Wyndham aims to add debt as EBITDA grows, pay out or use cash flow

By Aleesia Forni

Columbus, Ohio, Oct. 6 - Wyndham Worldwide Corp. intends to make use of its cash rather than retain it on the balance sheet "for a long period of time," according to chief financial officer Thomas G. Conforti.

The company expects to use about $100 million of its cash for dividends and deploy the rest for share repurchases or mergers and acquisitions.

As of June 30, the company reported cash and cash equivalents of roughly $295 million.

Additionally, the company has no plans to deleverage from a debt perspective.

"With that objective of not delevering, that means that every year that we add $100 million of EBITDA, it's like we will add $300 million of debt to our balance sheet," Conforti said during the company's presentation at Imperial Capital's Global Opportunities Conference on Thursday.

Conforti continued that the company expects to generate between $600 million and $700 million of free cash flow each year "for as long as the eye can see."

The company is currently rated investment grade and aims to stay there.

"So in addition to the $600 million to $700 million of free cash flow, if things go according to plan, we'll also be prepared to lever up some more as we grow EBITDA," Conforti said.

Wyndham is a Parsippany, N.J.-based provider of hospitality products and services.

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