WEX Inc. , a leading provider of corporate payment solutions, today announced that it has extended its existing fuel-price risk management program through the third quarter of 2015.
On February 20, 2014, 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 2015. At this time, WEX has hedged approximately 60% of its first quarter 2015 exposure, 40% of its second quarter and 20% of its third 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 February purchase locked in a fuel price range of approximately $3.39 to $3.45 per gallon. The following table states the approximate range of the collar and percentage of fuel-price-related earnings exposure:
