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Wright Express Reports Fourth-Quarter Results

Total Fuel Transactions and Average Number of Vehicles Serviced Both Rise 10 Percent;
$7 Million Payment on Financing Debt Brings Total Paid to $47.5 Million for Year

SOUTH PORTLAND, Maine, Feb. 8 /PRNewswire-FirstCall/ -- Wright Express Corporation (NYSE: WXS), a leading provider of payment processing and information management services to the U.S. commercial and government fleet industry, today reported financial results for the fourth quarter ended December 31, 2005.

Total revenues increased 28 percent to $64.4 million from $50.4 million for the fourth quarter of 2004. Net income to common shareholders on a GAAP basis for the fourth quarter of 2005 was $28.3 million, or $0.69 per diluted share, compared with net income of $14.3 million, or $0.35 per diluted share, for the same period last year. On a non-GAAP basis, the Company's adjusted net income for the fourth quarter of 2005 was $13.0 million, or $0.32 per diluted share.

Fourth-quarter and full-year results for 2005 are not directly comparable with 2004 on a GAAP basis due to the non-cash earnings fluctuations associated with the Company's fuel-price related derivative instruments. The GAAP financial results for the fourth quarter of 2005 include an unrealized $20.9 million pre-tax, non-cash, mark-to-market gain on these instruments. Exhibit 1 reconciles adjusted net income for the fourth quarter and year ended December 31, 2005, which has not been determined in accordance with GAAP, to net income as determined in accordance with GAAP.

In addition, GAAP net income and adjusted net income for the fourth quarter and year ended December 31, 2005 include the effect of certain costs related to the Company operating as an independent public company, which were not present in 2004. If the Company had been incurring these costs during the fourth quarter of 2004, non-GAAP net income would have been $10.9 million. The Company's adjusted net income for the fourth quarter of 2005 of $13.0 million would have represented a 19 percent increase over this amount. Exhibit 2 reconciles non-GAAP net income to net income determined in accordance with GAAP for the fourth quarter and year ended December 31, 2004.

For the year ended December 31, 2005, net income on a GAAP basis was $18.7 million, or $0.46 per diluted share, compared with $51.2 million, or $1.25 per diluted share, for full-year 2004. Adjusted net income for full-year 2005 was $48.9 million, which represents a 20 percent increase over the $40.8 million of non-GAAP net income for full-year 2004. The Company's full-year 2005 net cash used by operating activities was $40.9 million, compared with free cash flow of $48.2 million. Exhibit 3 reconciles free cash flow, which has not been determined in accordance with GAAP, to net cash used by operating activities as determined in accordance with GAAP.

Management uses the non-GAAP measures presented within this news release to evaluate the Company's performance on a comparable basis, to eliminate the volatility associated with its derivative instruments, and to measure the amount of cash that is available for making scheduled payments on the Company's financing debt and discretionary purposes. Management believes that investors may find these measures useful for the same purposes, but cautions that they should not be considered a substitute for disclosure in accordance with GAAP.

    Fourth-Quarter 2005 Performance Metrics
    * Average number of vehicles serviced increased 10 percent from the fourth
      quarter of 2004 to approximately 4.2 million.
    * Total fuel transactions processed increased 10 percent from the fourth
      quarter of 2004 to 58.0 million.  Payment processing transactions
      increased 16 percent to 43.2 million, and transaction processing
      transactions decreased 6 percent to 14.8 million.
    * Average expenditure per payment processing transaction grew to $50.64,
      an increase of 29 percent from the same period last year.
    * Average retail fuel price increased 28 percent to $2.53 per gallon, from
      $1.98 per gallon for the fourth quarter a year ago.
    * Total MasterCard purchase volume grew to $228.6 million, an increase of
      30 percent from the comparable period a year ago.
    * Wright Express paid $7.0 million in principal on its financing debt.
      The total paid year-to-date is $47.5 million.

Management Comments
"The fourth quarter was a strong conclusion to a great year for Wright Express," said Michael Dubyak, president and chief executive officer. "Our results were driven by growth in average number of vehicles serviced and number of transactions processed, as well as productivity gains as our business model scales. Our price risk management strategy is successfully mitigating our exposure to the variability in fuel prices, and our solid cash flow enabled us to pay down another $7 million of financing debt during the fourth quarter, raising the total paid down for 2005 to $47.5 million."

