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 first quarter of 2015.
On September 20, 2013, the Company purchased instruments to cover a portion of its anticipated domestic fuel-price-related earnings exposure for the third and fourth quarters of 2014 and the first quarter of 2015. At this time, WEX has hedged approximately: 60% of its third-quarter 2014 exposure, 40% of its fourth-quarter 2014 exposure and 20% of its first-quarter 2015 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 September purchase locked in a fuel price range of approximately $3.30 to $3.36 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||$3.47||$3.36||$3.38||$3.36||$3.37||$3.34||$3.30|
|Average top end of range||$3.53||$3.42||$3.44||$3.42||$3.43||$3.40||$3.36|
|Approximate % locked in||60%*||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).