Exhibit 99.2

January 19, 2005

Dear Cendant Stockholder:

I am pleased to advise you that Cendant Corporation’s previously announced spin-off of its mortgage and fleet management services businesses to Cendant’s common stockholders will occur on January 31, 2005 through a distribution of all of the outstanding common stock of PHH Corporation. The PHH common stock will trade on the New York Stock Exchange under the symbol “PHH.”

Holders of record of Cendant common stock as of the close of business on January 19, 2005, which will be the record date for the distribution, will receive one share of PHH common stock for every 20 shares of Cendant common stock held. No action is required on your part to receive your PHH shares. You will not be required to pay for the new shares or to surrender any shares of Cendant common stock. No fractional shares of PHH common stock will be issued. If you otherwise would be entitled to a fractional share, you will receive the cash value thereof, which may be taxable to you.

The attached information statement describes the distribution of shares of PHH common stock to Cendant stockholders and contains important information, including:

I suggest that you read this information statement carefully. If you have any questions regarding the distribution, please contact Cendant’s transfer agent, Mellon Investor Services, at 800-589-8660. On behalf of the Board of Directors and the employees of Cendant Corporation, I would like to express my appreciation for your continued interest in the affairs of Cendant Corporation.

Sincerely,

Henry R. Silverman
Chairman and Chief Executive Officer

Information Statement

Distribution of

Common Shares of

PHH CORPORATION

by

CENDANT CORPORATION

to Cendant Corporation Common Stockholders

Cendant Corporation (“Cendant”) is sending you this information statement because it is distributing all of the shares of common stock of PHH Corporation held by it to the holders of Cendant’s common stock on a pro rata basis. Cendant is distributing one share of PHH’s common stock for every twenty (20) shares of Cendant common stock outstanding on the record date for the distribution. The distribution will be effective as of January 31, 2005 to holders of record of shares of Cendant common stock on January 19, 2005.

We are a leading outsource provider of mortgage and vehicle fleet management services. Prior to the spin-off, we will undergo an internal reorganization after which we will continue to own Cendant Mortgage Corporation (which will be renamed PHH Mortgage Corporation), PHH Vehicle Management Services, LLC and our other subsidiaries that engage in the mortgage and fleet management services businesses. Pursuant to our internal reorganization, Cendant Mobility Services Corporation, our relocation business, Wright Express LLC, our fuel card business, and our other subsidiaries that engage in the relocation and fuel card businesses will be separated from us and distributed to Cendant.

All of the outstanding shares of our common stock are currently owned by Cendant. Accordingly, there is no public trading market for our common stock. Our common stock has been approved for listing, subject to official notice of issuance, on the New York Stock Exchange under the symbol “PHH.”

No vote of Cendant stockholders is required in connection with this distribution. Therefore, you are not required to take any action. Cendant stockholders will not be required to pay for the shares of our common stock they receive in the distribution, or to surrender or exchange shares of Cendant common stock in order to receive shares of our common stock in the distribution, or to take any other action in connection with the distribution. Cendant is sending you this information statement, which contains additional information about us and our business, as well as a description of the distribution and certain U.S. federal income tax consequences of the distribution, for your information only.

In reviewing this information statement, you should carefully consider the matters described under “Risk Factors” beginning on page 6.

Neither the Securities and Exchange Commission nor any state securities regulator has approved our common stock to be issued to you pursuant to this distribution or determined if this information statement is accurate or adequate. Any representation to the contrary is a criminal offense.

This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The date of this information statement is January 19, 2005.

i

SUMMARY

Except as expressly indicated or unless the context otherwise requires, the “Company”, “PHH”, “we”, “our” or “us” means PHH Corporation, a Maryland corporation, and its subsidiaries.

The Reorganization and Spin-off

1

2

Our Business Following the Spin-off

We are a leading outsource provider of mortgage and vehicle fleet management services. Following the completion of the spin-off, we will operate in two segments, mortgage services and fleet management services.

Mortgage Services. Our mortgage services segment originates and services mortgages through Cendant Mortgage, which will be renamed PHH Mortgage in connection with the spin-off. We are a centralized mortgage lender conducting business throughout the United States with a focus on retail mortgage originations in which we provide mortgages directly to consumers. In the United States, for the nine months ended September 30, 2004, we were the sixth largest retail originator of residential mortgages, a leading outsource provider of mortgage origination services to financial institutions and the only mortgage company authorized to harness the power of the Coldwell Banker, Century 21 and ERA brand names.

We originate mortgage loans through three principal business channels: financial institutions (on a private label or co-branded basis for clients including Merrill Lynch Credit Corporation, American Express Membership Bank, PNC Bank, N.A., The Northern Trust Company and Charles Schwab Bank), real estate brokers (including brokers associated with brokerages owned or franchised by Cendant as well as independent brokers) and relocation (mortgage services for clients of Cendant Mobility). We originate mortgage loans utilizing three distinct origination platforms: teleservices (also known as our Phone In, Move In program), field sales representatives and closed loan purchases. Our mortgage services segment also provides appraisal services.

In connection with the spin-off, we intend to form a venture (the “mortgage venture”) with Cendant, to be named PHH Home Loans, LLC, for the purpose of originating and selling mortgage loans primarily sourced through Cendant’s owned residential real estate brokerage and relocation businesses. For the nine months ended September 30, 2004, approximately 29% of all loans originated by our mortgage services segment were derived from these sources. We will contribute to the mortgage venture certain of our assets and employees that currently support originations from these sources. The mortgage venture will have a 25-year term, subject to earlier termination upon the occurrence of certain events or at Cendant’s election at any time after the eighth anniversary of the completion of the spin-off by giving two years’ notice to us. See “Our Business Following the Spin-off — Segments — Mortgage Services Segment” for a more complete description of our mortgage business and “Intercompany Arrangements — Cendant-PHH Mortgage Venture” for a more complete description of the mortgage venture.

Fleet Management Services. Our fleet management services segment provides commercial fleet management services to corporate clients and government agencies through PHH Vehicle Management Services, LLC (d/b/a PHH Arval). We are the second largest provider of outsourced commercial fleet management services in both the United States and Canada.

3

Fleet management services include vehicle leasing, fleet policy analysis and recommendations, benchmarking, vehicle recommendations, ordering and purchasing vehicles, arranging for vehicle delivery and administration of the title and registration process, as well as tax and insurance requirements, pursuing warranty claims and remarketing used vehicles. We also provide fuel, maintenance, accident and similar management services, which assist our corporate and governmental clients in the effective management and control of automotive expenses by providing cards that permit a client’s representatives to purchase gasoline or other fleet-related products and services through a network of merchants. As of September 30, 2004, we had more than 317,000 vehicles leased and approximately 303,000 additional vehicles serviced under fuel, maintenance, accident and/or similar management arrangements. See “Our Business Following the Spin-off — Segments — Fleet Management Services Segment” for a more complete description of our fleet management business.

Our Strategy

We seek to achieve growth in revenues and income from our mortgage and fleet management services businesses. The key aspects of our business strategy are to:

Unaudited Pro Forma Summary Financial Data

The following Unaudited Pro Forma Summary Financial Data have been derived from our historical financial statements and adjusted to give effect to the following:

4

See “Unaudited Pro Forma Financial Information” for more detail regarding the information provided below.

5

RISK FACTORS

Risks Related to PHH’s Business

The termination of our mortgage venture with Cendant or of our exclusivity rights under the mortgage venture could have a material adverse effect on our financial condition and our results of operations.

Our proposed mortgage venture with Cendant would have accounted for approximately 13% of our pro forma net income for the nine months ended September 30, 2004. Pursuant to the terms of the operating agreement for the mortgage venture, Cendant will have the right to terminate the mortgage venture upon the occurrence of certain events, including a material breach by us of our obligations or by our affiliates of their obligations under any of the mortgage venture transaction documents (and such breach is not cured within the requisite cure period), the occurrence and continuance for a period of six consecutive months or more of any regulatory order or governmental proceeding that restricts the mortgage venture’s ability to originate mortgage loans in a manner that adversely affects the value of quarterly distributions from the mortgage venture to its members or a change in control of PHH under certain circumstances. In addition, beginning on the eighth anniversary of the completion of the spin-off, Cendant will have the right at any time upon two years’ notice to us to terminate its interest in the mortgage venture. A termination of the mortgage venture could have a material adverse effect on our financial condition and our results of operations. In addition, the mortgage venture operating agreement will provide that Cendant’s real estate services division will exclusively recommend the mortgage venture as the provider of mortgage loans to the independent sales associates and customers of Cendant’s owned residential real estate brokerage business (“NRT”) and Cendant Mobility and to U.S.-based employees of Cendant. However, Cendant will have the right to terminate this exclusivity covenant, following notice and a cure period, if:

A termination by Cendant of its exclusivity obligations with respect to the mortgage venture would permit Cendant to recommend other competing mortgage lenders as providers of mortgage loans to independent sales associates and customers of NRT and Cendant Mobility, which would adversely affect our results of operations.

Adverse developments in general business, economic and political conditions could have a material adverse effect on our financial condition and our results of operations.

Our businesses and operations are sensitive to general business and economic conditions in the United States. These conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets and the general condition of the U.S. economy, both nationally and in the regions in which we conduct our businesses.

A host of factors beyond our control could cause fluctuations in these conditions, including the political environment and acts or threats of war or terrorism. Adverse developments in these general business and economic conditions, including through recession, downturn or otherwise, could have a material adverse effect on our financial condition and our results of operations.

6

Our business is significantly affected by the monetary policies of the federal government and its agencies. We are particularly affected by the policies of the Federal Reserve Board, which regulates the supply of money and credit in the United States. The Federal Reserve Board’s policies affect the size of the mortgage origination market as well as the pricing of our interest-earning assets and the cost of our interest-bearing liabilities. Changes in those policies are beyond our control and difficult to predict and could have a material adverse effect on our business, results of operations and financial condition.

Our business is affected by fluctuations in interest rates, and if we fail to effectively manage our exposure to changes in interest rates, our results of operations and our financial condition could be adversely affected.

The level and volatility of interest rates significantly affect the mortgage lending industry. For example, a decline in mortgage interest rates generally increases the demand for home loans as more potential homeowners seek mortgage loans and more borrowers seek to refinance existing loans, but also generally leads to accelerated payoffs in our mortgage servicing portfolio, which negatively impacts the value of our mortgage servicing rights (“MSR”) asset. We attempt to manage this risk in part through the use of derivatives. Our main objective in managing interest rate risk is to moderate the impact of changes in interest rates on our earnings over time. Our interest rate risk management strategies may result in significant earnings volatility in the short term. The success of our interest rate risk management strategy is largely dependent on our ability to predict the earnings sensitivity of our loan servicing and loan production operations in various interest rate environments, which is inherently uncertain. Significant changes in current market conditions and/or the assumptions used (including the relationship of the change in the MSR asset to the change in the derivatives) in developing our estimates of borrower behavior and future interest rates could result in a material adverse effect on our results of operations and our financial condition.

The mortgage services industry is highly competitive and, if we fail to meet the competitive challenges in our industry, our financial condition and results of operations could be materially adversely affected.

We operate in a highly competitive industry that could become even more competitive as a result of economic, legislative, regulatory and technological changes. Competition for mortgage loans comes primarily from large commercial banks and savings institutions, which typically have lower funding costs and are less reliant than we are on the sale of mortgages into the secondary markets to maintain their liquidity. In addition, technological advances and heightened e-commerce activity have increased consumers’ access to products and services generally. This has intensified competition among banking, as well as non-banking companies in offering financial products and services, with or without the need for a physical presence. If competition in the mortgage services industry continues to increase, it could have a material adverse effect on our financial condition and results of operations.

The businesses in which we engage are heavily regulated, and changes in the regulatory environment affecting our businesses could have a material adverse effect on our financial condition and our results of operations.

We are subject to many federal, state and local laws, rules and regulations that affect our business, including mortgage and real estate related regulations such as the Federal Real Estate Settlement Procedures Act (“RESPA”), which restricts the payment of fees or other things of value in consideration for the referral of real estate settlement services, including mortgage loans, as well as rules and regulations related to taxation, vicarious liability and accounting. Our mortgage services business, in general, is heavily regulated by mortgage lending laws at the federal, state and local levels, and proposals for further regulation of the financial services industry are continually being introduced. The establishment of the mortgage venture and the continuing relationship between and among the mortgage venture, Cendant and us will be subject to the anti-kickback requirements of RESPA. With respect to our fleet management business, we are subject to unlimited liability as the owner of leased vehicles in three jurisdictions (the States of New York and Maine and the District of Columbia) and Canada and limited liability in approximately six additional jurisdictions under the legal theory of vicarious liability.

7

Congress and state legislatures, as well as federal and state regulatory agencies, review such laws, rules, regulations and policies and periodically propose changes that could significantly affect or restrict the manner in which we conduct our business. It is possible that one or more legislative proposals may be adopted or one or more regulatory changes, changes in interpretations of laws and regulations, judicial decisions or governmental enforcement actions involving the mortgage industry may be implemented that would have a material adverse effect on our financial condition and our results of operations. For example, certain trends in the regulatory environment could result in increased pressure from our clients for us to assume more residual risk on the value of the vehicles at the end of the lease term. If this were to occur, it could have a material adverse effect on our results of operations.

