Wyndham Worldwide has $2.2 billion debt, $41 million adjusted EBITDA

By Aleesia Forni

Columbus, Ohio, Feb. 8 - Wyndham Worldwide Corp. reported long-term debt of $2.2 billion at Dec. 31, compared with $2.1 billion at Dec. 31, 2010.

Adjusted EBITDA was $41 million for the fourth quarter, excluding $44 million of non-cash impairment charges, which represents a 3% increase compared to the fourth quarter of 2010.

Chief financial officer Thomas G. Conforti said that the company's "simple rule of thumb" is for every dollar of EBITDA the company takes on, Wyndham "would like to add three dollars of debt."

"We just have to pick the right market conditions and the timing to get it done," Conforti said during the question-and-answer portion of the company's fourth-quarter earnings call on Wednesday.

"So I think we ended the quarter at the low end of our credit range that we've talked to our rating agency friends with, and so I think we have some room and some flexibility to do some things in the near term."

The remaining borrowing capacity on the company's revolving credit facility was $771 million at the end of the year.

The company also reported cash and cash equivalents of roughly $140 million, compared with $156 million at Dec. 31, 2010.

"Our fourth-quarter results reflect continued strong business unit execution and our ongoing commitment to focus on generating cash and making smart capital allocation decisions," Conforti said.

The company's free cash flow increased to $754 million for the full year.

"I have said often that cash is the great enabler," Conforti said. "We will use our significant free cash flow to support growth and build shareholder value."

The company expects 2012 available cash to be close to $1 billion. This will enable Wyndham to invest in the business, including acquisitions, paying dividends and repurchasing stock, Conforti added.

The company expects the deployment of cash flow, combined with the organic growth of the business, to generate annual earnings per share growth of roughly 20% over the next five years.

In 2011, the company returned $1 billion of available cash to shareholders through dividends and share repurchases. The company repurchased 17% of its outstanding shares for $902 million, buying 28.7 million shares at an average price of $31.45.

Wyndham is a Parsippany, N.J.-based hospitality chain.

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