WEX Extends Its Existing Fuel-Price Risk Management Program
March 20 2013 - 4:25PM
Business Wire
WEX Inc. (NYSE: WXS), a leading provider of corporate payment
solutions, announced today that it has extended its existing
fuel-price risk management program through the third quarter of
2014.
On March 18, 2013, the Company purchased instruments to cover a
portion of its anticipated domestic fuel-price-related earnings
exposure for the first, second and third quarters of 2014. At this
time, WEX has hedged approximately: 60% of its exposure for the
first-quarter of 2014, 40% of its second-quarter 2014 exposure and
20% of its third-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.
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 March purchase locked in a
fuel price range of approximately $3.43 to $3.49 per gallon. The
following table states the approximate range of the collar and
percentage of fuel-price-related earnings exposure:
Q1
Q2 Q3
Q4 Q1 Q2
Q3 2013 2013 2013 2013 2014 2014 2014 Average lowend
of range 3.42 3.44 3.47 3.36 3.38 3.35 3.43 Average topend of range
3.48
3.50
3.53 3.42 3.44 3.41 3.49 Approximate% locked in 80%* 80%* 60%* 60%*
60%** 40%** 20%**
*At the time of execution, 2013 hedges were established without
consideration of Fleet One volumes (WEX acquired Fleet One in
October 2012).**2014 hedges have been established with
consideration of Fleet One volumes.
About WEX Inc.
WEX Inc. (NYSE: WXS) is a leading provider of corporate payment
solutions. From its roots in fleet card payments beginning in 1983,
WEX has expanded the scope of its business into a multi-channel
provider of corporate payment solutions representing more than 7.6
million cardholders and offering exceptional payment security and
control across a wide spectrum of business sectors. The Company’s
operations include WEX Bank, Fleet One, Pacific Pride, rapid!
PayCard, Wright Express Prepaid Cards Australia, Wright Express
Fuel Cards Australia, Wright Express New Zealand and CorporatePay
Limited, England, as well as a majority equity position in UNIK
S.A., Brazil. WEX and its subsidiaries employ more than 1,300
associates. For more information about WEX, please visit
http://www.wexinc.com.
This news release contains forward-looking statements, including
statements regarding WEX's belief that it has purchased instruments
to cover varying percentages of its anticipated fuel-price-related
earnings exposure through the third quarter of 2014; intention to
hedge approximately 60% of its domestic fuel-price-related earnings
exposure in every quarter, 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 March 1,
2013 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.
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