"There are approximately 41 million fleet vehicles on U.S. roads today, and we are making good progress in unlocking the growth potential in the fleet market," said Dubyak. "In acquiring and retaining customers, and in creating products that add value by satisfying new and existing customer needs, the Company's performance continues to improve."

"We expect 2006 to be another year of solid demand for fleet card solutions," said Dubyak. "We are leveraging our proprietary network and outstanding customer service capabilities, as well as our position as a market leader, to capitalize on this demand. As a result, our fleet card pipeline remains strong as we begin the new year. In addition, our MasterCard business is continuing to perform very well. At the same time, we continue to explore further opportunities to accelerate the Company's growth, both organically and through potential alliances or acquisitions. We look forward to reporting another strong year for Wright Express in 2006."

Financial Guidance

Wright Express Corporation is issuing financial guidance for the first quarter of 2006, as well as the full year. This guidance excludes the impact of non-cash, mark-to-market adjustments on the Company's fuel-price-related derivative instruments. The fuel prices referenced below are based on the applicable NYMEX futures price:

    * For the first quarter of 2006, revenue in the range of $62 million to
      $67 million.  This is based on an assumed average retail fuel price of
      $2.52 per gallon.
    * First-quarter 2006 net income before unrealized gain or loss on
      derivative contracts in the range of $11 million to $12 million, or
      $0.27 to $0.30 per diluted share, based on approximately 41 million
      shares outstanding.
    * For the full year 2006, revenue in the range of $275 million to $285
      million.  This is based on an assumed average retail fuel price of
      $2.57 per gallon.
    * For the full year 2006, net income before unrealized gain or loss on
      derivative contracts in the range of $52 million to $55 million, or
      $1.27 to $1.33 per diluted share, based on approximately 41 million
      shares outstanding.

Conference Call Details
In conjunction with this announcement, Wright Express will host a conference call today at 5:00 p.m. (ET) to discuss the Company's financial results, fourth-quarter highlights, business strategy and business outlook. To access this call by telephone, dial (866) 323-7218 or (706) 643-0228 (Conference ID: 4585657). A live webcast of this conference call will be available at the "Investor Relations" section of the Company's website (http://www.wrightexpress.com). A replay of the webcast will be available on the website for approximately three months.

About Wright Express

Wright Express is a leading provider of payment processing and information management services to the U.S. commercial and government vehicle fleet industry. Wright Express provides these services for approximately 295,000 commercial and government fleets containing 4.2 million vehicles. Wright Express markets these services directly as well as through more than 95 strategic relationships, and offers a MasterCard-branded corporate card. The Company employs more than 650 people and maintains its headquarters in South Portland, Maine. For more information about Wright Express, please visit http://www.wrightexpress.com.

This press release contains forward-looking statements, including statements regarding Wright Express Corporation's: assessment of its progress in unlocking growth potential and improved performance; expectations for demand for fleet card solutions in 2006; its plan to explore opportunities to accelerate growth organically and through potential alliances or acquisitions; and financial guidance for the first quarter and full year 2006.

These forward-looking statements include a number of risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: volatility in fuel prices; first quarter and full-year 2006 fueling patterns; the effect of the Company's fuel-price related derivative instruments; effects of competition; the potential loss of key strategic relationships; decreased demand for fuel and other vehicle products and services and the effects of general economic conditions on the commercial activity of fleets; the Company's ability to rapidly implement new technology and systems; potential corporate transactions including alliances, mergers, acquisitions and divestitures; changes in interest rates and the other risks and uncertainties included from time to time in the Company's filings with the Securities and Exchange Commission, including the final prospectus filed on February 16, 2005, and the Company's periodic and current reports. Wright Express Corporation undertakes no obligation to update these forward-looking statements at any future date or dates.

    Condensed Financial Statements and Supplemental Exhibits Follow  ...



