WEX Inc. (NYSE: WEX), a leading provider of corporate payment solutions, announced today that it has extended its existing fuel-price risk management program through the fourth quarter of 2014.
On June 7, 2013, the Company purchased instruments to cover a portion of its anticipated domestic fuel-price-related earnings exposure for the second, third and fourth quarters of 2014. At this time, WEX has hedged approximately: 60% of its second-quarter 2014 exposure, 40% of its third-quarter 2014 exposure and 20% of its fourth-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 June purchase locked in a fuel price range of approximately $3.37 to $3.43 per gallon. The following table states the approximate range of the collar and percentage of fuel-price-related earnings exposure:
|Average low end of range||$3.44||$3.47||$3.36||$3.38||$3.36||$3.40||$3.37|
|Average top end of range||$3.50||$3.53||$3.42||$3.44||$3.42||$3.46||$3.43|
|Approximate % locked in||80%*||60%*||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.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV