatives for loan modifications and refinancing higher LTV loans
is just beginning, not yet reflected in results other than MSR value
Jumbo market remains illiquid
Expected eligibility of jumbo mortgages for TALF program may create liquidity and
investor demand
Economies of scale and consolidation continue to drive PLS opportunities
Impact of current recessionary trends remains unknown
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Mortgage Outlook - assuming stable rates
Outlook for 2009 assuming stable interest rate environment:
Strong Mortgage production segment profits
Continued high level of actual prepayments from the loan servicing portfolio
Minimal MSR valuation adjustments
Provisioning for credit costs may slow as housing prices stabilize and the government
modification programs are implemented
Increasing purchase origination volume assuming home prices stabilize and home
sales improve
Mortgage production segment results are expected to more than offset:
MSR value lost due to actual loan prepayments
Continued provision for credit losses
Quarterly run rate for combined mortgage segments' profits for remainder of 2009 of
approximately $70M, using Q109 run rate, assuming minimal MSR fair value
adjustments
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New Mortgage World
At this time we believe we have balance between production and servicing due
to the "natural business hedge"
Based on assumptions listed on the prior page, we would expect combined
mortgage segments' profits of approximately $70M per quarter for the remainder
of 2009 using Q109 run rate assuming minimal MSR fair value adjustments
We believe, in a rising interest rate environment:
^ Servicing segment shows improved profitability
^ Production volume would move down; assuming $36B in annual production
and assuming pricing margins at approximately 100 bps, consistent with the
levels seen in the past 9 months, we would expect the production segment to
generate $126M in annual profit as reflected by the matrix (slide 31)
We remain focused on shifting cost from a fixed to a more variable structure
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II. PHH's Solid Track Record:
Fleet Management Services Segment
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Fleet Management Services Segment
Q109 Overview
Lease rate changes have been implemented to more closely match funding
costs prospectively
New vehicle purchases reflective of re-priced client leases
Impact of new funding costs will become clearer as deals are completed
2008 cost reduction targets met
Margins set to improve over time as runoff of current lease portfolio occurs and
is replaced with re-priced units
Promising sales discussions with large prospective clients for full services
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Adjusted Fleet Management Services
Segment Results *
For the quarter ended March 31, 2009
(Adjusted Segment profit $ in millions)
$7
$18
* This is a non-GAAP financial measure. For a reconciliation to the most comparable GAAP financial measure, see Appendix A.
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Fleet Funding Update
Funding needs for the remainder of 2009 expected to be well under
historical levels
Businesses are cautious on new spend and resource levels needed in sales and
service functions
Uncertainties surrounding domestic motor companies have also impacted client
vehicle spend
The Federal Reserve has expanded asset classes eligible for the TALF
program
Commercial fleet leasing asset is now an eligible asset class
Canadian ABS market appears to be thawing
Canadian Secured Credit Facility (CSCF) targeting vehicle and equipment loans and
leases
Bids from bank conduits and private investors appear to be returning
Expect traction from one or more of these sources by end of Q2 or Q309
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Fleet Management Services Segment
2009 Outlook
Continue cost management initiatives
Ongoing focus on credit quality and cash flow
Increase level of consulting to key clients
Pursue opportunities for additional outsource services
Continue investments in technology
Expect $20M-$30M segment profit for 2009
Expect to return to an annualized profitability level of $70M to $80M
within 2 years
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PHH Expected Results in the New Mortgage World
Expected Q209
Results*
($ millions except per share data)
Segment Profit
Mortgage segments combined $ 70
Fleet segment $ 7
PHH combined pre-tax profit $ 77
PHH Net income after 40% tax $ 46
PHH Basic EPS** $ 0.85
* This assumes a stable interest rate environment and minimal MSR valuation adjustments
** Assuming weighted average shares outstanding of 54.4M
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II. PHH's Solid Track Record - Summarized
Stock Has Outperformed Financial Services Industry Peers
For the 12 Months Ended May 20, 2009:
Russell 2000 Financial Services Index (-37.1%) v. PHH (-6.2%)
PHH is Poised to Thrive Amid Industry Meltdown
Q109 Net Income of $2M and Q109 Non-GAAP Operating Profit of $119M
Businesses Competitively Well-Positioned
2009 Outlook is Positive
Initiatives Implemented to Capitalize on Opportunities
PHH has shifted its mortgage origination product mix to higher margin products, has eliminated or
improved less profitable relationships and is currently experiencing robust mortgage origination margins.
PHH's mortgage production segment has shifted its personnel cost structure from fixed to variable costs
that are scaleable with changes in production volumes.
PHH's fleet segment has implemented cost reduction initiatives in anticipation of 2009 volume declines.
