Wright Express Extends Its Existing Fuel-Price Risk Management Program and Announces Changes to the Program
SOUTH PORTLAND, Maine--(BUSINESS WIRE)-- Wright Express Corporation (NYSE: WXS), a leading global provider of value-based business payment processing and information management solutions, announced today that it has extended its existing fuel-price risk management program through the first quarter of 2014.
As part of the Companys regular review of its hedging strategy and in light of recent corporate acquisitions, it is modifying its program beginning in the third quarter of 2013. Specifically, the amount of fuel hedged has been reduced from approximately 80% to 60% of fuel-price-related earnings exposure, while maintaining the use of a costless collar.
On September 17, 2012, the Company purchased instruments to cover a portion of its anticipated domestic fuel-price-related earnings exposure for the third and fourth quarters of 2013, and first quarter of 2014. At this time, Wright Express (WXS) has hedged approximately 60% of its estimated exposure through the third-quarter of 2013, 40% of its estimated fourth-quarter 2013 exposure and 20% of its estimated first-quarter 2014 exposure. Going forward, the Company intends to hedge approximately 60% of its domestic fuel-price-related earnings exposure in every quarter on a rolling basis. Since the Companys Fleet One acquisition has not closed, the Company did not include Fleet One exposure in the September 17, 2012 purchase.
The instruments are designed to enhance the visibility and predictability of the Company's future earnings. The program uses instruments that create a "costless collar" based upon both the U.S. Department of Energy's weekly diesel fuel price index and NYMEX unleaded gasoline contracts. The September 17 purchase locked in a fuel price range of approximately $3.41 to $3.47 per gallon. The following table states the approximate range of the collar and percentage of fuel-price-related earnings exposure:
|Q3 2013||Q4 2013||Q1 2014|
|Average low end of range||3.45||3.46||3.42||3.44||3.47||3.41||3.41|
|Average top end of range||3.51||3.52||3.48||3.50||3.53||3.47||3.47|
|Approximate % locked in||80%||80%||80%||80%||60%||40%||20%|
About Wright Express
Wright Express is a leading provider of value-based, business payment processing and information management solutions. The Companys fleet, corporate and prepaid payment solutions provide its more than 350,000 customers with unparalleled security and control across a wide spectrum of business sectors. The Companys operations include Wright Express Financial Services, Pacific Pride, rapid! PayCard, Wright Express Prepaid Cards Australia, Wright Express Fuel Cards Australia and CorporatePay Limited, England, as well as a majority equity position in UNIK S.A, Brazil. Wright Express and its subsidiaries employ more than 900 associates. For more information about Wright Express, please visit wrightexpress.com.
This news release contains forward-looking statements, including statements regarding Wright Express Corporation's belief that it has purchased instruments to cover varying percentages of its anticipated fuel-price-related earnings exposure through the first quarter of 2014; intention to hedge approximately 60% of its domestic fuel-price-related earnings exposure, on a rolling basis; and belief that the instruments will enhance the visibility and predictability of the Company's future earnings. When used in this press release, the words "may," "will," "could," "anticipate," "plan," "continue," "project," "intend," "estimate," "believe," "expect" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. The following factors, among others, could cause actual results to differ materially from those contained in forward-looking statements made in this news release: the effects of general economic conditions on fueling patterns and the commercial activity of fleets; the effects of the Companys international business expansion and integration efforts and any failure of those efforts; the impact and range of credit losses; breaches of the Companys technology systems and any resulting negative impact on our reputation liability, or loss of relationships with customers or merchants; the Companys failure to successfully integrate the businesses it has acquired; fuel price volatility; the Companys failure to maintain or renew key agreements; failure to expand the Companys technological capabilities and service offerings as rapidly as the Companys competitors; the actions of regulatory bodies, including banking and securities regulators, or possible changes in banking regulations impacting the Companys industrial bank and the Company as the corporate parent; the impact of foreign currency exchange rates on the Companys operations, revenue and income; changes in interest rates; financial loss if the Company determines it necessary to unwind its derivative instrument position prior to the expiration of a contract; the incurrence of impairment charges if our assessment of the fair value of certain of our reporting units changes; the uncertainties of litigation; as well as other risks and uncertainties identified in Item 1A of the Companys Annual Report on Form 10-K filed with SEC on February 28, 2012 and any subsequent securities filings. Our forward-looking statements and these factors do not reflect the potential future impact of any merger, acquisition or disposition. The forward-looking statements speak only as of the date of the initial filing of this news release and undue reliance should not be placed on these statements. We disclaim any obligation to update any forward-looking statements as a result of new information, future events or otherwise.
News media contact:
Jessica Roy, 207-523-6763
Investor Relations contact:
Michael E. Thomas, 207-523-6743
Source: Wright Express CorporationCopyright Business Wire 2012