                          WRIGHT EXPRESS CORPORATION
                 CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
                    (in thousands, except per share data)
                                 (unaudited)

                                         Three months ended   Year ended
                                            December 31,      December 31,
                                           2005     2004     2005      2004

    Revenues
     Payment processing revenue          $46,527  $35,112  $173,416  $129,987
     Transaction processing revenue        4,215    4,242    17,136    18,113
     Account servicing revenue             5,656    5,426    22,935    21,167
     Finance fees                          5,379    2,708    15,769     9,603
     Other                                 2,648    2,888    12,077    10,230
      Total revenues                      64,425   50,376   241,333   189,100

    Expenses
     Salary and other personnel           14,356   12,646    59,986    49,420
     Service fees                          2,332    2,732    11,924     9,534
     Provision for credit losses           1,610    1,898     8,813     8,131
     Technology leasing and support        2,144    2,222     8,590     8,169
     Occupancy and equipment               1,431    1,157     5,874     5,441
     Depreciation and amortization         2,736    1,526     9,918     7,376
     Operating interest expense            4,927    1,801    14,519     5,625
     Operating interest income               -    (1,076)       -     (3,197)
     Other                                 3,704    3,795    15,092    14,441
      Total operating expenses            33,240   26,701   134,716   104,940

    Operating income                      31,185   23,675   106,617    84,160

    Financing interest expense           (3,707)      -    (12,966)       -
    Realized and unrealized gains
     (losses)on derivative instruments    14,216      -    (65,778)       -
    Income before income taxes            41,694   23,675    27,873    84,160
    Provision for income taxes            13,367    9,413     9,220    32,941

    Net income                           $28,327  $14,262   $18,653   $51,219

    Earnings per share (on a pro forma
     basis for 2004):
     Basic                                 $0.70    $0.35     $0.46     $1.27
     Diluted                               $0.69    $0.35     $0.46     $1.25

    Weighted average common shares
     outstanding (on a pro forma basis
     for 2004):
     Basic                                40,206   40,185    40,194    40,185
     Diluted                              41,337   41,104    40,735    41,104



                          WRIGHT EXPRESS CORPORATION
                         CONSOLIDATED BALANCE SHEETS
                    (in thousands, except per share data)
                                 (unaudited)

                                                          December 31,
                                                       2005           2004

    Assets
     Cash and cash equivalents                        $44,994        $31,806
     Accounts receivable (less reserve for
      credit losses of $4,627 in 2005 and
      $4,212 in 2004)                                 652,132        447,169
     Income tax refunds receivable, net                 3,300              -
     Due from related parties                               -        134,182
     Available-for-sale securities                     20,878         17,792
     Property, equipment and capitalized software, net 38,543         37,474
     Deferred income taxes, net                       513,018            502
     Intangible assets, net                             2,421          2,421
     Goodwill                                         135,047        135,047
     Other assets                                      10,088          6,296

    Total assets                                   $1,420,421       $812,689

    Liabilities and Stockholders'
     or Member's Equity
     Accounts payable                                $254,381       $197,647
     Accrued expenses                                  22,197         17,410
     Deposits                                         338,251        194,360
     Borrowed federal funds                            39,027         27,097
     Revolving line-of-credit facility                 53,000              -
     Term loan, net                                   167,508              -
     Derivative instruments, at fair value             36,710              -
     Other liabilities                                    331            459
     Due to related parties                                 -         91,466
     Amounts due to Cendant under tax
      receivable agreement                            424,277              -
     Preferred stock; 10,000 shares authorized:
      Series A non-voting convertible,
       redeemable preferred stock;
       0.1 shares authorized,
       issued and outstanding                          10,000              -

    Total liabilities                               1,345,682        528,439

    Stockholders' or Member's Equity
     Member's contribution                                  -        182,379
    Common stock $0.01 par value;
      175,000 shares authorized 40,210 shares
      Issued and outstanding                              402              -
     Additional paid-in capital                        55,020              -
     Retained earnings                                 18,653        101,869
     Other comprehensive income, net of tax:
      Net unrealized gain on interest rate swaps          748              -
      Net unrealized gain (loss) on available for
       sale securities                                   (84)              2

     Accumulated other comprehensive income               664              2

     Total stockholders' or member's equity            74,739        284,250

    Total liabilities and stockholders'
     or member's equity                            $1,420,421       $812,689



                          WRIGHT EXPRESS CORPORATION
                     CONSOLIDATED STATEMENT OF CASH FLOWS
                                (in thousands)
                                 (unaudited)

                                                    Year ended December 31,
                                                      2005           2004

    Cash flows from operating activities
     Net income                                      $18,653        $51,219
     Adjustments to reconcile net income to
      net cash provided by operating activities:

      Net unrealized loss on derivative instruments   36,710              -
      Stock-based compensation                         6,994              -
      Depreciation and amortization                   11,100          7,376
      Deferred taxes                                   4,228          (809)
      Provision for credit losses                      8,813          8,131
      Loss (gain) on disposal of property and
       equipment                                        (72)          1,016
      Change in operating assets and liabilities:
       Accounts receivable                         (213,776)      (152,983)
       Income tax refunds receivable, net            (3,300)              -
       Other assets                                  (1,268)        (1,279)
       Accounts payable                               56,734         71,981
       Accrued expenses                                4,787          7,622
       Other liabilities                               (128)          (784)
       Amounts due to Cendant under tax
        receivable agreement                        (15,468)              -
       Due to/from related parties                    45,051       (32,105)

      Net cash used by operating activities         (40,942)       (40,615)

    Cash flows from investing activities
     Purchases of property and equipment            (11,017)       (11,039)
     Sales of property and equipment                     125          1,346
     Purchases of available-for-sale securities      (3,637)          (985)
     Maturities of available-for-sale securities         425            758
     Purchases of Federal Home Loan Bank stock             -           (43)
     Purchases of option contracts                         -          (144)

     Net cash used for investing activities         (14,104)       (10,107)

    Cash flows from financing activities
     Dividends paid                                (305,887)       (25,279)
     Excess tax benefits of equity instrument
      share-based payment arrangements                    60              -
     Proceeds from exercise of stock options             328              -
     Net repayments on related party line of credit        -       (20,000)
     Net increase in deposits **                     143,891        102,542
     Net increase in borrowed federal funds **        11,930          3,131
     Net borrowings on revolving line of credit       53,000              -
     Loan origination fees paid for
      revolving line of credit                       (1,704)              -
     Borrowings on term loan,
      net of loan origination fees of $2,884         217,116              -
     Repayments on term loan                        (50,500)              -

     Net provided by financing activities             68,234         60,394

    Net change in cash and cash equivalents           13,188          9,672
    Cash and cash equivalents, beginning of period    31,806         22,134

    Cash and cash equivalents, end of period         $44,994        $31,806

    **  Although classified as financing activities for purposes of the
        financial statements, the Company uses these amounts specifically as
        a source of cash for funding the timing difference between collecting
        accounts receivable and payments of accounts payable.



                                  Exhibit 1
                          Wright Express Corporation
           Reconciliation of Adjusted Net Income to GAAP Net Income
                      Fourth Quarter and Full Year 2005
                                (in thousands)
                                 (unaudited)

                                               Three months ended Year ended
                                                  December 31, December 31,
                                                      2005           2005

    Adjusted net income                              $12,999        $48,909
    Non-cash, mark-to-market
     adjustments on derivative instruments            20,856       (36,710)
    Termination of derivative instruments                  -        (8,450)
    Conversion of restricted stock units and
     stock options                                         -        (5,723)
    Tax impact                                       (5,528)         20,627
    GAAP net income                                  $28,327        $18,653

Although adjusted net income is not calculated in accordance with generally accepted accounting principles (GAAP), this measure is integral to the Company's reporting and planning processes. The Company considers this measure integral because it eliminates the non-cash volatility associated with the derivative instruments. Specifically, in addition to evaluating the Company's performance on a GAAP basis, management evaluates the Company's performance on a basis that excludes the above items because:

    * Exclusion of the non-cash, mark-to-market adjustments on derivative
      instruments helps management identify and assess trends in the
      Company's underlying business that might otherwise be obscured due to
      quarterly and annual non-cash earnings fluctuations associated with
      fuel-price derivative contracts;
    * The non-cash, mark-to-market adjustments on derivative instruments are
      difficult to forecast accurately, making comparisons across historical
      and future quarters and years difficult to evaluate;
    * The termination of derivative instruments during the first quarter of
      2005 was a non-recurring event effected by the Company's former parent
      company as part of the process of preparing the Company for its initial
      public offering; and
    * The conversion of restricted stock units and stock options was a non-
      recurring event resulting from the need to convert the equity
      incentives held by the Company's employees so that they were
      exercisable following the initial public offering for Company common
      stock instead of for common stock of the Company's former parent.