PHH's fleet segment has, consistent with its contractual obligations, implemented lease rate changes to
more closely match funding costs prospectively.
2009 Outlook Is Positive
Given $9 billion in production volume in Q109 and positive momentum carried into Q209, we believe we
are well on track to achieve our goal for a profitable year.
We expect our combined mortgage segments to earn $70M pre-tax for Q209, assuming stable interest
rates and minimal MSR valuation adjustments.
We expect our fleet management services segment to earn $7M pre-tax for Q209 and $20M - $30M
pre-tax for the full year 2009.
Fannie Mae and MBA are predicting over $2 trillion in industry volumes for 2009 which, if realized,
translates to over $40 billion in originations for PHH assuming a 2% market share.
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III. PHH's Strategic Priorities
Profitably Grow Businesses
Capitalize on Mortgage Industry Dislocation
Develop Value-Added Innovative Solutions for Fleet Clients
Grow Market Share by Signing New Clients
Enhance Funding Profile
Implement multi-pronged, multi-sourced, multi-duration funding strategy
TALF
Canadian Government Programs
Private sources, banks and term capital markets
Form or Acquire a Depository Institution
To Further Improve PHH's Liquidity
To Lower PHH's Cost of Capital
To Enhance PHH's Profitability
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IV. PHH's Opposition to Pennant's Nominees
CHANGES TO PHH'S BOARD ARE NOT NEEDED &
PENNANT'S NOMINEES ARE NOT THE RIGHT AGENTS FOR CHANGE
PHH's Chairman (Krongard) & CEO (Edwards) Should Be Re-Elected
PHH's Board Has Risen to the Challenges and is Focused on What Matters
PHH is Well-Managed, Has a Solid Track Record and is Poised to Thrive
Replacement of PHH's Chairman & CEO with Pennant's Nominees is NOT a
Change for the Better
Krongard & Edwards Play a Key Role in Helping PHH's Board Perform its Leadership and Stewardship Functions
PHH Has Positioned Itself for Profitable Growth Under the Leadership of Krongard and Edwards
Pennant's Nominees Do NOT Merit Election to PHH's Board
Parseghian & Loren are NOT Qualified to Replace Krongard & Edwards
PHH Has Substantial Reservations About Parseghian's Record at Freddie Mac
PHH Has Substantial Reservations About Parseghian's Service as a Director of Everquest Financial
Pennant, Parseghian & Loren Have No Specific Plans or Strategies for PHH
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V. Corporate Governance
Strong Record of Acting in the Best Interests of ALL Stockholders
Highly Qualified, Engaged & Independent Board of Directors
Supermajority of Independent Directors (5 out of 7)
Independent Non-Executive Chairman of the Board
Roles Split Since the Spin-Off in February 2005
Fully Independent Audit, Compensation and Governance Committees
Finance & Risk Management Committee of Independent Directors
Thoughtful & Robust Director Candidate Evaluation Process
Stockholder Suggestions for Director Candidates Welcomed
All Candidates Given Full & Fair Consideration on the Merits
Parseghian Was Considered and Rejected Based on the Merits
Loren Evaluation Was Pre-Empted by Pennant Proxy Contest
Egan Appointed As New Independent Director & Audit Committee Chair
Performance-Based Compensation Aligned with Stockholder Interests
|
Strong Board of Directors
|
VI. Conclusion
PHH's Board Chairman (Mr. Krongard) &
PHH's Chief Executive Officer (Mr. Edwards)
Should Be RE-ELECTED
Election of Parseghian & Loren to
Replace PHH's Chairman (Krongard) & CEO (Edwards)
IS NOT MERITED
Pennant's Proposed Board Changes
are NOT in the Interests of ALL PHH Stockholders
PLEASE VOTE THE WHITE PROXY CARD!
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Quarterly Results (unaudited)
|
Condensed Consolidated Balance Sheet (unaudited, in
millions)
|
Non-GAAP Operating Profit
Non-GAAP Financial Measure Reconciliation
|
Adjusted Mortgage Production Segment Profit
1 Represents the decline in valuation of scratch and dent, second lien and construction mortgage loans.
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Adjusted Mortgage Servicing Segment Profit
1 Foreclosure related charges in excess of 3 bps of the average capitalized MSR portfolio.
2 Increase in delinquencies rates on MSR portfolio reduces expected revenues and increases cost to service. Delinquency
rates negatively impacted MSR value by an estimated $13 M.
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Adjusted Fleet Management Services Segment Profit
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Phh (NYSE:PHH)
過去 株価チャート
から 6 2024 まで 7 2024
Phh (NYSE:PHH)
過去 株価チャート
から 7 2023 まで 7 2024
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