Our failure to comply with such laws, rules or regulations, whether actual or alleged, could expose us to fines, penalties or potential litigation liabilities, including costs, settlements and judgments, any of which could have a material adverse effect on our financial condition and our results of operations.

If a change in control transaction occurs, some of our mortgage loan origination arrangements with financial institutions could be subject to voluntary termination at the election of such institutions.

Approximately 22% of our pro forma consolidated revenue for the nine months ended September 30, 2004 would have been derived from our financial institutions channel, pursuant to which we provide outsourced mortgage loan services for customers of our financial institution clients such as Merrill Lynch Credit Corporation and American Express Membership Bank. Our agreements with some of these financial institutions provide the applicable financial institution with the right to terminate its relationship with us prior to the expiration of the contract term if we complete a change in control transaction with a third party acquiror that is a competitor of such financial institution. Accordingly, completion of such a change in control transaction could have a material adverse effect on our business, results of operations and financial condition. Furthermore, the existence of these termination rights could discourage offers from third parties seeking to acquire us or could reduce the amount of consideration an acquiror would be willing to pay in an acquisition transaction. Although in some cases these contracts would require the payment of liquidated damages in such event, such amounts may not fully compensate us for all of our actual or expected loss of business opportunity for the remaining duration of the contract term.

Risks Related to the Spin-off

For the past seven years, we have not been an independent company and we may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent company.

Prior to the spin-off, our business was operated by Cendant as part of its broader corporate organization, rather than as an independent company. Cendant or one of its affiliates performed various corporate functions for us, including, but not limited to:

Following the spin-off, neither Cendant nor any of its affiliates will have any obligation to provide these functions to us other than the transition services that will be provided by Cendant and its affiliates that are described in “Intercompany Arrangements — Transition Services Agreement.”

If, once our transition services agreement expires, we do not have in place our own systems and business functions, we do not have agreements with other providers of these services or we are not able to make these changes cost-effectively, we may not be able to operate our business effectively and our profitability may decline. If Cendant or its affiliates do not continue to perform effectively the transition

8

services that are called for under the transition services agreement, we may not be able to operate our business effectively after the spin-off.

Historically, we have benefited from Cendant’s size and purchasing power in procuring goods, technology and services. We may be unable to obtain such goods, technology and services as a separate, stand-alone company at prices and on terms as favorable as those available to us prior to the spin-off, and we may not have access to financial and other resources comparable to those available to us prior to the spin-off.

Our agreements with Cendant and its affiliates may not reflect terms that would have resulted from arm’s-length negotiations between unaffiliated parties.

The agreements related to our separation from Cendant, including the separation, transition services and other agreements, were not the result of arm’s-length negotiations and thus may not reflect terms that would have resulted from arm’s-length negotiations between two unaffiliated parties. This could include, among other things, allocation of assets, liabilities, rights, indemnifications and other obligations between Cendant and us. See “Intercompany Arrangements.”

We may be required to satisfy certain indemnification obligations to Cendant and its affiliates, or we may not be able to collect on indemnification rights from Cendant and its affiliates.

We and Cendant and our respective affiliates will each agree to indemnify the other for certain liabilities and obligations following the completion of the spin-off. Our indemnification obligations could be significant. We will be required to indemnify Cendant for any taxes incurred by it and its affiliates as a result of any action, misrepresentation or omission by us or one of our subsidiaries that causes the distribution of our common stock by Cendant or transactions relating to the internal reorganization to fail to qualify as tax- free. We also will be responsible for 13.7% of any taxes resulting from the failure of the spin-off or transactions relating to the internal reorganization to qualify as tax-free, which failure is not due to the actions, misrepresentations or omissions of Cendant or us or our respective subsidiaries. Such percentage is based on the relative pro forma book net values of Cendant and us as of September 30, 2004, without giving effect to any adjustments to the book values of certain long-lived assets that may be required as a result of the spin-off and the related transactions. We cannot determine whether we will have to indemnify Cendant or its affiliates for any substantial obligations after the spin-off. We also cannot assure you that if Cendant or any of its affiliates is required to indemnify us for any substantial obligations, they will be able to satisfy those obligations.

Our historical and pro forma financial information may not be representative of results we would have achieved as an independent company or will achieve in the future.

Because our business will be substantially changed in the reorganization we will undergo in connection with the spin-off, our historical financial information incorporated by reference in this information statement does not reflect what our results of operations, financial position or cash flows would have been had we been an independent company during the periods presented. For this reason, as well as the inherent uncertainties of our business, the historical financial information is not indicative of what our results of operations, financial position, cash flows or costs and expenses will be in the future.

Although our pro forma adjustments reflect the estimated effect of changes that we expect will occur in our balance sheet and income statements as a result of the spin-off and the related transactions, given the inherent uncertainties of our business and the spin-off process, they do not necessarily indicate the actual changes in our balance sheet and income statements that we may experience as a publicly-traded, independent company.

A failure to maintain our investment grade ratings could impact our ability to obtain financing on favorable terms and could negatively impact our business.

Our current senior debt credit ratings from Moody’s Investors Service, Standard & Poor’s and Fitch Ratings are Baa1, BBB+ and BBB+, respectively. Following our announcement of the spin-off in October 2004, Moody’s Investors Service placed our senior debt “under review for possible downgrade”,

9

Standard & Poor’s assigned this debt a “CreditWatch Negative” and Fitch Ratings assigned a “Rating Watch Positive” to our senior debt ratings.

Should we fail to maintain our investment-grade ratings as a result of the spin-off or future events or circumstances:

Risks Related to PHH Common Stock

There may be a limited public market for our common stock and our stock price may experience volatility.

Prior to the spin-off, there has not been a public market for our common stock. Our common stock has been approved for listing, subject to official notice of issuance, on the New York Stock Exchange under the symbol “PHH”. However, there can be no assurance that an active trading market for our common stock will develop as a result of the spin-off or be sustained in the future. In addition, the stock market has from time to time experienced extreme price and volume fluctuations that often have been unrelated to the operating performance of particular companies. Changes in earnings estimates by analysts and economic and other external factors may have a significant impact on the market price of our common stock. Fluctuations or decreases in the trading price of our common stock may adversely affect the liquidity of the trading market for our common stock and our ability to raise capital through future equity financing.

