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:
|Average lowend of range||3.42||3.44||3.47||3.36||3.38||3.35||3.43|
|Average topend of range||3.48||
|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.