For the same reasons, Wright Express believes that adjusted net income may also be useful to investors as one means of evaluating the Company's performance. However, because adjusted net income is a non-GAAP measure, it should not be considered as a substitute for, or superior to, net income, operating income or cash flows from operating activities as determined in accordance with GAAP. In addition, adjusted net income as used by Wright Express may not be comparable to similarly titled measures employed by other companies.



                                  Exhibit 2
                          Wright Express Corporation
           Reconciliation of Non-GAAP Net Income to GAAP Net Income
                      Fourth Quarter and Full Year 2004
                                (in thousands)
                                 (unaudited)

                                                  Three months    Full year
                                                     ended          ended
                                                  December 31,  December 31,
                                                      2004           2004

    Non-GAAP net income                              $10,891        $40,818
    Loss of interest income on cash balances           1,075          3,196
    Incremental public company expenses,
     net of Cendant allocations                        1,804          4,485
    Founders grant vesting expense
     recognized in 2005                                  400          1,335
    Savings from vesting Cendant restricted
     stock units                                       (321)          (914)
    Additional interest on operating debt
     balances used to pay a dividend to Cendant          158            455
    Interest expense on financing debt balances        2,676          8,579
    Tax impact                                       (2,421)        (6,735)
    GAAP net income                                  $14,262        $51,219

Although non-GAAP net income is not calculated in accordance with generally accepted accounting principles (GAAP), this measure is integral to the Company's internal reporting. Management considers this an important measure because it includes the effect of new costs related to the Company's operating for the first time as an independent public company, as well as financing costs related to the indebtedness incurred to pay a $306 million dividend to Cendant prior to the initial public offering. However, because non-GAAP net income has not been determined in accordance with generally accepted accounting principles, it should not be considered as a substitute for net income, operating income or cash flows from operating activities as determined in accordance with GAAP. In addition, non-GAAP net income as used by Wright Express may not be comparable to similarly titled measures employed by other companies. The non-GAAP adjustments are based upon available information the Company believes to be reasonable as of today. The non-GAAP results are not necessarily indicative of the future results of operations.



                                  Exhibit 3
                          Wright Express Corporation
  Reconciliation of Free Cash Flow to Net Cash used by Operating Activities
                                (in thousands)
                                 (unaudited)

                                                   Year ended
                                                  December 31,
                                                      2005

    Free cash flow                                   $48,222
    Net (increase)/decrease in accounts receivable (213,776)
    Charge-offs of accounts receivable                11,810
    Net (increase)/decrease in accounts payable       56,734
    Related party activity                            45,051
    Capital expenditures                              11,017
    Net cash used by operating activities          $(40,942)

Although free cash flow is not calculated in accordance with generally accepted accounting principles (GAAP), this measure is integral to the Company's internal reporting. Free cash flow is determined as cash provided or used by operating activities adjusted for the impact of accounts receivable (net of charge offs), accounts payable, non-recurring related party activity in connection with the Company's initial public offering and capital expenditures. Management considers this an important measure because it provides management with a measure of cash that is available for scheduled financing debt payments and discretionary purposes. This measure aligns the sources of cash with their related uses based upon the underlying activity. However, because free cash flow has not been determined in accordance with generally accepted accounting principles, it should not be considered as a substitute for net cash used by operating activities as determined in accordance with GAAP. In addition, free cash flow as used by Wright Express may not be comparable to similarly titled measures employed by other companies. The non-GAAP adjustments are based upon available information the Company believes to be reasonable as of today. The non-GAAP results are not necessarily indicative of the future results of operations.

    News media contact:                 Investor contact:
     Jessica Roy                         Steve Elder
     Wright Express                      Wright Express
     207.523.6763                        207.523.7769
     Jessica_Roy@wrightexpress.com       Steve_Elder@wrightexpress.com

SOURCE Wright Express Corporation