Provisions in our charter documents, the Maryland General Corporation Law and our stockholder rights plan may delay or prevent our acquisition by a third party.

Following the spin-off, our charter and by-laws will contain several provisions that may make it more difficult for a third party to acquire control of us without the approval of our board of directors. These provisions will include, among other things, a classified board of directors, advance notice for raising business or making nominations at meetings and “blank check” preferred stock. Blank check preferred stock will enable our board of directors, without stockholder approval, to designate and issue additional series of preferred stock with such dividend, liquidation, conversion, voting or other rights, including the right to issue convertible securities with no limitations on conversion, as our board of directors may determine, including rights to dividends and proceeds in a liquidation that are senior to the common stock.

We are also subject to certain provisions of the Maryland General Corporation Law which could delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our stockholders receiving a premium over the market price for their common stock or may otherwise be in the best interest of our stockholders. See “Certain Provisions of the Maryland General Corporation Law and Our Charter and By-laws.”

In addition, our board of directors is expected to approve the adoption of a stockholder rights plan, which will become effective upon consummation of the spin-off. This plan entitles our stockholders to acquire shares of our common stock at a price equal to 50% of the then current market value in limited circumstances when a third party acquires beneficial ownership of 15% or more of our outstanding common stock or commences a tender offer for at least 15% of our common stock, in each case, in a transaction that our board of directors does not approve. Because, under these limited circumstances, all of our stockholders would become entitled to effect discounted purchases of our common stock, other than the person or group that caused the rights to become exercisable, the existence of these rights would significantly increase the cost of acquiring control of our company without the support of our board of

10

directors. The existence of the rights plan could therefore deter potential acquirers and reduce the likelihood that you receive a premium for your common stock in an acquisition.

Certain provisions of our mortgage venture with Cendant could discourage third parties from seeking to acquire us or could reduce the amount of consideration they would be willing to pay our stockholders in an acquisition transaction.

Pursuant to the terms of our mortgage venture with Cendant, Cendant will have the right to terminate the mortgage venture at its election at any time on or after the eighth anniversary of the completion of the spin-off by providing two years’ notice to us. In addition, under the operating agreement for the mortgage venture, Cendant may terminate the mortgage venture if we effect a change in control transaction with a competitor of Cendant or with certain other third parties. In connection with such termination, we would be required to make a cash payment to Cendant of an amount equal to its allocable share of the mortgage venture’s trailing twelve months net income multiplied by the greater of the number of years remaining in the first ten years of the mortgage venture’s term and two. The existence of these termination provisions could discourage third parties from seeking to acquire us or could reduce the amount of consideration they would be willing to pay to our stockholders in an acquisition transaction.

11

FORWARD-LOOKING STATEMENTS

Forward-looking statements in our public filings or other public statements are subject to known and unknown risks, uncertainties and other factors which 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. These forward-looking statements were based on various factors and were derived utilizing numerous important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements include the information concerning our future financial performance, business strategy, projected plans and objectives. Statements preceded by, followed by or that otherwise include the words “believes”, “expects”, “anticipates”, “intends”, “projects”, “estimates”, “plans”, “may increase”, “may fluctuate” 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. You should understand that the following important factors and assumptions could affect our future results and could cause actual results to differ materially from those expressed in such forward-looking statements:

Other factors and assumptions not identified above were also involved in the derivation of these forward-looking statements, and the failure of such other assumptions to be realized as well as other factors may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond our control.

You should consider the areas of risk described above in connection with any forward-looking statements that may be made by us and our businesses generally. Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless required by law. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

12

WHERE YOU CAN FIND MORE INFORMATION

We and Cendant are each subject to the informational reporting requirements of the Securities Exchange Act of 1934, as amended, and, accordingly, each company files registration statements, reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”), including financial statements. If you would like more information about us, we urge you to read our reports filed with the SEC.

You may read and copy Cendant’s and our reports filed with the SEC at the public reference facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C. You may also inspect these reports at the SEC’s website at http://www.sec.gov, or you may obtain copies of these materials at prescribed rates from the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms.

We “incorporate by reference” certain information into this information statement by referring you to another document filed separately with the SEC containing such information. The information incorporated by reference is deemed to be part of this information statement, except for any information superseded by information in this information statement. This information statement incorporates by reference the documents set forth below that we have previously filed with the SEC. These documents contain important information about us.

All documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this information statement and prior to the date of the spin-off are incorporated by reference into and are deemed to be a part of this information statement from the date of filing of those documents.

You should rely only on the information contained in this document or that to which we have referred you. We have not authorized anyone to provide you with any additional information. This information statement is dated as of the date indicated on the cover page. You should not assume that the information contained in this information statement is accurate as of any date other than such date, and neither the mailing of this information statement to stockholders nor the issuance of our shares of common stock in the spin-off shall create any implication to the contrary.

The following documents, which have been filed by us with the SEC (SEC file number 001-07797), are incorporated by reference into this information statement:

13

THE REORGANIZATION AND SPIN-OFF

The Distribution

On January 5, 2005, the board of directors of Cendant approved the distribution of shares of our common stock held by Cendant to the holders of Cendant common stock. You will receive one share of our common stock for every twenty (20) shares of Cendant common stock you own on the record date for the distribution. The distribution will be payable on January 31, 2005, the distribution date, to holders of record of Cendant common stock at the close of business on January 19, 2005, which is the record date for the distribution.

You will not be required to pay any cash or other consideration for the shares of our common stock distributed to you or to surrender or exchange your shares of Cendant common stock to receive the distribution of our common stock. Each share of our common stock that you will receive will be entitled to one vote per share. See “— U.S. Federal Income Tax Consequences of the Distribution” for information regarding the tax consequences of the spin-off, including the taxability of cash payments that will be made in lieu of issuing fractional shares of our common stock.

Reorganization of Our Business Prior to the Spin-off

In connection with and prior to the spin-off, we will undergo an internal reorganization after which we will continue to own Cendant Mortgage Corporation (which will be renamed PHH Mortgage Corporation), PHH Vehicle Management Services, LLC and our other subsidiaries that engage in the mortgage and fleet management services businesses. Pursuant to our internal reorganization, Cendant Mobility Services Corporation, our relocation business, and Wright Express LLC, our fuel card business, and our other subsidiaries that engage in the relocation and fuel card businesses will be separated from us and distributed to Cendant. In addition, in January 2005, Cendant contributed to us Speedy Title and Appraisal Review Services, LLC, its appraisal services business, which provides appraisal review services through a network of approximately 4,000 professional licensed appraisers, providing local coverage throughout the United States, as well as credit research, flood certification and tax services.

On November 23, 2004, our Wright Express subsidiary filed a registration statement with the SEC for the sale by Cendant of its entire ownership interest in Wright Express in a planned initial public offering. As the initial public offering is expected to take place subsequent to the internal reorganization, we will not receive any of the proceeds of such offering if it is completed.

When and How You Will Receive the Distribution

Cendant will distribute the shares of our common stock on January 31, 2005, the distribution date. Mellon Investor Services, which currently serves as the transfer agent and registrar for Cendant’s common stock, will serve as transfer agent and registrar for our common stock and as distribution agent in connection with the distribution.

As a Cendant stockholder who held shares of Cendant common stock at the close of business on the record date, you will be credited, as of the distribution date, with the number of shares of our common stock which you are entitled to receive in the distribution. However, if you own shares of Cendant common stock at the close of business on the record date and sell those shares in the regular way market prior to or on the distribution date, you will also be selling your right to receive the shares of our common stock that would have been distributed to you in the distribution. Your ownership of our common stock will be registered in book-entry form. Book-entry registration refers to a method of recording stock ownership in which no physical share certificates are issued to stockholders.

Commencing on or shortly after the distribution date, if you hold physical stock certificates representing your shares of Cendant common stock and you are the registered holder of the Cendant shares represented by those certificates, the distribution agent will mail to you an account statement indicating the number of shares of our common stock that have been registered in book-entry form in your

14

name. If you have any questions concerning the mechanics of having shares of our common stock registered in book-entry form, we encourage you to contact Mellon Investor Services at the address and telephone number set forth on page 18 of this information statement under “— PHH Transfer Agent and Registrar.”

Most Cendant stockholders hold their Cendant shares through a bank or brokerage firm. In such cases, the bank or brokerage firm holds the stock in “street name” and ownership is recorded on the bank or brokerage firm’s books. If you hold your Cendant stock through a bank or brokerage firm, your bank or brokerage firm should electronically credit your account for the shares of our common stock that you are entitled to receive in the distribution. If you have any questions concerning the mechanics of having shares of our common stock held in “street name,” we encourage you to contact your bank or brokerage firm.

Following the distribution date, you may obtain at any time without charge a certificate representing the shares of our common stock registered in your name in book-entry form by contacting Mellon Investor Services at the address and telephone number set forth on page 18 of this information statement under “— PHH Transfer Agent and Registrar.”

The distribution agent will not deliver any fractional shares of our common stock in connection with the spin-off. Instead, Mellon Investor Services, as distribution agent, will aggregate all fractional shares and sell them on behalf of those holders who otherwise would be entitled to receive a fractional share. The aggregate net cash proceeds of these sales, which may be taxable for U.S. federal income tax purposes, will be distributed ratably to such holders. See "— U.S. Federal Income Tax Consequences of the Distribution” for an explanation of the tax consequences of the spin-off and the receipt of cash, if any. No assurances can be given with respect to the price at which the fractional shares will be sold. If you physically hold Cendant common stock certificates and are the registered holder, you will then receive a check from the distribution agent in an amount equal to your pro rata share of the total net cash proceeds of that sale. We estimate that it will take approximately two weeks from the distribution date for the distribution agent to complete these distributions. If you hold your Cendant stock through a bank or brokerage firm, your bank or brokerage firm should electronically credit your account for any cash in lieu of fractional shares of our common stock that you may be entitled to receive in the spin-off.

U.S. Federal Income Tax Consequences of the Distribution

The following is a summary of the material U.S. federal income tax consequences of the spin-off. This summary is based on the Internal Revenue Code, or Code, and Treasury regulations as well as judicial and administrative interpretations of the Code, all as in effect on the date of this information statement, and is subject to changes in these or other laws, any of which may have retroactive effect. This summary is for general information only and does not purport to be a complete description of the consequences of the spin-off nor does it address the effects of any state, local or foreign tax laws on the spin-off. The tax treatment of a Cendant stockholder may vary depending upon that stockholder’s particular situation, and certain stockholders (including, but not limited to, insurance companies, tax-exempt organizations, financial institutions, broker-dealers, individuals who received Cendant common stock upon the exercise of employee stock options or otherwise as compensation, and non-U.S. persons) may be subject to special rules not discussed below. This summary assumes that the Cendant stockholders hold their Cendant common stock as capital assets.

Each stockholder is urged to consult its tax advisor as to the specific tax consequences of the spin-off to that stockholder, including the effect of any state, local or foreign tax laws, and of changes in applicable tax laws.

Cendant expects to receive an opinion from Skadden, Arps, Slate, Meagher & Flom LLP, substantially to the effect that the spin-off should qualify under section 355 of the Code as a tax-free distribution for U.S. federal income tax purposes. The opinion of Skadden, Arps will be based on, among other things, certain assumptions as well as on the accuracy of certain factual representations and statements that we and Cendant make to Skadden, Arps. In rendering its opinion, Skadden, Arps also will rely on certain covenants that we and Cendant enter into, including the adherence by Cendant and us to certain restrictions on our future actions.

15

If any of the representations or statements that we or Cendant make are, or become, inaccurate or incomplete, or if we or Cendant breach any of our covenants, the spin-off might not qualify as a tax-free transaction for U.S. federal income tax purposes. You should note that Cendant does not intend to seek a ruling from the Internal Revenue Service, or IRS, as to the U.S. federal income tax treatment of the spin-off. The opinion of Skadden, Arps is not binding on the IRS or a court, and there can be no assurance that the IRS will not challenge the validity of the spin-off as a tax-free distribution for U.S. federal income tax purposes or that any such challenge ultimately would not prevail.

Assuming that the spin-off qualifies as a tax-free transaction under Section 355 of the Code, the following describes the material U.S. federal income tax consequences to us, Cendant and Cendant stockholders of the spin-off:

U.S. Treasury regulations require each Cendant stockholder who receives our common stock in the spin-off to attach to the stockholder’s U.S. federal income tax return for the year in which the stock is received a detailed statement setting forth such data as may be appropriate to demonstrate the applicability of Section 355 of the Code to the spin-off. Within a reasonable period of time after the spin-off, Cendant will provide to our stockholders, either directly or through our stockholders’ banks or brokers, the information necessary to comply with this requirement.

If the spin-off were to fail to qualify as a tax-free transaction, Cendant would recognize gain equal to the excess of the fair market value of our common stock distributed to Cendant stockholders over Cendant’s adjusted tax basis in our stock. In addition, each Cendant stockholder who received our common stock in the spin-off would be treated as having received a taxable distribution in an amount equal to the fair market value of such stock on the distribution date. That distribution would be taxable to the stockholder as a dividend to the extent of Cendant’s current and accumulated earnings and profits. Any amount that exceeded Cendant’s earnings and profits would be treated first as a non-taxable dollar-for-dollar reduction in the stockholder’s tax basis in its Cendant common stock and then as capital gain from the sale or exchange of such stockholder’s Cendant common stock. In addition, certain stockholders would be subject to additional special rules governing taxable distributions, such as those that relate to the dividends received deduction and extraordinary dividends. If the spin-off were taxable, a stockholder’s tax basis in our common stock received would equal the fair market value of our common stock on the distribution date, and the holding period for that stock would begin the day after the distribution date. The

16

holding period for the stockholder’s Cendant common stock would not be affected by the fact that the spin-off was taxable.

Even if the spin-off otherwise qualifies for tax-free treatment under Section 355 of the Code, it may be disqualified as tax-free to Cendant under Section 355(e) of the Code if one or more persons were to acquire directly or indirectly stock representing a 50% or greater interest in Cendant or us during the 4-year period beginning on the date which is 2 years before the date of the spin-off as part of a plan or series of related transactions that includes the spin-off. If such an acquisition of our stock or Cendant’s stock were to trigger the application of Section 355(e), Cendant would recognize taxable gain as described above, but the distribution would remain tax-free to each Cendant stockholder.

In connection with the spin-off, we will enter into a tax sharing agreement with Cendant pursuant to which we and Cendant and our respective subsidiaries will each agree to indemnify the other for certain liabilities and obligations following the spin-off. Our indemnification obligations will include a covenant to indemnify Cendant for any losses that it and its subsidiaries incur as a result of any action, misrepresentation or omission by us or one of our subsidiaries that causes the spin-off or transactions relating to the internal reorganization to fail to qualify as tax-free. We also will be responsible for 13.7% of any taxes resulting from the failure of the spin-off or transactions relating to the internal reorganization to qualify as tax-free, which failure is not due to the actions, misrepresentations or omissions of Cendant or us or our respective subsidiaries. Such percentage is based on the relative pro forma net book values of Cendant and us as of September 30, 2004, without giving effect to any adjustments to the book values of certain long-lived assets that may be required as a result of the spin-off and the related transactions. In addition, even if we were not contractually required to indemnify Cendant for tax liabilities if the spin-off were to fail to be tax-free, we nonetheless could be legally liable for such liabilities if Cendant were to fail to pay them. See “Intercompany Arrangements — Tax Sharing Agreement” for a more detailed discussion of the tax sharing agreement between Cendant and us.

The foregoing is a summary of the material U.S. federal income tax consequences of the spin-off under current law and is for general information only. The foregoing does not purport to address all U.S. federal income tax consequences or tax consequences that may arise under the tax laws of other jurisdictions or that may apply to particular categories of stockholders. Each Cendant stockholder should consult its tax advisor as to the particular tax consequences of the spin-off to such stockholder, including the application of U.S. federal, state, local and foreign tax laws, and the effect of possible changes in tax laws that may affect the tax consequences described above.

Trading Between the Record Date and the Distribution Date

Beginning on January 19, 2005 and continuing through the close of business on the NYSE on January 31, 2005, the distribution date, there will be two markets in Cendant common stock: a “regular way” market and an “ex-distribution” market. Shares of Cendant common stock that trade in the regular way market trade with “due bills,” which are entitlements to shares of our common stock to be distributed pursuant to the distribution. Shares of Cendant common stock that trade in the ex-distribution market trade without an entitlement to shares of our common stock to be distributed in the distribution. If you sell your shares of Cendant common stock in the ex-distribution market prior to or on the distribution date, you will still receive the shares of our common stock that were to be distributed to you in respect of the shares of Cendant common stock owned by you on the record date. Both regular way and ex-distribution trading in shares of Cendant common stock take place on the NYSE.

Also beginning on January 19, 2005 and continuing through the close of trading on the NYSE on January 31, 2005, there will be a “when-issued” market in our common stock. “When-issued” trading is a temporary form of interim trading that may occur for our common stock prior to the distribution date. The when-issued market is for our common stock that will be distributed to Cendant stockholders on the distribution date. Therefore, if you are entitled to receive shares of our common stock in the distribution, you may trade this entitlement to shares of our common stock, without also trading the shares of Cendant

17

common stock you own, in the PHH common stock “when-issued” trading market. The when-issued trading in shares of our common stock also takes place on the NYSE.

All trades in the regular way market will settle on the third trading day after the trade date. All trades in the ex-distribution market and the when-issued market will settle on the fourth trading day after the distribution date, irrespective of the trade date. The due bills will settle on the third trading day after the distribution date.

Regular way trading of our common stock is expected to begin on February 1, 2005 on the NYSE under the symbol “PHH”.

Reasons for the Spin-off

Cendant’s board of directors has determined that the separation of our businesses from Cendant’s other businesses is in the best interest of Cendant and its stockholders. Both we and Cendant believe that the spin-off will provide substantial opportunities and benefits to both companies that we could not otherwise attain as a combined corporate entity. The spin-off will further Cendant’s commitment to strengthen its leadership position in the real estate and travel services sectors and to continue to divest its non-core businesses. From Cendant’s perspective, the spin-off also will reduce the volatility and complexity in its financial statements and eliminate the significant capital requirements associated with funding our mortgage and fleet management businesses.

Following the spin-off, we expect that both we and Cendant will be able to maintain a sharper focus on our core businesses and our growth opportunities. In particular, the separation of our business from Cendant will eliminate our need to compete for capital with Cendant’s other businesses, which we believe will enhance our opportunities for growth. The spin-off also will enable us to provide incentive compensation arrangements for key employees that are directly related to the market performance of our common stock, which we believe will provide enhanced incentives for performance and improve our ability to attract, retain and motivate qualified personnel. We also expect that our businesses will be more easily understood by equity and debt investors, rating agencies and others after the completion of the spin-off.

Post-Spin-off Dividend Policy

The declaration and payment of future dividends by us will be subject to the discretion of our board of directors and will depend upon many factors, including our financial condition, earnings, capital requirements of our operating subsidiaries, covenants associated with certain of our debt obligations, legal requirements, regulatory constraints and other factors deemed relevant by our board of directors. Currently, we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

PHH Transfer Agent and Registrar

The transfer agent and registrar for our common stock will be Mellon Investor Services. You may contact the transfer agent and registrar at the address set forth below or at its toll-free phone number, which is 800-589-9469. Stockholders outside the United States and Canada may contact the transfer agent and registrar by calling 201-329-8660. All correspondence should be sent to the following address:

Mellon Investor Services LLC
85 Challenger Road
Overpeck Center
Ridgefield Park, New Jersey 07660

18

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following Unaudited Pro Forma Condensed Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003 and the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended September 30, 2004 and September 30, 2003 and for the years ended December 31, 2003, 2002 and 2001 have been derived from our historical financial statements and adjusted to give effect to the following, all of which are being consummated in connection with the reorganization and spin-off pursuant to the separation agreement:

See “Intercompany Arrangements — Separation Agreement” for more information.

