Wyndham Destinations, Inc. (NYSE:WYND) Q4 2019 Earnings Conference Call - Final Transcript

Feb 26, 2020 • 08:30 am ET


Wyndham Destinations, Inc. (NYSE:WYND) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to Wyndham Destinations Fourth Quarter and Full Year 2019 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Chris Agnew. Please go ahead.

Christopher Agnew

Thank you, Catherine. Good morning, and welcome. Before we begin, we'd like to remind you that our discussions this morning will include forward-looking statements.

Actual results could differ materially from those indicated in the forward-looking statements, and the forward-looking statements made today are effective only as of today. We undertake no obligation to publicly update or revise these statements. The factors that could cause actual results to differ are discussed in our SEC filings, and you can find a reconciliation of the non-GAAP financial measures discussed in today's call in the earnings press release available on our website at investor.wyndhamdestinations.com.

This morning, Michael Brown, our President and Chief Executive Officer, will provide an overview of our strategic initiatives for fourth quarter and 2019 full year results; and Mike Hug, our Chief Financial Officer, will then provide greater detail on our results and discuss our outlook. Following these remarks, we will be available to respond to your questions.

With that, I'm pleased to turn the call over to Michael Brown.

Michael D. Brown

Thank you, Chris. Good morning, everyone and thank you for joining us today. Earlier this morning, we were pleased to report full-year adjusted EBITDA of $991 million, reflecting 4% year-over-year growth and adjusted EPS of $5.62, an increase of 16% over the prior year. We delivered adjusted free cash flow of $617 million, which was above the high end of our guidance range. We continue to return cash to shareholders throughout 2019 with $340 million of share repurchases and $166 million of dividends.

Since becoming Wyndham destinations through the end of 2019, we have returned 23% of our current market cap to shareholders in 19 months.

I want to shift to our 2020 outlook. And additionally, given recent headlines concerning coronavirus, provide you with some context on the potential impact to our business. Year-to-date, we have continued to experience robust leisure travel trends. And as a result, our outlook assumes a continuation of these trends and growth in line with our long-term guidance. For the moment, the coronavirus is limited to our international operations and our outlook for 2020 does not reflect any impact from coronavirus given materiality year-to-date and uncertainty around any future impact. We are mindful that bookings and arrivals may be impacted more broadly going forward.

As context, approximately 10% of our total EBITDA comes from outside of the United States with less than 1% from Asia. We will continue to follow events closely and we are working with health authorities to ensure precautionary and proactive protocols are in place for our owners, guests and employees.

Shifting back to 2019, it was a year of notable progress and success for Wyndham Destinations. We successfully completed our first M&A activity, selling one business and buying another. We sold the North American Rentals business to Vacasa for $162