The Car and Truck Fleet and Leasing Management Magazine

Wright Express Extends Its Existing Fuel-Price Risk Management Program Through 1Q 2008

January 24, 2006

SOUTH PORTLAND, ME – Wright Express Corp. has extended its existing fuel-price risk program through the first quarter of 2008. The company initially began executing on its current program in July 2005. On Jan. 9, 2006, the company purchased instruments to cover an additional 30 percent of its anticipated fuel-price-related earnings exposure for each of the third and fourth quarters of 2007 and the first quarter of 2008. At this time, Wright Express has hedged 90 percent of the first three quarters of 2007 exposure, 60 percent of the fourth-quarter 2007 exposure and 30 percent of the first- quarter 2008 exposure. It also intends to continue to hedge approximately 90 percent of its 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 Jan. 9 purchase locked in a fuel price range of approximately $2.38 and $2.44 per gallon. The following table states the approximate range of the collar and percentage of fuel-price-related earnings exposure: Q1
Average of low end of range $2.29
% Locked in 90%
Average of top end of range $2.36
% Locked in 90%
Average of low end of range 2.29
% Locked in 90%
Average of top end of range 2.36
% Locked in 90%
Average of low end of range 2.32
% Locked in 90%
Average of top end of range 2.39
% Locked in 90%
Average of low end of range 2.34
% Locked in 60%
Average of top end of range 2.41
% Locked in 60%
Average of low end of range 2.38
% Locked in 30%
Average of top end of range 2.44
% Locked in 30%
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