The Unaudited Pro Forma Condensed Consolidated Balance Sheets assume that the above-mentioned transactions occurred on the date of such balance sheet and the Unaudited Pro Forma Condensed Consolidated Statements of Operations assume that the above-mentioned transactions occurred on January 1 of each period presented.

Management believes that the assumptions used to derive the Unaudited Pro Forma Condensed Consolidated Financial Statements are reasonable under the circumstances and given the information available. The Unaudited Pro Forma Condensed Consolidated Financial Statements have been provided for information purposes and are not necessarily indicative of the financial condition or results of future operations or the actual financial condition or results that would have been achieved had the transactions occurred on the dates indicated. These Unaudited Pro Forma Condensed Consolidated Financial Statements (together with the footnotes thereto) should be read in conjunction with the information provided under the section entitled “Our Business Following the Spin-off” included elsewhere in this filing and our historical consolidated financial statements and accompanying notes thereto, which can be found in our quarterly report on Form 10-Q for the period ended September 30, 2004 filed with the Securities and Exchange Commission on November 2, 2004 and our annual report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission on March 1, 2004.

The Unaudited Pro Forma Condensed Consolidated Statements of Operations do not reflect any income from our relocation and fuel card businesses, which will be classified as discontinued operations, or material non-recurring charges which will impact net income within the 12 months following the transaction, including: (i) any adjustment to the book value of certain long-lived assets, including goodwill and other intangible assets, that may be required, which, based upon current available information, we estimate would be approximately $236 million and which would be recorded as a non-recurring impairment charge to earnings in the first reporting period following the spin-off; (ii) any premium paid by us, net of derivative activity, in connection with the planned redemption of $443 million of aggregate principal amount of outstanding unsecured indebtedness, which, based upon current available information, we estimate would be approximately $21 million, net of tax, and would be recorded as a non-recurring charge to earnings in the period during which the redemption occurs; (iii) any tax provision associated with separating the appraisal business from Cendant upon spin-off, which we currently estimate to be approximately $24 million and (iv) any transaction costs, substantially all of which will be paid by Cendant. The Unaudited Pro Forma Condensed Consolidated Balance Sheets reflect the impact of these non-recurring charges.

19

20

21

PHH CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2004 AND DECEMBER 31, 2003

22

23

24

25

PHH CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

26

ANALYSIS OF PRO FORMA RESULTS OF OPERATIONS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 2003

Discussed below are our consolidated results of operations and the results of operations for each of our reportable segments on a pro forma basis giving effect to the planned distribution of our relocation and fuel card businesses to Cendant, Cendant’s contribution of its appraisal services business to us in January 2005, the planned equity contribution to us by Cendant of $100 million in cash and Cendant’s assumption of $55 million of our pension-related liabilities and the subsequent planned distribution of our common stock to Cendant stockholders by Cendant and any related transactions described in the accompanying notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements presented above. Management evaluates the operating results of each of our reportable segments based upon revenue and “EBITDA,” which is defined as net income before non-program related depreciation and amortization, income taxes and minority interest. Our presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.

Our pro forma condensed consolidated results of operations comprised the following:

Pro forma net revenues for the nine months ended September 30, 2004 decreased $177 million (9%) due principally to reduced mortgage refinancing activity industry-wide. Expenses declined by less than 1% as the reduction in mortgage-related expenses associated with the reduced volume mentioned above was substantially offset by increased vehicle depreciation and interest expense in our fleet management business. See the discussion presented below regarding results of our reportable segments for further explanation of the revenue and expense fluctuations in each of our reportable segments. Our pro forma effective tax rate for the nine months ended September 30, 2004 and 2003 was 40.2% and 41.1%, respectively. The decrease in the effective tax rate primarily relates to lower state taxes. Our pro forma operating results are also reduced by minority interest expense that represents the portion of earnings that are attributable to Cendant’s ownership interest in the mortgage venture. During the nine months ended September 30, 2004, our pro forma minority interest expense decreased by $28 million from the comparable prior year period as a result of decreased profitability in the mortgage business due to the lower mortgage refinancing activity industry-wide. As a result of the above-mentioned items, our pro forma net income decreased by $72 million.

27

Following is a discussion of the pro forma results of each of our reportable segments:

Mortgage Services. Our mortgage services segment includes the origination (funding either a purchase or refinance), sale and servicing of residential mortgage loans. We originate mortgage loans through three principal business channels: financial institutions, real estate brokers and relocation. We may also purchase mortgage loans originated by third parties. Upon the closing of a residential mortgage loan originated or purchased by us, the mortgage loan is typically warehoused for a period up to 60 days and then sold into the secondary market (which is customary in the mortgage industry). Mortgage loans held for sale represent those mortgage loans originated or purchased by us and pending sale to permanent investors. We primarily sell our mortgage loans to government sponsored entities (e.g., Fannie Mae, Freddie Mac and the Government National Mortgage Association). Upon sale, we generally retain the servicing rights and obligations of the underlying mortgage loans. A mortgage servicing right, or MSR, is the right to receive a portion of the interest coupon and fees collected from the mortgagor for performing specified mortgage servicing activities, which consist of collecting loan payments, remitting principal and interest payments to investors, holding escrow funds for payment of mortgage related expenses such as taxes and insurance, and otherwise administering our mortgage loan servicing portfolio.

Loan origination and commitment fees paid by the borrower in connection with the origination of mortgage loans and certain direct loan origination costs are deferred until such loans are sold to investors. Mortgage loans pending sale are recorded on our balance sheets at the lower of cost or market value on an aggregate basis. Sales of mortgage loans are generally recorded on the date a loan is delivered to an investor. Gains or losses on sales of mortgage loans are recognized based upon the difference between the selling price and the carrying value of the related mortgage loans sold. The capitalization of the MSRs also occurs upon sale of the underlying mortgages into the secondary market. Upon initial recording of the MSR asset, the total cost of loans originated or acquired is allocated between the MSR asset and the mortgage loan without the servicing rights based on relative fair values. Servicing revenues comprise several components, including recurring servicing fees, interest income and the amortization of the MSR asset. Recurring servicing fees and interest income are recognized upon receipt of the coupon payment from the borrower and recorded net of guaranty fees. Costs associated with loan servicing are charged to expense as incurred. The MSR asset is amortized over the estimated life of the related loan portfolio in proportion to projected net servicing revenues. Such amortization is recorded as a reduction of net servicing revenue.

