WEX Inc. (NYSE: WEX), a leading provider of corporate payment solutions, today announced that it has extended its existing fuel price risk management program through the fourth quarter of 2015.
On May 29, 2014, 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 2015. At this time, WEX has hedged approximately 60% of its first quarter, 60% of its second quarter, 40% of its third quarter and 20% of its fourth 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 May purchase locked in a fuel price range of approximately $3.38 to $3.44 per gallon. The following table states the approximate range of the collar and percentage of fuel price-related earnings exposure:
| Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | ||||||||||||||||
| 2014 | 2014 | 2014 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||
| Average low end of range | $3.36 | $3.37 | $3.34 | $3.34 | $3.37 | $3.39 | $3.38 | |||||||||||||||
| Average top end of range | $3.42 | $3.43 | $3.40 | $3.40 | $3.43 | $3.45 | $3.44 | |||||||||||||||
| Approximate % locked in | 60% | 60% | 60% | 60% | 60% | 40% | 20% | |||||||||||||||
