SOUTH PORTLAND, Maine--(BUSINESS WIRE)--Sep. 21, 2012--
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 Company’s 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 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 Company’s 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 2012
|
|
Q4 2012
|
|
Q1 2013
|
|
Q2 2013
|
|
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 Company’s 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 Company’s 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 Company’s international business
expansion and integration efforts and any failure of those efforts; the
impact and range of credit losses; breaches of the Company’s technology
systems and any resulting negative impact on our reputation liability,
or loss of relationships with customers or merchants; the Company’s
failure to successfully integrate the businesses it has acquired; fuel
price volatility; the Company’s failure to maintain or renew key
agreements; failure to expand the Company’s technological capabilities
and service offerings as rapidly as the Company’s competitors; the
actions of regulatory bodies, including banking and securities
regulators, or possible changes in banking regulations impacting the
Company’s industrial bank and the Company as the corporate parent; the
impact of foreign currency exchange rates on the Company’s 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 Company’s
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.
Source: Wright Express Corporation
Wright Express
News media contact:
Jessica Roy, 207-523-6763
Jessica_Roy@wrightexpress.com
or
Investor
Relations contact:
Michael E. Thomas, 207-523-6743
Michael_Thomas@wrightexpress.com