28

The MSR asset is routinely evaluated for impairment, but at least quarterly. For purposes of performing our impairment evaluation, we stratify our portfolio on the basis of product type and interest rates of the underlying mortgage loans. We measure impairment for each stratum by comparing estimated fair value to the carrying amount. Fair value is estimated based upon an internal valuation that reflects management’s estimates of expected future cash flows considering prepayment estimates (developed using a third party model described below), our historical prepayment rates, portfolio characteristics, interest rates based on interest rate yield curves and other economic factors. We use a third party model to forecast prepayment rates used in the development of our expected future cash flows. The prepayment forecast is based on historical observations of prepayment behavior in similar periods comparing current mortgage interest rates to the mortgage interest rates in our servicing portfolio and incorporates loan characteristics (e.g., loan type and note rate) and factors such as recent prepayment experience, previous refinance opportunities and estimated levels of home equity. Temporary impairment is recorded through a valuation allowance in the period of occurrence as a reduction of net revenue. We periodically evaluate our MSR asset to determine if the carrying value before the application of the valuation allowance is recoverable. When we determine that a portion of the asset is not recoverable, the asset and the previously designated valuation allowance are reduced to reflect the write-down.

We also provide appraisal review services, for which fees are recognized as revenue when the services are performed, which is often prior to the home sale transaction.

Pro forma revenues and EBITDA decreased $299 million (33%) and $167 million (63%), respectively, in the nine months ended September 30, 2004 compared with the same period in 2003, primarily due to an expected decline in refinancing activity. The unfavorable impact on revenues from lower refinancing volumes was partially offset by increased revenues from mortgage servicing activities. Refinancing activity is sensitive to interest rate changes relative to borrowers’ current interest rates, and typically increases when interest rates fall and decreases when interest rates rise. The nine month period ended September 30, 2003 was marked by historically high refinancing activity, which decreased the propensity for borrowers to refinance during the corresponding period in 2004. This factor, along with increased competitive pricing pressures due to lower industry volumes, caused revenue from mortgage loan production to decrease. Typically, as refinancing activity declines, borrower prepayments also decline, which generally results in an increase in the value of the MSR asset, all other factors being equal.

Revenues from mortgage loan production declined $597 million (56%) in the nine months ended September 30, 2004 compared with the same period in 2003, substantially due to the period-over-period reduction in refinancing levels discussed above, as well as lower margins on loan sales. Our mortgage loan production revenue in any given period is driven by a mix of mortgage loans closed and mortgage loans sold. The following chart presents an analysis of production revenue from originated mortgage loans held for sale (which is generated at the time of sale) and production revenue from fee-based mortgage originations where we perform outsourced mortgage origination functions for a fee (which is generated at the time of closing):

29

Partially offsetting the decrease in production revenue was an increase of $332 million in net revenues generated from servicing mortgage loans. This increase reflects (i) a $269 million reduction in amortization expense and provision for impairment related to our MSR asset, net of derivative results, which is primarily attributable to the lower prepayment rates experienced in 2004 compared with 2003, (ii) a $36 million (11%) increase in gross recurring servicing fees (fees received for servicing existing loans in the portfolio) driven by a 13% period-over-period increase in the average servicing portfolio, which rose to $136.5 billion in the nine months ended September 30, 2004 and (iii) a $27 million increase in other servicing revenue.

Revenues from our appraisal business declined $34 million (32%) in the nine months ended September 30, 2004 compared with the same period in 2003, due to lower volumes, consistent with the expected decline in mortgage refinancing volume described above.

Operating expenses within this segment declined $132 million in the nine months ended September 30, 2004 due to the decline in refinancing volumes discussed above.

Fleet Management Services. We provide commercial fleet management services to corporate clients and government agencies. These services include vehicle leasing, fleet policy analysis and recommendations, benchmarking, vehicle recommendations, ordering and purchasing vehicles, arranging for vehicle delivery, administration of the title and registration process, as well as tax and insurance requirements, pursuing warranty claims and remarketing used vehicles. We also provide fuel, maintenance, accident and similar management services. We lease vehicles primarily to corporate fleet users under open-end operating and direct financing lease arrangements where the customer bears substantially all of the vehicle’s residual value risk. In limited circumstances, we lease vehicles under closed-end leases where we bear all of the vehicle’s residual value risk. The lease term under the open-end lease agreement provides for a minimum lease term of twelve months and after the minimum term, the lease may be continued at the lessee’s election for successive monthly renewals. For operating leases, lease revenues, which contain a depreciation component, an interest component and a management fee component, are recognized based on the lease term of the vehicle, which encompasses the minimum lease term and the month-to-month renewals. For direct financing leases, lease revenue contains an interest component, which is recognized using an interest method based on the lease term of the vehicle, which encompasses the minimum lease term and the month-to-month renewals. Amounts charged to the lessees for interest are determined in accordance with the pricing supplement to the respective lease agreement and are generally calculated on a floating rate basis and can vary month to month in accordance with changes in the floating rate index. Amounts charged to lessees for interest may also be based on a fixed rate that would remain constant for the life of the lease. Amounts charged to the lessees for depreciation are typically based on the straight-line depreciation of the vehicle over the expected lease term. Management fees are recognized on a straight- line basis over the life of the lease. Revenue for other services is recognized when such services are provided to the lessee.

Pro forma revenues increased $121 million (12%) while pro forma EBITDA remained relatively flat in the nine months ended September 30, 2004 compared with the same period in 2003, partially as a result of our acquisition of First Fleet Corporation, the operating results of which were included from the acquisition date of February 27, 2004 forward. First Fleet Corporation contributed $95 million and $2 million of revenues and EBITDA, respectively, during the nine months ended September 30, 2004. Apart from this acquisition, pro forma revenue from our fleet management operations increased $26 million, primarily due to an increase in vehicle depreciation expense. Vehicle depreciation expense is billed to our clients and, as such, is shown as both a revenue and an expense on our Consolidated Statements of Income and therefore has no impact on EBITDA. EBITDA also reflects a $7 million reduction to EBITDA resulting primarily from lower margins on our fixed-rate leases in 2004 substantially offset by a $6 million increase to fee-based income primarily from our vehicle maintenance assistance and vehicle accident services programs as a result of increased transactions.

30